Chemical manufacturers are seeing a growth in product demand. While some industry sections are experiencing only a small growth, other areas are showing a double-digit increase in sales. Fine and specialty chemicals are two of the sectors enjoying a significant upswing.
Pharmaceutical production is re-shoring, with an upswing in U.S. manufacturing. Concerns regarding the quality of drugs being produced is one factor in this change.
The U.S. Food and Drug Administration (FDA) is also approving new drugs more quickly. The time from Phase I (small group testing) to Phase III (large scale testing and marketing) has decreased. While clinical trials still account for a considerable portion of the development-to-market time, the FDA is reviewing up to 90 percent of new drugs within 10 months. Drugs considered a priority may be approved within six months.
A great deal of growth in the research and production of fine chemicals can be seen in new cancer treatments reaching the market. New methods of medical treatments also are contributing to industry increases. Neulasta, used after chemotherapy to increase white blood cell production, has been approved for use in an on-body injector. The patient no longer has to return for an injection; it can be received at home.
Due to the expiration of numerous patents for popular medications, generic versions are also leading to more production and strategic changes. Fortune predicts continued pharmaceutical growth as the world’s population ages and the demand for health solutions increases.
Up and Downs in Specialty Chemicals
Lower energy costs have both positive and negative effects on the chemical industry. Growth for biofuels may slow due to a reduction in oil costs. The need for chemicals used for fuel extraction may also decline. Manufacturers that diversify can avoid an impact by changes in focus.
Specialty chemicals used in plastics are expected to remain strong and the cosmetics industry should see growth. Polyethylene and polypropylene demands are predicted to increase by 5 percent yearly. Anti-aging products will remain in strong demand even as consumers look to ingredients that are more natural.
With growth in chemical markets comes the need for new technology and production methods. Equipment used in chemical manufacturing must also continue to improve to keep up with the production demands.