Chemical Industry : Global Trends, Emerging Challenges & Opportunities

Opportunities and Challenges in the Chemical Industry

Chemical Industry

The Chemical Industry is among the largest industries of the world, which is worth a few trillion dollars with millions employed in the industry. The chemical industry is inextricably linked with people’s lives, be it drugs/medicines, cleaning agents, thermoplastic furniture or synthetic garments, all of these are direct or indirect products of the chemical industry.


There are numerous opportunities in the chemical industry and at the same time, there are many challenges that affect its growth. The opportunities and challenges in the chemical industry would be discussed in further sections.


Opportunities in the Chemical Industry


 1. Reverse Special Economic Zones

Special Economic Zones or SEZs focus on exports, whereas reverse special economic zones or reverse SEZs focus on imports. Setting up of reverse SEZs outside a country would enable that country to import low-cost duty-free raw materials.


2. Export in Emerging Markets

There is a great potential for various chemical companies to capitalize on, whether small or big, through the emerging markets such as the Middle East, Asia-Pacific, and Africa. These nations are developing much faster than the developed nations of Europe and North America, paving way for export opportunities.


3. Alternative Fuel Utilization

A region with an alternative abundant fuel, such as coal can help in increasing its chemical and petrochemical production. There is an increase in demand for petrochemicals, which can be mitigated through the utilization of coal gasification technology to produce more chemicals and petrochemicals. This would offer a good opportunity to meet the increasing demand, which was earlier being met by increased import.


Challenges Encountered by Chemical Companies

1. High Taxes and Regulatory Problems

With the increasing cost of raw materials, the tax levied on raw materials is more than the tax levied on the finished products. This hinders many chemical companies from manufacturing more chemicals due to the high cost of raw materials and forces them to import the same chemicals with much lower taxes levied on them.

To add to this, the regulatory processes are complicated, which involve licenses and certifications for the establishment of chemical industries.


2. Remote Location and Inadequate Infrastructure

The distance between the location of the chemical industry and the demand region for the chemicals influence logistical transportation costs. Increase in the distance between the industry and the demand region would increase the overall cost of chemicals. 

The industry faces many infrastructural problems such as poor pipeline connectivity, improper railway depots, and insufficient power supply, these make it difficult for the chemical industries to obtain raw materials from the numerous chemical suppliers.


3. Lack of Feedstock

Feedstock or raw materials such as natural gas used in organic and inorganic chemical industry are not easily procurable in the market. Lack of feedstock in a region would make the chemical companies uncompetitive at the global level in the chemical industry. Whereas, regions with low-cost feedstock would have a monopoly over the global chemical industry for that niche. uses cookies to ensure that we give you the best experience on our website. By using this site, you agree to our Privacy Policy and our Terms of Use. X