The specialty chemicals market in India has been flourishing, owing to the rise in demand from various end-user industries. The specialty chemicals market in India was valued at INR 2,650.92 Bn in FY 2019 and is expected to reach INR 4,527.36 Bn by FY 2024, expanding at a compound annual growth rate (CAGR) of ~11.9% during the FY 2019-FY 2024 period. Unlike basic chemicals, the price of specialty chemicals is determined depending on their unique features and utilities rather than composition.
Despite of uncertainties environmental concerns and sharpening cost focus, the sector has sufficiently sustained the growth as demand for this product from end-user industries, Demand from export and import substitution opportunities due to the clampdown on chemicals manufacturing in China. While these drivers create a conducive.
However, current scenario may impact the growth for limited time span. Structural positivity & right chemistry & involution of new chemicals, we remain positive bias on this sector.
An increase in demand in end-user industries like food processing, personal care, and home care is propelling the development of the different segments of the Indian specialty chemicals market. Due to busy work schedules, people lack the time to cook and prefer consuming processed and packaged foods. Edible oils find application in the food processing market. Therefore, growing consumption of processed and packaged food is leading to the rise in demand of edible colors, flavours and Agents. The premium home care and personal care segments also see lot of demand for non-greasy detergent, Skin friendly Hygiene etc.
Road Ahead
Rising demand for better Homecare solutions, Food Industry, Perfumeries, Oil Substitute etc. would remain, thus giving opportunity for this sector to grow at rate of 11-13% Y-o-Y.
India Sourcing would be the key advantage for this sector as china will be choice for later with importer around the globe.
BENEFICIARIES : PIDILITE, AARTI IND, GALAXY SURFACTANT, SUMITOMO.
