Opportunities in speciality chemical abound- MIDA
15 Jul 2020
Speciality chemicals companies are encouraged to take the opportunity to explore the potential of leveraging Malaysia as their launch pad into the Asia Pacific market.
Malaysia Investment Development Authority (MIDA) said speciality chemicals provide a variety of chemical effects to finished products to enhance their performance and functions.
The speciality chemicals were organic-based and used widely in consumer products.
Companies could build upon Malaysia’s comprehensive local supply chain and ecosystem as well as strategic location as their preferred regional investment destination, according to MIDA.
“Asia Pacific is set to remain the largest market for speciality chemicals in terms of volume due to demand by established and rapidly industrialising nations such as India, China, Japan, South Korea and Taiwan.
“This growth was mainly driven by end-user industries such as food additives, cosmetic chemicals as well as pulp and paper,” it noted in its June Newsletter released here.
MIDA pointed out that the market for speciality chemicals has emerged as among the top segments of the chemical industry globally.
From 2019 to 2026, the global market of speciality chemicals is expected to grow at a compounded annual growth rate (CAGR) of 5.2 per cent, reaching US$316.4 billion (US$1=RM4.26).
Therefore, Malaysia is looking to venture into new sub-segments within the speciality chemicals segment, the investment promotion agency said, adding that the government will continue to support and strengthen this segment.
MIDA also highlighted that industry players have begun exploring the possibility to produce speciality chemical products directly from crude oil by using Crude Oil to Chemicals (COTC) technology.
It said non-fuel products such as catalysts, aromatics, white spirits or naphtha, wax and white oil offer a huge market potential to be explored.
These products can be used as additives for various industries such as food and beverages, construction and automotive.
Meanwhile, MIDA is actively encouraging speciality chemical manufacturers to adopt digitalisation and continuously seek out innovative, new technologies to enhance the quality of their product, optimise their value chains and ultimately align with market needs.
Its data showed that the chemicals and chemical products sub-sector was one of the largest contributors to investments in the manufacturing sector in Malaysia.
In 2019 alone, the sub-sector ranked fifth in terms of approved investments in the manufacturing sector, accounting for RM4.8 billion or 11.7 per cent of the total approved investments in the sector.