Blog

CONSTRUCTION CHEMICALS

Whilst the housing boom in China seems to be passed its peak, there are still plenty of opportunities for the chemicals trader in the construction chemicals industry. Other Asian economies, such as Vietnam, India and Bangladesh still have relatively young populations that in the coming years will want homes of their own and the chance to settle down. This is sure to keep a need for construction chemicals.

Even mature economies like the UK and Portugal have housing shortages, and there is great pressure on the governments there to make building easier. This will be essential for the chemical industry as a whole, due to the high amount of chemicals used in modern construction. According to Al Greenwood from ICIS Chemical Business, “Housing is crucial because so much chemistry goes into construction, from polyvinyl chloride (PVC) to paints and coatings as well as synthetic fibres. The American Chemical Council estimates that each new home built represents some $15,000 worth of chemicals.”

Other chemical industry analysts note the importance of supply (as well as demand) as a market influencer.

As Sanjeev Gandhi, BASF’s top manager for the region recently stated, “For years now, Chinese chemical producers have struggled with overcapacity, but the outlook is improving. In particular, the construction sector, where China’s slowdown had been particularly sharp, is showing signs of life. This could stimulate demand for the myriad building materials supplied by chemical companies such as BASF.”

You can read more about his opinions for Asian chemicals in 2016 here.

Clearly there are opportunities for business in the construction chemicals industry, despite the slowdown in China. But is it the best sector in a successful industry?

AUTOMOTIVE CHEMICALS

Whilst the financial crisis of 2008 hit the automobile industry hard in Europe and even harder in North America, the restructuring that took place following the crash has resulted in a much more durable industry.

Meanwhile in Asia, car manufacturing has blossomed as the middle class in China, India, Korea and the rest of S.E. Asia has developed. This has led to a great many opportunities for chemical producers, upon whom the car industry is so reliant. Such that, according to Al Greenwood from ICIS Chemical Business, “Like housing, automobiles are an important chemical end market, and ACC estimates each vehicle contains an average of $3,500 worth of chemicals. These include acrylonitrile-butadienestyrene (ABS), polycarbonate (PC) and nylon; paints and coatings; and styrene-butadiene-rubber (SBR) in tyre production.”

As the latest car models contain less and less metal and more and more chemical compounds in improved designs, there are few who doubt the influence that the automobile industry will have on the chemicals industry. Those wishing to expand their chemical portfolio would do well to focus on those products that are key components in car manufacturing.

Furthermore, as the American economy is beginning to show signs of a full recovery from recession, automobile sales are expected to peak in the coming years. As Greenwood makes clear in his report, “Automobiles, another major chemical end-use market, should continue to perform well in the US. The automobile industry began recovering early from the recession and this year, ACC expects light-vehicle sales to reach 16.9m.”

But will the automotive chemical market outperform agrichem?

AGRICULTURAL CHEMICALS

With a growing world population, the long-term future for Agchem looks very bright, but the short-term may see much restructuring across the industry. The seemingly impending buyout of Syngenta buy ChinaChem (see BBC link here) is a large part of that, and other smaller to medium sized businesses may also need to find synergies to compete in what has traditionally been a small firm industry.

The one area which may see the most growth is Indian Agrochems, which is expected by many to exceed growth in other regions. As Jean-François Tremblay of Chemical & Engineering News explains why. “One reason is that the sales tax system will be reformed to lower and simplify the cost of transactions. In addition, the monsoon in 2016 will likely be better than last year’s because India rarely experiences two bad monsoons in a row. The rains matter to the economy in a country where two-thirds of the population is rural and dependent on agriculture.”

With so many Indians dependent on farming for their livelihoods, it seems likely that this will be a good investment area for chemical traders in 2016.

Whilst other sectors, such as polymers and plastics, biofuel additives and coatings, will also undoubtedly do well, many experts believe that 2016 will see automotive, construction and agrichem perform best. Or do you have a better investment plan?

You can see if your idea is working by tracking the chemicals market at SPOTCHEMI a.s. Buy and sell any chemical product, or just follow your competitors price offers.

Everyone in business needs networking, especially those in the chemical industry. Without it no one will know who you are or what your chemical products are.

Our parents and grandparents had an easier time of networking. In the days of the ‘Two-Martini’ lunch industries were smaller, more tightly-knit communities, where few products or people were unknown.

