A McKinsey and Company report states the specialty chemicals industry in India has the potential to grow to $80bn to $100bn by 2020. The firm estimates the size of the Indian speciality chemicals industry at $22bn at present, reported the Hindu Business Line.
Speciality chemicals have specific end-uses, and are tailored to their applications, like pesticides, fertilizers, dyes and pigments, colourings among others.
The sector could attract $20bn to $25bn in investments with the opportunity to create 7-8 lakh additional jobs in the speciality chemical sector, the McKinsey report added.
Globally, the chemicals industry is the largest manufacturing industry, which recorded sales worth $2.5 trillion in 2010; of which speciality chemicals has a 20% share. A third of the business in this industry could potential move to Asia by 2020, excluding Japan, McKinsey noted.
McKinsey's report states that the key for the success of speaciality chemical industry in India will lie in the development of the sector. Products would need to be sold at the right prices and at the right time. The study emphasized the need for mergers & acquisitions and partnerships to achieve growth and thereby building a strong value proposition that attracts talent.
McKinsey's suggestions include government encouragment for speciality chemicals manufacturers to set up shop in Petroleum, Chemical and Petrochemicals Investment Regions (PCPIRs) across India; upgradation of training institutes among others.The firm also added that the government should establish a forum to define the relevant consumption of the industry, establish a database of inventory of the country’s chemical sector and drive innovation in the industry.