Specialty Chemicals to Remain a Lucrative Segment in the Indian Chemical Industry: Analysts

In the first half of 2020, repercussions caused by Covid-19 adversely impacted the global chemical industry due to the unabated turnaround and logistic disruptions. However, the chemical sector is among the most leveraged one as it returned to normalcy way sooner than the market expectations. As several businesses have traced their way back to pre-Covid-19 levels, consistent growth is being witnessed in the demand for various specialty chemicals. Backed by the favorable government policies, specialty chemicals sector is expected to stay bullish with anticipations of a steep growth in the first half of 2021.

As it is quite evident that China and several countries in the western region are looking forward to reducing the production of specialty chemicals due to the environmental effects that accompany it. There exist extreme possibilities that the manufacturing units will be relocated to India, giving the country vivid possibilities to expand its export potential. Thus, despite the skyrocketing charm which specialty chemicals sector is already experiencing, there exists further room for growth in the sector.

Comprehending the bright growth prospects, Galaxy Surfactants in its Q3 results stated that it is eyeing to further extend its portfolio into niche specialty chemical products. Several other specialty chemical industries like Himadri Specialty Chemicals and Fine Organics have also revealed a lucrative growth from Amines and several newly added API chemicals, which are further expected to report robust numbers in the coming quarters. Moreover, Balaji Amines has showcased an appreciable growth in its total revenue, with an increase by 63% on y-o-y basis. The company has even revealed that the unprecedented growth witnessed in its segments is an outcome of improved operating leverage followed by bulk volume offtakes from pharma industry at better realizations. The company even stated due to the shift in various business operations, it has started exporting chemicals like DETA and EDA to China.

As per ChemAnalyst, “Indian specialty chemical industry has inherent advantages for establishing the base in manufacturing sector, however a low-risk chemical environment following certain government policies will serve in favors of the new players to expand their share in the global chemical market.