Today’s world is far noisier and busier, leaving less time for Martinis; even after work. Which means that chemical traders must work smarter not, harder, as no one can network an entire planet.

To help us with this 24/7 business environment, networking is increasingly moving online. So it is no longer necessary to make small talk with a handful of potential contacts out of the thousands in the conference hall. Instead, communities are forming where like minded business people can share non-confidential information, discuss industry trends and simply connect; person to person.

By doing so, they are making connections with like-minded business people, from trusted sources. Much like our forefathers did over long lunches, only because the communities have so many members, your networking efforts spread deeper and wider. Furthermore, contacts can be filtered, so that you know you are talking to the right people.

Check out these communities to see the modern face of networking. Achilles can be found at http://www.achilles.com/ or ASQ, which can be found at http://asq.org/communities-networking/topic-industry.html.

Whilst these communities offer general support, it is also useful to find networking sites for your specific products and niche industries. Whilst it can be informative to talk business with the Director of HR for a marketing company, it will only make you rich if you are in marketing.

Instead focus your online networking where your competitors, suppliers and potential clients are based. For example, https://www.spotchemi.eu/ is an ideal online, trading hub and networking community where you can meet people with a passion for industrial chemical products.

Specialised digital networking enables chemical traders and manufacturers, suppliers and buyers to meet new contacts and grow their businesses. It is time and cost effective, so is suitable for firms of any size, and being online it is also a global service that enables you to reach into new chemical markets, anywhere in the world, whenever you like.

Perhaps, we are being sentimental to romanticise the days of the long business lunch. For with it came the 6am business call to clients in a different time zone and the long haul flight to sign the contract.

So don’t miss the ‘good old days’, instead embrace modernity, for it means that you can simply network from home with your tablet. Could making business contacts be any easier?

With such intense competition in the chemicals industry, many businessmen are looking for new ways to break into new chemical markets, and it now seems that an entrepreneur from Cambridge University may have sniffed one out. That is because Dr Jenny Tillotson has patented a liquid delivery system that can be built into clothing or a device and dispenses a spray (scent, insect repellent, drug, aromatherapy etc.) that is activated by a ‘sensed biometric property or sound.’

As Tillotson says in her own words, “It can to be triggered by some kind of action or sound in the near environment, which could be a mosquito, music or snoring, even. It could be programmed to react to emotional response such as heart rate or body odour as well, which is really useful. It works for stress or anxiety in that case, so is very much for wellbeing.”

Her business idea is being promoted by the Arts and Hummanities Council, (http://www.ahrc.ac.uk/research/readwatchlisten/features/the-scent-of-things-to-come/) a British instituition which awarded Tillotson many grants over the years to develop her idea from her wearable ‘Smart Second Skin Dress’ (pictured), to the chemical delivery system of today. She recently won the ‘Most Contextual Technology Award 2015′ at the Tech Expo in London (http://www.ceb.cam.ac.uk/news/news-list/escent-oct15).

It has many possible uses, for example a sportsman may wish to have a dash of something up their nose at a crucial moment in a match or race, or medicine could be applied when a patient’s heartbeat reached a certain rate.

For now Tillotson’s company, Escent, is focusing on fashionable, wearable products that dispense fragrances for the ‘wellbeing’ market, such as aromatherapy users. However, Hugh Parnell, Tillotson’s business development advisor and Chairman of Cambridge Clean Tech believes that the idea, “… could well become viral. There are some very serious people in the fashion industry that have indicated interest in having a mechanism that demonstrates the ability eScent has. Department stores are interested too.

One clear market is the replacement for the perfume bottle and the ability to deliver an array of personal scents using small cartridges that can be replaced,” he says. “The other is wearable technology, fashion and perfume overlapping. The patent offers an array of uses that stretches from anti-malarial to something you might use in the bedroom to dispense pheromones.”

For now the key is to find the exact market for such a product, as well as financial backing to take it to market. But also to answer the question, ‘Who needs a wearable chemical dispenser?’

Would you wear one? What uses do you think this product may have? Let us know on our facebook (https://www.facebook.com/sspotchemi) or LinkedIn group (https://www.linkedin.com/groups/6716043) or follow the links to find out about other new chemical products and price changes in the industry.