Specialty chemicals
market overview

End-user segment strategy context

We supply specialty chemicals to all four of our end-user segments, based largely (80 percent of our revenues) on five main value chain platforms. These platforms are: salt/chlorine, surfactants, ethylene oxide, bleaching chemicals and organic peroxides. The outlook for the end-user segment relevant for our value chain platforms is described as follows.

Industrial

Accounting for nearly 60 percent of revenues, the Industrial end-user segment is by far the largest for our Specialty Chemicals Business Area. All five of our platforms supply this end-user segment, with our main revenue streams coming from:

  • Sales from our surfactant and ethylene oxide platforms into the oil, gas, mining and agricultural industries. The outlook for these industries is quite positive, as continued increases in wealth in high growth areas is driving demand. With high oil prices, many oil and gas projects are economic. There is also considerable demand for products that facilitate oil production, such as our chelates and surfactants. Similar trends are evident in most mining and agricultural industries
  • Sales from our bleaching chemicals platform into the parts of the pulp and paper industry that use chemical bleaching. Pulp and paper is rather stable in terms of demand and is growing well today in South America and Asia and we expect this trend to continue
  • Sales from our salt/chlorine platform and organic peroxides platform into a wide variety of chemical processes. A particular area of focus is the plastics industry, into which we supply salt, chlorine, initiators and various other products

Buildings and Infrastructure

Our specialty chemicals are used throughout the supply chain that serves the construction industry. Primarily through the salt/chlorine platform and organic peroxides platform, we supply salt, chlorine, initiators and various other products used in the manufacture of plastics that are, in turn, used to make doors, windows and other construction material plastics. Together, all these products generate approximately 20 percent of our Specialty Chemicals Business Area revenues. In this segment, we are expecting a return to growth in Europe, although the recovery is not yet secure. Growth will continue in high growth regions, but at a lower level than we have seen historically.

Consumer Goods

Most of the 19 percent of Specialty Chemicals revenues generated by the Consumer Goods end-user segment comes from our surfactants and ethylene oxide platforms. These products are used in a wide variety of consumer packaged goods applications, including personal care products, cleaning, dishwashing and fabric softeners. The expected growth in demand for these end-uses is at, or slightly above, GDP growth in mature markets, but above GDP growth levels in high growth geographies. Products such as hair conditioners, fabric softeners and dishwasher detergent are clearly not necessities and may even require the purchase of domestic appliances before they can be used, so the penetration of these end-uses continues to increase.

Transportation

At just over 5 percent of our Specialty Chemicals revenues, Transportation is the smallest end-user segment. As is the case in Buildings and Infrastructure, we sell a wide variety of products, generally used in the manufacture of automotive plastics, primarily via our salt/chlorine and organic peroxides platforms. Over recent years, these businesses have benefited from market recovery following the economic downturn, but these markets are now growing steadily at roughly GDP growth rates.

Market leadership positions

 

 

Functional Chemicals

1st

Chelates and micronutrients

 

Organic peroxides

 

 

Industrial Chemicals

1st

Chlorine merchant (Europe)

 

Monochloroacetic acid (MCA)

 

 

Pulp and Performance Chemicals

1st

Bleaching chemicals

 

Colloidal silica dispersions

 

 

Surface Chemistry

1st

Industrial applications

 

Agricultural applications