Capacity expansion projects will drive strategic alliances between automation vendors and key value chain participants, finds Frost & Sullivan
MOUNTAIN VIEW, California, Oct. 1, 2015 /PRNewswire/ -- Chemical manufacturers in the United States (US) are slowly moving away from the bulk production of price-sensitive basic chemicals to low-volume, high-margin specialty chemical production. The ability for manufacturers to diversify their product portfolios and target a wider spectrum of end user applications makes specialty chemical production a more lucrative option in the current setup.
Recent analysis from Frost & Sullivan, US Specialty Chemicals: Roadmap to Win and Drive Customer Value (http://www.frost.com/ne17), finds that the market is expected to witness a modest growth rate of one to three percent between 2014 and 2016 due to the volatility of oil and gas prices. The study provides a concise assessment of automation opportunities in the US specialty chemicals market by evaluating both greenfield and brownfield projects announced between 2014 and 2016.
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From a regional standpoint, the Gulf Coast accounted for over 75 percent of CAPEX investments in specialty chemicals last year primarily due to future export scenarios and its proximity to low-cost feedstock.
"Major specialty chemical projects in the US that are scheduled to start between now and 2016, indicate a greater push toward brownfield capacity expansions," said Frost & Sullivan Industrial Automation & Process Control Senior Research Analyst Rahul Vijayaraghavan. "With the average CAPEX spent on brownfield projects hovering between $80 and $100 million, automation vendors are looking to form strategic partnerships with key value chain participants, such as systems integrators, to leverage their application expertise and competitive pricing."
Applying a customer-centric approach will be crucial to win contracts as there is a high degree of innovation and customization associated with manufacturing operations.
"From an automation standpoint, as specialty chemicals utilize batch manufacturing principles in the facility, it is essential for vendors to innovate and evolve their current solution offering," added Rahul. "Furthermore, as recipe management, production planning and scheduling account for nearly 60 percent of all automation applications in the batch-centric specialty chemicals market, strengthening these processes should be a focal point for automation vendors"
US Specialty Chemicals: Roadmap to Win and Drive Customer Value is part of the Industrial Automation & Process Control (http://ww2.frost.com/research/industry/industrial-automation-process-control) Growth Partnership Service program. Frost & Sullivan's related studies include: Cybersecurity Implications in the US Chemical Industry, Global Pump Trends—The Chemical Industry, and Growth Trends and Dynamics for Automation in the US Chemicals Market. All studies included in subscriptions provide detailed market opportunities and industry trends evaluated following extensive interviews with market participants.
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US Specialty Chemicals: Roadmap to Win and Drive Customer Value
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