Why are Sales of Specialty Chemicals Shooting Up in Middle East & Africa?

With the growing requirement for food products, on account of the mushrooming population, farmers are increasingly employing the use of modern agricultural practices such as the use of insecticides, fungicides, pesticides, and fertilizers in order to augment the crop productivity. Moreover, the rapid advancements being made in the agriculture sector, which is the dominant sector in several African countries, are also positively impacting the usage of specialty chemicals in farming processes. These chemicals are used during various stages in order to prevent crop damage because of environmental factors, pests, and weed growth and improve the fertility of the soil.

Besides the aforementioned factor, the rapid economic progress of several Middle Eastern and African nations is also contributing toward the soaring sales of specialty chemicals in the Middle East and Africa (MEA) region. These chemicals are being increasingly used in the electronics, construction, and agriculture sectors, which is, in turn, generating lucrative growth opportunities for the players operating in the MEA specialty chemicals market. Apart from these factors, the increasing construction and infrastructural development activities and expansion of the oil & gas industry are also predicted to fuel the market at a CAGR of 5.3% from 2018 to 2023.

Additionally, the expansion of end user industries such as adhesives and sealants, construction, and plastics is also boosting the demand for these chemicals in the country. These factors are also encouraging the players operating in the MEA specialty chemicals market to launch mergers and acquisitions for providing new offerings to end user industries. For example, Saudi Basic Industries Corporation announced in 2017 that it was looking for $3-6 billion business acquisition opportunities in specialty chemicals, fertilizers, and petrochemicals.

Hence, it can be safely said that the sales of specialty chemicals will surge sharply in the MEA region in the coming years, primarily because of their growing usage in various industries such as plastics, construction, oil & gas, and agriculture in the region.

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Agriculture Sector Key Consumer of Specialty Chemicals

Any non-food powder or liquid (excluding certain ingredients) can be vaguely termed a ‘chemical’, which gives an idea of how vast the concept and the number of substances classified as chemicals are. So, wherever there is industry, some or the other chemical would be in use. In turn, chemicals that are formulated for a specific purpose are generally called specialty chemicals. The concept includes agrochemicals, specialty coatings, construction chemicals, surfactants, polymer additives, food additives, electronic chemicals, plastic additives, cleaning chemicals, paper & textile chemicals, lubricant & oilfield chemicals, adhesives & sealants, advanced ceramic materials, water treatment chemicals, rubber processing chemicals, and mining chemicals.

P&S Intelligence considers such a wide application area of such products as the key factor that will drive the specialty chemicals market size to $980,423.7 million by 2030 from $639,935.8 million in 2019, at a 5.5% CAGR during 2020–2030 (forecast period). Even within specific industries, these chemicals have a wide range of applications. For instance, a large quantity of paper chemicals is consumed for packaging, printing, and labeling purposes. Overall, agrochemicals account for the heaviest consumption due to the booming population, which continues to push up the demand for food.

Currently, Asia-Pacific (APAC) is the largest specialty chemicals market, and it is also projected to observe the highest CAGR over the forecast period. This is ascribed to the vast manufacturing base of APAC and its huge population, the latter of which leads to a high-volume consumption of agrochemicals. Similarly, the region is home to the world’s largest automobile sector, which is why it witnesses a high demand for lubricants and other related chemicals. Moreover, the burgeoning population of APAC is propelling infrastructure development activities, thus driving the usage of construction chemicals.

The specialty chemicals market has a fragmented nature, and its competitive landscape is characterized by an array of strategic measures, such as mergers, acquisitions, facility expansions, extensive research and development (R&D), product launches, partnerships, agreements, and collaborations. Key players in the market are Evonik Industries AG, Eastman Chemical Company, Ashland Global Holdings Inc., Akzo Nobel N.V., LOTTE Fine Chemical Co. Ltd., Mitsui Chemicals Inc., BASF SE, Huntsman Corporation, Mitsubishi Chemical Corporation, Clariant International Ltd., Dow Inc., China Petroleum & Chemical Corporation, Sadara Chemical Company, AECI Ltd., Saudi Basic Industries Corporation, and Thebe Unico.

Therefore, the burgeoning population will keep driving the consumption of a wide variety of specialty chemicals across an equally wide variety of industries.

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