Ratings agency Crisil in its latest report has said that the specialty chemicals market is expected to grow at a compounded annual growth rate (CAGR) of 12-13 percent over the next five years, with increased focus on improving products, the intensity of specialty chemicals in these end-use domestic markets will rise. It noted that the closure of plants in countries such as EU and China, due to rising environmental anxieties, has opened doors for Indian manufacturers to further invest in the specialty chemicals segment.
According to the report, while India also faces threat from environmental concerns, the threat is limited to smaller players and shall serve as an opportunity for larger players to capture the market. It pointed out that some of the large players have established themselves in global markets like the EU and US and have active export revenue share which will help them seize the opportunity. It added that at the same time, global players are looking to diversify supply risk, thereby improving export opportunities for Indian players.
Ratings agency further stated that prospects of the domestic chemical industry are intrinsically linked with the overall growth in the economy as well the export market. However, it said slowdown in the global economy is likely to hamper the overall growth potential for chemicals. Nevertheless, despite shutdowns in China and lack of capacity additions in other developed countries, India still stands to benefit in the export market. To take full advantage of the export market, it suggested that existing players will have to update their product mix and introduce specialty chemicals in their portfolio and accelerate investments in R&D.
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