Impact of Coronavirus (Covid-19) Pandemic on the Specialty Chemicals Industry

The specialty & fine chemicals have application in various industries including biocides, catalysts, mining, paints, construction, textiles, and pharmaceutical. Except for its application in the pharmaceutical industry, Covid-19 has reduced the demand for specialty & fine chemicals across other industry verticals. According to Coherent Market Insights (CMI), the global demand for specialty chemicals fell by over 5% in the month of May 2020 amid COVID-19 crisis. The lowest demand has been estimated from the mining, foundry, and paints industry verticals. The demand for specialty chemicals such as amino acids, salicylic acid, paracetamol, ibuprofen, diclofenac, and dicalcium phosphate is analyzed to increase form South-east Asia and India in the near future, as the world identifies an alternative of API supplier to China. In order to capitalize this opportunity, on March 26, 2020 the Government of India announced US$ 1.2 Billion as a subsidy for the production of active pharmaceutical ingredients (APIs). This will certainly act as a morale booster for the biggest players in generics drugs, to commence domestic manufacturing of APIs, and become self-reliant. In addition to this, the Government of India has also announced to provide incremental incentives to 53 Key Starting Materials (KSMs – Building Blocks for APIs) to further accelerate the API production in India. Coherent Market Insights estimates over 15% growth in the sales of specialty chemicals, to the South-east Asia market in 2020, as compared to 2019.