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S OCM A S P E C I AL FE AT UR E

SOCMA Members Have Positive Outlook for 2017 for Specialty Chemical Manufacturing in US, EU REACH could pose obstacle to introducing new products Despite the impact of the recent presidential election, lackluster global growth and a host of mergers and acquisitions, SOCMA members are optimistic about the specialty chemical market in both the US and EU as they look ahead to 2017. However, at least one company feels the looming 2018 REACH registration deadline could pose a big obstacle for introducing new products in those markets. “We are forecasting a strong 2017 for specialty chemicals in the US and EU,” said Jay Dickson, President of Nation Ford Chemical, a specialty chemical manufacturer in Fort Mill, SC. “Additionally there will be pockets of high growth in China and, of course, some contraction, as Beijing is cracking down on the higher polluting commodity production and companies that do not have proper waste emissions treatment.” Dickson said his company has a positive outlook over a two-year horizon. “Growth is expected in the commercialization of higher value added products in the specialty chemical sector.” KMCO CEO John Foley says he feels that the specialty chemical sector will keep a tight rein on capital investment, which “leaves custom manufacturers such as KMCO in a favorable position to support these companies’ growth or restructuring of existing production via levering his company’s installed capacity.” KMCO, LLC, located in Houston, TX, is a specialty chemical

Jay Dickson, President, Nation Ford Chemical Inc

manufacturer and toll processor to many of the world’s largest chemical companies. “Our growth can be significant by levering ‘blocking and tackling’ productivity improvement and upgrading our utilities,” Foley said. “We have the ability and the strong intent to double our custom manufacturing volumes.” According to Michael Gromacki, President of Dixie Chemical, Inc, a specialty chemical manufacturer located in Pasadena, TX, merger and acquisition is going on both upstream and downstream and is creating some challenges in the specialty chemical sector. “Your customer base is consolidating and your supply chain is consolidating, and it is resetting new relationships,” Gromacki said. “This growth and acquisition is great for the companies involved, but there are a lot of other companies affected by it as well. Consolidation in the next year or so is going to be a factor, not necessarily a bad factor overall, but it’s going to be a factor.”

John Foley, CEO, KMCO LLC

54 Speciality Chemicals Magazine 36.08 November 2016

Dixie Chemical is also seeing commodity swings. “Some materials are long that are benefitting specialty chemicals, and some are getting tighter,” Gromacki said. “So the commodity swings are just things we have to keep track of. These are two issues we will see going forward in the next year or two.”

So what are the growth drivers for these companies?

Nation Ford says its products that improve performance, or the quality of life, will drive much of the growth in this sector. “The US and EU are the leaders in technological advancement in chemical manufacturing, and that will fuel growth in these regions.” The specialty sector is in a stable growth situation, according to Gromacki. “Our fuel and lube market and thermoset market are growth markets, and our paper market is stable and growing at the GDP level.”

Michael Gromacki, President, Dixie Chemical

www.specchemonline.com

Speciality Chemicals Magazine November 2016  

Volume 36 Issue 08

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