Specialty Chemicals Market

Global Specialty Chemicals Market Size (2024 to 2029)

The global specialty chemicals market is expected to register at a CAGR of 5% from 2024 to 2029 and the size of the global market is anticipated to reach USD 384.14 billion by 2029 from USD 286.65 billion in 2023.

Specialty chemicals are chemicals that help provide a variety of effects to the various industries they serve, such as textiles, ink additives, construction, oil and gas, and cosmetics. Specialty chemicals can be single chemical formulations or entities whose composition greatly influences the performance of the customer's product. Continuous R&D in this market has facilitated the development of products with optimal and advanced features. It is one of the main growth factors of this market. With rapid industrialization, notable demand has emerged from Asian countries such as India and China. There has been an increase in investment in construction and infrastructure development projects in Asia-Pacific. As a result, Asia-Pacific is seen as a favorable destination for manufacturers of specialty chemicals, with it the engine of market growth. However, it is believed that variations in the cost of raw materials and strict government regulations will hamper the growth of the specialty chemicals market.

MARKET DRIVERS

The growing usage of specialty chemicals in the agriculture industry is one of the major factors propelling global market growth.

Agriculture is the major consumer of specialty chemicals worldwide. The decrease in arable land per capita and the increase in food demand around the world are some of the major factors fuelling the usage of specialty chemicals in the agriculture industry. This growing population adds to the demand for food. The food supply of this growing population has become a threat. On the other hand, arable land is shrinking due to industrialization and urbanization. Fertilizers have long been used to increase crop productivity, thereby increasing the demand for agrochemicals during the forecast period. As per capita income increases and population levels rise, demand for food and cash crops is expected to increase globally. For example, according to the FAO, the demand for food in the United States is expected to increase by 50 to 90% by 2050. The Food and Agriculture Organization of the United Nations (FAO) and the International Research Institute on Food Policy (IFPRI) have published projections of an increase in global food demand through 2050. FAO projections indicate that global food demand could increase by 70% by 2050, the expected increase in global food demand largely due to rising consumer incomes in Asia-Pacific, Eastern Europe, and Latin America. In addition, due to growing concerns about the efficient uptake of nutrients by plants and growing concerns about health and environmental regulations, micronutrient fertilizers, bio-based fertilizers, and specialty fertilizers (such as liquid fertilizers) are gaining in popularity. Bioherbicides that use microbes as biological weed control agents are also gaining popularity in integrated pest management techniques, as well as synthetic herbicides. Although the segment is only a small part of the industry, it is expected to grow at a significant growth rate. In addition, the rental of agricultural land and loss of crops due to the incidence of pests and diseases are the major factors driving the insecticide market. Hence, all these favorable trends are expected to drive the market for agrochemicals during the forecast period and stimulate demand for specialty chemicals.

Agrochemicals have dominated the specialty chemicals market and are expected to grow during the forecast period mainly due to population growth and increasing demand for food products around the world. Growth in the chemicals market. In addition, increased innovation and research and development are the main drivers of growth, as the market is largely influenced by changing consumer preferences. The manufacturer's emphasis on offering innovative and customized products for target applications, thereby meeting specific consumer demand, investments in research and development have increased significantly in recent years, resulting in the development of chemical innovators and a significant expansion of the product portfolio in the market. The cosmetics industry is also experiencing strong growth in demand in the region, which is driven by the increased use of cosmetics due to the growing demand for anti-aging cosmetics from baby boomers and the world. Generation X is influenced by Western culture among young people, increasing the employment of women and continuous innovation of products that attract the masses. This increases the production of cosmetic products in the region, leading to an increase in demand for cosmetic chemicals. Hence, all of these are likely to collectively drive the growth of the specialty chemicals market in the region over the forecast period.

Increased R&D to develop new products is likely to provide an opportunity for the specialty chemicals market during the forecast period.

MARKET RESTRAINTS

Rising environmental regulations, dwindling fossil fuel reserves, and the negative impact of the COVID-19 pandemic are the limits that are hampering the growth of the specialty chemicals market. Strict government regulations, along with variable commodity prices, are expected to hamper market growth. The increase in environmental regulations and the decrease in fossil fuel reserves are the constraints that hamper the growth of the specialty chemicals market.  Competition from cheaper conventional counterparts in specialty chemicals adds to industry challenges.

REPORT COVERAGE

SEGMENTAL INSIGHTS

Global Specialty Chemicals Market Analysis By Product

The industrial and institutional cleaners segment accounted for the largest share of global market in 2023 and is expected to experience a growth rate of 4.0% during the forecast period. The CASE segment which includes coatings, adhesives, sealants, and elastomers has grown into a lucrative segment accounting for a notable share of the worldwide market in 2023.

REGIONAL ANALYSIS

The Asia-Pacific held the major share of the global market in 2023.

Asia-Pacific dominated the global market due to the huge customer base, resulting in high demand for specialty chemicals, increased industrial production, and strong growth in the construction sector in the region. Increased demand for adhesives and plastics from the packaging industry and increased installations of water treatment systems by industries in the region are promoting the demand in the specialty chemicals market. The growing population of the region, especially in countries like China and India, is increasing the demand for food. This is expected to boost the agrochemicals market and hence help the specialty polymers market to expand during the forecast period. The growth of the construction sector in Asia-Pacific is mainly driven by the expansion of the service sector, leading to an increase in the demand for office space, an increase in residential construction projects, and the influx of investments from multinational companies to establish an industrial base. In the region. The Asia-Pacific and Middle East regions are expected to experience strong demand for paints and coatings due to significant investments in the construction sector.

The Middle East and Africa region has seen a huge increase in industrial and institutional construction. Countries in the Middle East, such as Saudi Arabia, the United Arab Emirates, and Qatar, are trying to develop their tourism, healthcare, and manufacturing industries, with the aim of reducing their economic dependence on it.

In addition, the increase in renovation projects in North America and the resumption of construction activity in Europe is expected to drive growth of the specialty chemicals market.

KEY PLAYERS IN THE GLOBAL SPECIALITY CHEMICALS MARKET

Companies playing a key role in the global specialty chemicals market include Henkel Ag & Co. KGAA (Germany), BASF SE (Germany), AkzoNobel N.V. (The Netherlands), Evonik Industries AG (Germany), Clariant AG (Switzerland), Huntsman International LLC (U.S.), The Dow Chemical Company (U.S.), Albemarle Corporation (U.S.) and Ashland Inc. (U.S.).

RECENT HAPPENINGS IN THE GLOBAL MARKET

• In November 2019, Axalta, a leading global supplier of liquid and powder coatings, announced that it had completed the acquisition of Capital Paints LLC, a manufacturer of thermosetting powder coatings based in the United Arab Emirates.
• In August 2019, PPG launched the acquisition of Dexmet Corporation, a manufacturer of surface materials specializing in aerospace, automotive, and industrial applications.

DETAILED SEGMENTATION OF THE GLOBAL SPECIALITY CHEMICALS MARKET INCLUDED IN THIS REPORT

This research report on the global specialty chemicals market has been segmented and sub-segmented based on product and region.

By Product

• Institutional & Industrial Cleaners
• Flavor & Fragrances
• Food & Feed Additives

By Region

• North America 
• Europe 
• Asia Pacific
• Latin America 
• Middle East & Africa