R&D investments innovations boost industry
Waste Management Expo 2020 MAR 12&13 BIEC, Bengaluru, India

R&D investments and innovations to boost industry

12:10 PM, 11th November 2019
Vijay Ambati, President & CEO, Clearsynth
Vijay Ambati, President & CEO, Clearsynth.

In an interview, Vijay Ambati, President & CEO, Clearsynth views that the increased investment in R&D, demand for eco-friendly chemicals, capacity expansions by Indian specialty chemical companies and huge demand from pharma industry will fuel growth of the research chemicals market.

By Shivani Mody

Global trends making an impact on research chemicals.

With rising demands of innovative and high-performance chemicals globally together with tremendous pressure on developing environment friendly processes, the global trend in terms of demand is very encouraging for research & development (R&D) chemicals. The application of such high performance chemicals is diverse and vast. The recent innovation in electronics, automobiles, petrochemicals, semiconductor, biologicals etc, has created a huge potential for development and manufacturing of such high performance specialty materials that are chemically and biologically synthesized.

Pharmaceuticals have been showing huge demand in India largely in starting materials and intermediates space due to turmoil in China consequent to tightening of environmental norms. This has led to a closure of thousands of small and medium sized chemical producers. Thus there are thousands of such chemicals which are short in supply or under development requiring research chemicals for not only synthesis development work but also analytical R&D.

Further, the other strong advantage is the number of schemes and initiatives introduced by the present government to boost and promote economic development of the chemical industry under the ‘Make in India’ program.

Scenario in the research chemicals segment.

Majorly, three trends influence the strategic decisions of the global chemical producers and converge to challenge the chemical industry.

The gradually reducing availability of key raw materials and energy supplies is one of the issues faced by this growing industry. Also the matter of waste disposal has resulted in stringent environmental regulations. Global chemical companies are now operating as ecosystems ensuring sustainability and economy, resulting in less energy and resource consumption. Digitalization is leading the innovation in all major industries including chemicals. Digital technology will help chemical companies in many ways such as capturing critical data and drawing insights from it to achieve improved output at lower costs, scheduling preventative maintenance to minimize downtime, and facilitating accurate inventory planning to prevent stock outs.

The demand for chemicals continues to grow in emerging markets as their working-age population still is a huge driver for chemical industries. Shrinking product life cycles and the rush to commoditize products have increased the pace of globalization.

The market for specialty chemicals is expected to grow at a CAGR of around 5.17 percent during the forecast period of 2019 to 2024. Asia-Pacific dominated the market across the globe in 2018, owing to huge customer base leading to high demand for specialty chemicals and increasing industrial production. Asia-Pacific is further likely to retain its position due to robust growth of the construction sector, increasing demand for cosmetic products, growing investment and production in automotive industry, increasing electrical and electronics industry output, increasing demand for adhesives and plastic from packaging industry, and increasing installations of water treatment systems from the industries in the region.

India is the 3rd largest producer of chemicals in Asia by volume. Indian chemical industry, excluding pharmaceutical products, ranks 14th in global exports. The Indian chemicals industry is projected to reach $304 billion by 2025.

Pharma industry supporting growth of research chemicals.

Indian pharmaceutical business is third largest within the world and is one of the foremost developed industries. Here, the pharmaceutical industry is directly dependent on the chemical industry. The chemicals supplied are used for the production of many drugs and medicines. Many chemical industries are in business these days that will boost manufacturing as a whole or variety of pharmaceutical formulations ie, medicines prepared for consumption by patients. There are more than 350 bulk medicines ie, chemicals having therapeutic worth and used for production of pharmaceutical formulations. In comparison with other industries, pharma is the major consumer of the chemical industry.

The private sector produces nearly all the medicines and vaccines in the market. When a pharmaceutical company invests in R&D of new medicines and vaccines, it first screens for chemical and biological compounds that exhibit the potential for treating new or existing conditions. The chemicals supplied act as active ingredients in toothpastes, shampoos as well as many reagents. Many are used as catalysts for various drug preparations.

Indian pharmaceutical business these days is hierarchical in world category, in terms of technology, quality and type of different medicines. The chemical industry together with the chemical suppliers is important for the development of any country economically and technically; thus providing products and solutions in all sectors of the economy.

Adopting digitalization for research chemicals.

Digitalization has made the generation, collection and storage more convenient and affordable. At the same time, the digital mind-set of society has expanded, spurring a willingness to engage with digital technology as well as much higher expectations for the quality of user interfaces and level of service.

The combination of these factors has opened up new avenues for the chemical industry. Companies can use advanced analytics to extract management-relevant information from the large amounts of unstructured data that they generate. In the wider world, the chemical industry is an essential supplier to myriad other industries, and so the way these industries are being changed by digital adoption is in turn translating to opportunities and challenges for chemical companies.

Demands from users of research chemicals.

Specialty chemicals are particular products that offer a wide variety of effects on which several industries are solely dependent. These materials are used based on their performance and functions. The physical and chemical characteristics of single molecules or composition of the mixtures of the effect chemicals define the performance of the end product. Specialty chemicals find applications in various end-user industries across the globe, including construction chemicals.

An increased focus on R&D in specialty chemicals and a rise in commercialization & industrialization have boosted the growth of the global specialty chemicals industry. Additionally, development of eco-friendly specialty chemicals has further supplemented market growth. Going green is the biggest trend in the industry. Around two-thirds of specialty chemical manufacturers are currently implementing sustainable initiatives, which include bio-alternatives and use of energy-efficient separation methods such as crystallization.

