he numbers may differ but forecasters agree that the specialty chemicals market is a trillion dollar enterprise with a strong growth potential. Increasing demand from end-users and technological advancements are key factors fostering growth for specialties, used as catalysts, intermediates, components or protectants in industries ranging from plastics and pharmaceuticals to petroleum products.
Research and Markets is amongst the most upbeat. In its “Specialty Chemicals – Global Market Outlook (2017-2026)”, it projects the market for specialities will grow at a compound annual growth rate (CAGR) of 6.5% to reach US$1.97 trillion by 2026 from US$1.11 trillion in 2017.
Expansion in the different market segments varies. Based on type, the agrochemicals segment is expected to outpace the average growth because of the pressing need to improve crop yields in declining arable land to feed the world’s growing population. Demand for oilfield chemicals is also expected to strengthen with the recovery in crude oil prices, and with it, oil and gas development.
By geography, the Asia Pacific with its growing population and rising affluence is expected to be the biggest revenue contributor. Increase in agriculture as well as food, cosmetics and other manufacturing activities in countries like China and India will contribute to the market’s growth.
Spurred by improving prospects, industry majors are tracking east. Many are opting for Singapore leveraging on its well-developed energy and chemicals infrastructure and well-honed capabilities to undertake a range of activities, including regional headquarters functions, manufacturing and research and development (R&D).
Today, there are over 100 companies involved in specialty chemicals production and research. While production output may be small, it is big on value added. In 2017, Singapore’s specialty chemicals generated a total output value of S$9.2 billion, accounting for 11% of the chemicals cluster revenue but 22% of the cluster’s value added.
Singapore’s focus end-markets include lubricant additives, oilfield and water chemicals, consumer care, agricultural chemicals and animal health and nutrition, as well as functional chemicals such as surfactants and function polymers.
Lubricants and Rubber
Used to enhance efficiency and improve the performance of engines, lubricant additives are continuing to enjoy higher demand on expanding applications. Research and Markets projects that the global lubricant additives market will grow by a CAGR of around 3% during 2018-2023 to reach US$18 billion by 2023.
The automotive industry is driving sales for lubricant additives. While the growth rate of vehicle sales may have slowed, it is still at historic highs. IHS Markit estimates that around 94.5 million units of light vehicles were sold in 2017 globally – up 2.4% over 2016.
It expects sales will continue to edge up by 1.5% in 2018 to 95.9 million units. Asia, particularly South and Southeast Asia, will outpace the global average, increasing by 7.5% and 7% respectively.
Following multi-million dollar investments, Singapore is an expanding base for the production of lubricants.
Afton Chemicals has developed its chemical additive manufacturing facility on Jurong Island under a two-phase programme. Totalling S$380 million, it is integral to Afton’s plans for Asia.
Speaking at the opening of the Phase II expansion in September 2018, Afton Chemical’s president Gina Harm said, “This facility was key to Afton’s plans to ensure that our products are ‘Made in Asia for Asia’. Our Jurong Island plant now has the full capability to produce core engine oil additives that we need for the Asia-Pacific region.”
With the S$222-million expansion, the Singapore plant can produce advanced ashless dispersants and anti-wear components, which are critical in several of the company’s products. It will also help passenger vehicles and commercial vehicles meet performance standards of the future.
“Asia’s rapid urbanisation and growth is driving the demand for transportation fuel and specialty chemical products. Afton’s Phase II expansion is testament to the attractiveness of Singapore as a hub to capture growing opportunities in the region, and the ability of our workforce to undertake high value-added manufacturing,” said Cindy Koh, director, Energy & Chemicals, Singapore Economic Development Board.
Spurred on by Asia’s demand, Chevron Oronite, Shell and ExxonMobil have also ramped up their lubricant additive production in Singapore.
At its 23-hectare site on Jurong Island, Chevron Oronite has added a carboxylate production unit to manufacture sulphur-free detergents, used to produce environmentally friendly fuels and lubricants. The new plant has doubled the company’s global production capacity for carboxylate.
Shell completed its integrated lubricants and grease production plant in Tuas in November 2017, the third largest plant in the group globally and second largest in the Asia Pacific. Located next to the Singapore Lube Park, the facility can produce up to 430 million litres of lubricants and grease every year. Products from the plant are being shipped to over 40 countries, mainly in the Asia Pacific, which accounts for more than 40% of the global market for finished lubricants.
