The world market for colorants comprising dyes, pigments and intermediates is presently estimated at approximate value of US$ 27 billion. During the last decade, the industry was growing at an average growth of 2-3% per annum.
In the colorants market, Asia-Pacific accounts for the largest share. This region is one of the key markets for dyes and pigments production. In the Asia-Pacific, India and China are the important countries contributing towards the growth of colorants market.
Other countries in the world market contribute nearly 87.5% of the global share, and India accounts for 12.5%. The Indian colorants industry touched US$ 3.4 billion in FY’10 with exports accounting for about 68%.
Specialty chemical industry is a knowledge driven industry and it has been growing rapidly at 1.2 to 1.3 times of GDP growth rate (approx 12%) over the last five years. It currently stands at around US$ 21.5 billion.
Indian specialty chemicals market size is approximately US$ 23 billion, and it has seen strong growth at 14% per annum. While the growth rate is strong, still the consumption level of specialty chemicals and additives is very low in India as compared to other peer countries.
Colorants have a large number of applications ranging from paints & coatings, textile, construction, printing inks, and plastics. The major driving factors of colorants market are growth in end user industries, rising demand for high performance pigments (HPP), and rising preference towards environment-friendly products.
The factors restraining the growth of colorants market are raw material price volatility, its global over capacity, and environmental concerns. Some of the trends witnessed in colorants market are shifting of the manufacturing facilities from the US and Europe to India, China, and Taiwan and the rising preference towards eco-friendly products.
Exports of colorants are estimated to grow to US$ 4.9 billion by 2017. However, the success of this sector will depend on how well it manages its key challenges, some of which include dependence upon imports for intermediates, high fragmentation, small capacities and limited focus on technology up-gradation.
The global colorants market is projected to grow at a CAGR of 3.6% from 2013 to 2018 and reach 11 million metric tons by 2018. Asia-Pacific, with its thriving economies and rapidly expanding manufacturing bases, is expected to experience highest consumption during the next five years.
Chemical sector growth rate is based on the growth potential of specialty chemicals, which is expected to grow at 13-17% p.a. over the next five years.
Domestic demand of specialty chemicals is expected to follow an accelerated growth path. This demand is mostly driven by the strong growth outlook for end use industries. This along with increased adoption of specialty chemicals and newer applications can propel the growth further.
India exports specialty chemicals to nearby Asia-Pacific countries which don't have competitive scale of production. India also exports to developed countries of Europe and USA where it leverages its low cost of production and quality talent pool. The critical success factors for most of the specialty chemical segments include understanding of customer needs and product/ application development to meet the same at a favorable price-performance ratio.
Currently, the domestic specialty chemical producers also face challenges related to feedstock availability, higher operational costs, outdated technology/process, limited investment in R&D and a negative perception amongst end consumers.
