Assessing the Market Attractiveness for a Specialty Chemical
The client was a manufacturer of organic surface – active agents and chemicals used in formulation of fragrance and flavors. It had added a new product (derivative of a specialty chemical) in its product portfolio. The client was facing challenges in sourcing raw material for the new product from the local market. It had planned to set up a pilot plant for the production of the specialty chemical. Initially, the scale of the plant was conceptualised for the purpose of captive consumption. However, considering the application range of the specialty chemical and its derivatives in the fragrance and flavors and pharmaceutical industry, the client considered setting up a plant on a global scale and capacity to manufacture the specialty chemical.
To assess the feasibility of the same, the client requested UC to conduct the engagement.
To assess the market attractiveness, UC adopted the following approach:
- Identified over 200 derivatives of the specialty chemical and mapped their application industry
- A three pronged approach was taken to shortlist the important derivatives:
1) Identified derivatives having industrial application based on primary research findings - meeting industry personnel, secondary search and reference of industry literature
Understood the dynamics of the application industries, purpose, range and quantity of application
Growth and future prospect of application industry
2) Analysed trade information of India and major international countries to understand the trade pattern and identify the key derivatives traded, their quantities, volume and prices
- Conducted a detailed analysis for the selected derivatives
1) Assessed competitive intensity in the industry on a global scale
Players, products manufactured and capacities, plant location etc.
2) Demand-supply scenario in the market
3) Key success factors in different application segments
4) Analysed supply scenario for the selected derivatives in India
- UC conducted business risk analysis and determined the way forward for the client
The client received insights on the market situation for a specialty chemical along with a view of the feasibility of setting up a global scale manufacturing plant.