Specialty Chemicals Industry Overview

Specialty chemicals are produced primarily by batch processing; production volumes are relatively small in comparison to basic or commodity chemicals.

Specialty chemicals are either single-chemical entities or mixtures of various chemical ingredients that are designed for specific applications and sometimes for specific customers. They are sold on the basis of their performance or function rather than their composition.

Examples include adhesives and sealants; catalysts; cosmetic chemicals; electronic chemicals; food additives; flavors and fragrances; high-performance thermoplastics; high-performance anticorrosion coatings; industrial and institutional cleaners; lubricating oil additives; nutraceuticals; oil field chemicals; synthetic lubricants; radiation-curable coatings; and plastic additives.

Specialty chemicals are consumed in a broad range of consumer and industrial uses so in a sense, they are all common. Of the examples of specialty chemicals listed above, consumer-oriented specialty chemicals include cosmetic chemicals, food additives, flavors and fragrances, and nutraceuticals. The rest are consumed primarily in industrial markets.

Unlike manufacturers of basic or commodity chemicals, specialty chemical companies sell not only a chemical(s) but an entire product solution. Thus, specialized marketing and technical service are integral to a specialty chemicals business because they are selling chemicals that sharply influences the performance and processing of the customer’s product. Specialty chemical companies run the gamut from large integrated multinational companies such as BASF and Dow, with a significant portion of their revenue generated from specialty chemicals business; to pure-play companies such as Clariant, DSM, and Lubrizol; and focused niche players with only regional coverage.