Challenges & Opportunities in Indian organic chemical market

pipeline connectivity, the domestic manufacturers in the country will face difficulty in obtaining raw materials at a competitive cost with their global peers.

Lack of cheaper raw material availability: the lack of availability of raw materials such as feedstock that include naphtha, natural gas & power are crucial inputs for the organic chemicals industry. Costs of the aforementioned raw materials are high in the country when compared to other countries in the middle-east and south-east Asian countries.

“Chemical manufacturing follows stringent quality norms that make expert handling indispensable for ensuring safe and quality compliant products. The use of chemicals in aromatic creation has been a widely explored area since inception to the current use of organic chemicals in perfume, body washes, soaps, shampoos, and a wide variety of aromatic products,” says Abhijeet Malhotra, CEO of Malhotra Organic Chemicals.

Opportunities

Consolidation: As a majority of the Indian manufacturers work on a small scale when compared to global players, there are opportunities for consolidation in the organic chemicals industry in the country. Domestic players can make use of the economies of scale coming from consolidation & can emerge as more competitive which will result in preventing cheaper global imports.

Wider product portfolio: the product portfolio of commodity chemicals manufacturers can also be improved by adding specialty chemicals such as lubricating additives, polymers additives, water treatment chemicals, and many others. This will facilitate in improving their margins at the same time it requires great Research & Development efforts.

“Benzyl Alcohol is an organic chemical in demand due to its vast industrial applications in pharmaceuticals, agrochemicals, and aromatic sectors. There is a gap in the demand and supply of Benzyl Alcohol in the market due to a scarcity of skilled and competent enterprises failing to meet the consumer requirements in terms of quality and quantity,” explains Abhijeet Malhotra.

Technology-driven

Since the organic chemical industry is technology-driven there is huge spending in Research & Development and this plays a crucial role in the value chain. These R&D investments regarding innovative applications as well as a reduction in production costs are going to bring numerous opportunities for the industry players. The government initiatives with an aim to encourage the manufacturing industry in emerging economies like India are going to open new opportunities for organic market development.

The road ahead

The organic chemicals industry is segmented with big players in the industry mainly focusing on a particular area of expertise. The organic chemicals market is huge and covers a wide range of applications across a plethora of industries. Ardent steps are being taken by the industry players which include forging partnerships and investing in R&D activities for increasing the manufacturing capacity as well as enhancing the product portfolio and these measures are taken for gaining organic chemical market share & fulfilling the surging demand needs.