The Global Specialty Pulp and Paper Chemical Market size is forecast to reach around $25 billion by 2025, after growing at a CAGR of 5% during 2020-2025. The consumption of specialty chemical is growing in the processing of pulp and manufacture of paper to enhance the quality of pulp and paper. Furthermore, the growing demand for packaging and sanitary and household grades of paper are also driving the growth of specialty pulp and paper chemical Market share during the forecast period. Besides, the growing focus of the pulp and paper producers for improving profitability, meeting customer needs, and implementation of technological change, mainly to meet health, safety, and environmental regulations are also contributing to the growth of specialty pulp and paper chemical market size during the forecast period.
Type – Segment Analysis
The functional chemicals segment holds the largest share of more than 30% in the specialty pulp and paper Chemical market in 2019 and is projected to grow at a substantial rate during the forecast period. This growth is attributed to the widely consumption of pigment binders and dry-strength additives in China for packaging applications. Furthermore, the increased customer demand for safety, cost, durability, and sustainability of paper products drive the demand for functional coating chemicals for papermaking, which in turn propels the growth of this market during the forecast period.
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Application – Segment Analysis
The packaging segment held the largest share of more than 35% in the global Specialty Pulp and Paper Chemical market in 2019. This is attributed to the growing food and beverage industry in the developed and developing regions. Additionally, increasing uses of carton board and containerboard from residential, commercial, and industrial sectors of North America is likely to drive the growth of this market during the forecast period. Furthermore, the growing demand for lightweight, biodegradability, and recyclability products is also driving the growth of paper packaging, this, in turn, drives the growth of this market during the forecast period.
Geography – Segment Analysis
Among the regions, the APAC holds the largest share of more than 40% in the global Specialty Pulp and Paper Chemical market followed by North America and Europe during the forecast period. The growing pulp and fiber treatment chemicals like bleaching and pulping specialties and deinking agents and increasing import of wastepaper and paperboard for conversion to pulp across China and India are fueling the growth of this market in the APAC region. Furthermore, the growing consumer and e-commerce sectors are also contributing to the growth of Specialty Pulp and Paper Chemical market share across the APAC region. Furthermore, the growing population, industrialization, and rise in disposable income are expected to generate a demand for paper-based packaging across the region. This, in turn, is likely to drive the specialty pulp and paper chemical market in the APAC region.
Drivers – Specialty Pulp and Paper Chemical Market
Increasing focus to enhance consumer services by specialty chemical manufacturers
Development in supply chain management, strategic sourcing, and e-commerce has increased transparency and awareness of the customer. Whereas, the E-commerce the market has lifted the food packaging industry, which is rapidly evolving in emerging countries such as India, China, and Africa. As a result, in some areas, the specialty chemicals industry is becoming more commodity-like as companies are selling their goods on cost rather than quality. After imposing price increases to account for higher costs of R&D, energy, and raw materials, the specialty chemicals industry is now trying to improve its margins. By becoming more service-oriented, several specialty chemical companies are trying to increase barriers to accessing their markets. They concentrate less on goods and more on customer-specific support services. The use of specialties chemicals in paper and pulp industry, the specialty chemical industries have long been willing to provide services alongside products.
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Challenges – Specialty Pulp and Paper Chemical Market
Availability of lack of skilled workforce, natural resources, and environmental factors
The selection of proper material composition is one of the most challenging factors. However, if there is a greater difference in material composition, then there should be a greater difference in their pH range that leads to an increase/decrease in the pulp and paper quality. Hence, the highly skilled operator is required to select a proper material composition in order to maintain the quality of the end product. Furthermore, the pulp and paper mills have become highly regulated because of the high use of natural resources that acts as a restraining factor for the growth of the Specialty Pulp and Paper Chemical market. Whereas, the availability of wood resources for fibers have become costly and scarce worldwide. Hence, due to which there is a growing trend to reduce virgin fiber content by replacing it with inorganic fillers and recycled fibers globally. These recycled fibers produce weaker base sheets that result in a greater need for strength and performance additives. This, in turn, driving the need for efficient and robust chemicals for diverse fillers in both the base sheet and specialty coatings. Furthermore, as Paper mills are one of the highest water consuming industries of today, so the availability of water resources for paper and pulp industry is also becoming a challenging factor for the growth of this industry. For instance, for every 1 a pound of wood pulp used to make a paper product, more than 99 pounds of water is required. Hence, the lack of skilled workforce and natural resources acts as a challenging factor for the growth of this market. Furthermore, the growing uses of specialty chemicals for various recycled pulp and paper making applications act as a restraining factor to the growth of this market due to the presence of various harmful chemical ingredients. These ingredients act as a harmful chemical to the environment.
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the Specialty Pulp and Paper Chemical market report. Major players in the Specialty Pulp and Paper Chemical industry outlook are Akzo Nobel N.V., Evonik Industries AG, Solvay S.A., BASF SE, Nalco Holding Company, Buckman Laboratories International, Inc., SNF Floerger, Bostik, The Dow Chemical Co., and Kemira Oyj, Shell Chemicals,, Inc., Surmet Corporation, among others.
In May 2018, BASF SE and Solenis engaged an agreement to syndicate BASF’s paper and water chemicals business with Solenis to together form a customer-focused global specialty chemicals company. The joint company formed is expected to function under the Solenis brand and will provide cost-effective solutions for customers.
In October 2017: Bostik, specialty adhesive company opened a production facility for hot melt pressure sensitive adhesives for various end-use industries. By the move, company aims to expand its foot-print in growing Asia specialty chemicals market.
North America and Europe are projected to witness significant growth in the global specialty pulp and paper chemical market during the forecast period owing to growing consumption of processing aids for paper and board manufacture across the region.
The outbreak of COVID-19 pandemic worldwide has a major negative impact on the global economy, industrial and manufacturing sector, and consumer sector. Due to this COVID-19, the growth of paper and pulp and chemical industry is projected to decline for the year 2020-2021, which in turn decline the growth of global specialty paper and pulp chemical market during the forecast period.
The high cost of the specialty chemical and stringent environmental regulations are hampering the growth of Specialty Pulp and Paper Chemical market during the forecast period.
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