Specialty chems expected to see strong growth – SOCMA survey

HOUSTON (ICIS)–The specialty chemical industry is expected to see strong growth in the next few years as the economy recovers from the coronavirus pandemic, according to data collected by a trade group.

The Society of Chemical Manufacturers and Affiliates (SOCMA) released its Specialty Chemicals Industry Census survey results where it found that expansion and demand growth is expected in the sector in comparison to last year.

This year, 100% of companies expect to see an increase in revenue over the next three years with most of the growth anticipated through the new introduction of products.

The report listed top key areas where the specialty chemicals business could see expansion. The leading three processes for expansion were drying, distillation and hydrogeneration, while blending polymerisation and transportation were lagging.

Last year 13% of plants had no plans for capital expansion, in 2021 only 4% of companies said they had zero plans for any capital expansion.

At the same time, priorities have shifted for some firms, with many realising the important of sustainability and supply chain-related issues.

“Access to materials and climate issues are topics in which some of our members are seeing a shift occurring,” said Paul Hirsh, SOCMA senior vice president.

Regarding the impact of the pandemic on profit, the companies surveyed said that 40% of the firms had no impact with 23% seeing an increase in profits, while 38% had a decrease.

“Because of the shifts in market segments activity, we saw companies go from areas like oil and gas and make that pivot to hand sanitizer, household consumer products certainly a saw a bump in in activity and need,” said Hirsh.

One of the issues that arises from that pivot though, is what the firms will do with that expanded capacity once the demand for these products wanes as the pandemic ends.

However, survey results expect near-term demand for household consumer products will continue to have a robust market, including in the plastics sector.

In addition, many firms are running at capacity, and are now looking to add to their capacity based on customer demand. One of the main sectors of expansion growth is predicted to be in the plastics industry because of its varied applications on the specialty chemicals sector.

While recovery from the coronavirus pandemic has been a delayed process for many industries including the specialty chemicals sector, SOCMA expects the industry to be right on track to meet anticipated growth seen in the last couple of years.