Apart from this, companies are now more open to adopting new technologies and innovative models to get better access to novel technological improvements. Specialty chemical companies used to believe that all they needed was to improve their technologies in-house to maintain their position in the market. However, many have realized that leveraging new technologies from the new entrants in the market could help lower production costs and deploy more effective production procedures.

With the constant need to improve the performance and function of specialty chemicals and increased investment in R&D, the global specialty chemical market is bound to increase. Moreover, changing lifestyle of consumer and demand for eco-friendly chemicals is expected to create new opportunities in the future. Indian specialty companies are expected to invest in capacity expansion in the coming years, driven by increasing demand from domestic and overseas market.

Research chemicals dynamics for developed vs emerging markets.

The global chemical industry is matured, highly saturated in the developed countries, and prone to changes in economic conditions, stringent carbon emission policies, and regulatory compliances. The industry witnessed a decelerating growth in developed countries due to the economic downturn, which led to a decrease in production and demand from industries such as automotive, electronics, and construction. However, in emerging markets such as China and India as opposed to developed countries, the chemical industry is witnessing an upward trend, which is a positive sign for the overall market.

Specialty chemicals enhance performance, provide specific functionality to the end products, and offer a combination of innovation and customer service. The emerging markets look promising for the specialty chemicals industry as future growth is projected from developing countries such as China, India, Korea and Brazil.

The emerging markets offer new growth opportunities for chemical companies to grow and expand their market share by customizing their product offerings. With the growing middle-class population in developing countries and rising industrialization, the demand for improved crop quality drives the demand for cost efficient chemical systems.

The export scene for the specialty chemicals industry is set to grow by leaps and bounds in the emerging markets as a result of the sudden surge in the demand for niche chemical products across several major industries. Emerging markets have low labor costs, efficient manufacturing capabilities, and supportive government policies, which makes it a favorable destination for major global players in the chemical market.

Apart from these, governments in developing countries are developing friendly policies that facilitate the growth of the specialty chemicals industry by encouraging global players to invest in these regions, upgrading the chemical industries as well as manufacturing capabilities, and redesigning the industrial training institutes to build efficient domestic workforce.

Company’s research chemicals business and future plans.

At Clearsynth, we have been very successful in developing and manufacturing high performance R&D materials for our clients. We operate in 40+ countries and cater to demands of close to 4000+ regular customers in our reference chemical business. We are one of the companies who have a large inventory of such compounds in stock.

Our R&D lab and synthesis facility is located at multiple locations in India and abroad and have several exclusive tie-ups with CDMOs.

We are presently expanding our product portfolio of in-stock compounds basis the recent development in the pharma and non pharma industry, in order to serve our clients more efficiently. We have plans to expand our global footprints to other developing markets like CIS, Asia Pacific and Middle East by setting up distribution points. Our effort is also towards expanding our in-house R&D and analytical capabilities by investing in sophisticated instruments and equipment which will augment our capacities multiple fold. Our recent collaboration with Department of Atomic Energy, Government of India has been a turning point in development of technologies for products that are largely imported for its end use in India. This shall not only substitute import but shall also accelerate the exports to global markets due to its competitive price and high quality. These products are largely end used for NMR analysis, electronics industry, telecommunication and pharmaceuticals.

In-house focus on R&D and innovation.

As conveyed previously, we have signed a Technical Collaboration agreement with Department of Atomic Energy, Government of India for Joint development of product technology for its end use in Non-Nuclear applications.

The products that we are working on are primarily deuterated solvents like methanol D4, chloroform D, acetone D6, deuterium oxide, benzene D6, bromocyclopentane D9 etc.

We have been successful so far in commercializing number of such products which were 100 percent imported from the US and China into the country. These products are used a solvent during NMR analysis and used as a reagent / building blocks for synthesis of stable isotope labelled compounds, deuterated drugs, electronics and display industry and various other industries.

Services provided for the Indian market.

We provide end to end services for R&D and drug development companies.

Broadly we provide our services as follows:

Analytical R&D: We supply reference material like Stable Isotopes API Standards, Secondary certified standards, certified Impurities, metabolites, gluconarites, pesticide standards, etc. these reference materials are used in their testing for quantifying their analytical research.

Organic Synthesis R&D: We supply starting materials, intermediates, building blocks and deuterated reagents for synthesis of NCE to drug discovery and early development companies.

Custom Synthesis: We provide custom synthesis services to drug discovery companies for development and synthesis of NCE compounds. Due to lean management and highly efficient and capable technical staff, we undertake projects from number of top large discovery companies to whom we provide materials from Mg to Kilograms manufactured under cGMP norms.

Deuterated Drug Development services: we operate in this area with some of the most reputed large drug discovery companies in giving them end to end services like – screening of molecules, selection of soft point for deuteration, synthesis of compound in small scale, pK study, process and analytical method validation and complete technology transfer for commercial scale up. All the required assistance during pre-clinical and clinical is provided during the entire life cycle of this drug development work.

Analytical Services: Number of companies have no clue about degradation taking place in their final products and toxic impurities that keep building over a period of shelf life. We undertake projects from several such companies where the impurities are isolated and verified for its toxicity and quantification and characterization.

Government policies supporting research chemicals market.

The most foremost can be the regulatory factors. Harmonized guidelines for drug approvals, on-time screening of application, rationalizing application fees and filing cost, concessions from Government for R&D expenses are some of the factors that will promote R&D initiatives by Indian companies to secure important position in delivering Innovative products and high performance chemicals.

Challenges faced by research chemicals manufacturers.

For many years the global chemicals industry has been fighting declining margins, product commoditization, rapidly expanding competition in developing countries, and customers demanding more at lower prices.

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