As for ExxonMobil, the chemicals and energy major completed its lubricant facility expansion earlier in the year. Located next to the company’s refinery in Shipyard Road, it comprises a grease manufacturing plant, its biggest in the Asia Pacific, and a synthetic lubricant manufacturing facility.
As more vehicles hit the road across the region, it has also fuelled the demand for synthetic rubber which is being used in making new-generation green tyres with enhanced performance, lower fuel consumption, improved safety and durability. By using tyres with low-rolling resistance and reduced tyre abrasion, drivers can cut down carbon dioxide emissions from their vehicles and reduce the use of fuel, to comply with increasingly stringent regulations on vehicles.
Singapore is one of the largest manufacturing sites for synthetic rubber globally following multi-million dollar investments by industry leaders, including LANXESS, Asahi Kasei, Sumitomo, Zeon and ExxonMobil.
Animal Health and Nutrition
Demand for meat from livestock and poultry animals is growing, and with it the demand for animal feed. Population increase, which is pushing towards eight billion globally, increasing per capita income and growing preference for protein-rich food are propelling growth in animal feed.
As the nutritional value of the meat sourced from animals, along with their weight and flesh quality, can be beefed up when fed with proper food supplements and nutrients, Technavio expects that the global animal feed market will enjoy a CAGR of almost 4% between 2018 and 2022.
The Asia Pacific – the world’s most populous region – is leading the way in terms of market dominance as well as growth. The region accounted for nearly 47% of the animal feed market in 2017.
Driven by Asian demand, Evonik has ramped up its production of methionine, an essential amino acid used in animal feed. Construction of a second methionine complex is underway. When completed in 2019, the German group will have a combined annual capacity of 300,000 tonnes, making Jurong Island the largest methionine production site in the world.
The specialties ecosystem continues to expand as more companies come to appreciate the value of being based in Singapore.
In July 2017, Novacap began production at its new sodium bicarbonate plant on Jurong Island. With a production capacity of 120,000 tonnes, the plant is well placed to meet Asia’s growing demand for sodium bicarbonate for healthcare, dialysis, personal care, and food and industrial applications.
Operated by Novabay Pte Ltd, the fully automated plant is the first in Singapore to capture carbon emissions from neighbouring companies on a large scale for use in its manufacturing process. This is in sync with Singapore’s aim to grow the industry in a competitive and sustainable manner.
In the same year, Huntsman Corporation completed a major expansion of its amine plant on Jurong Island, more than doubling its previous capacity. Together with specialty amines production in Conroe, Texas and Llanelli, Wales, the 50,000-ton Singapore facility will enable Huntsman to meet the growing global demand for specialty amines and strengthen its leadership position in amine technology. The project also included backward integration in the form of a purpose-built alkoxylation unit consuming locally sourced feedstocks to support the production of polyols and alkoxylates.
Specialty amines are used to improve the properties of many products, including coatings, herbicides, adhesives and composites. They can be found in a variety of applications including wind blades, agrochemicals, oilfield and construction materials and specialty plastics.
“The expansion of Huntsman’s manufacturing plant on Jurong Island, more than doubling the site’s capacity, is reflective of Singapore’s attraction as a strategic node in global supply networks,” said Cindy Koh, director, Energy & Chemicals, Singapore Economic Development Board. “We will continue to build on our strong foundation as an integrated chemicals hub, from the provision of locally sourced feedstock by dedicated pipeline and infrastructure, and logistic support supplemented by excellent connectivity to growing markets, to enable the industry’s growth in specialty chemicals.”
In April 2018, Evonik opened a research hub in Singapore as part of its efforts to expand the company’s R&D footprint. Located at Biopolis, the centre is undertaking research in functional surfaces and additive manufacturing, and will be a base for tissue engineering project.
With the research hub, Evonik is expanding its collaboration with public and private research institutions and organisations in Singapore. The German company has forged a partnership with Nanyang Technological University to develop new technologies in additive manufacturing for industrial applications.
EDB chairman Dr Beh Swan Gin said, “Evonik’s choice of Singapore as the location for this research hub is a statement of confidence in our research capability and availability of skilled talent. We look forward to the team at Evonik Asia Research Hub generating innovative and high-impact solutions for their customers in the region and beyond.”