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Sub-Saharan Africa Base Chemicals Market
Frost & Sullivan, Oct 2010, Pages: 134
This research service provides analysis of the base chemicals market in South Africa, both organic and inorganic base chemicals are analyzed. An overview of the Nigerian, Kenyan and other west, east and southern African countries is provided in the research service. Insight into the key challenges, market drivers, and restraints facing base chemical industry participants is provided. Supply and value chain analysis is provided for refineries and non-refinery chemical companies in South Africa. An analysis is provided for base chemical end-user markets and industries which use products manufactured using base chemicals
Research Overview
This Frost & Sullivan research service titled Sub-Saharan Africa Base Chemicals Market offers a comprehensive overview of the market including industry challenges and market drivers and restraints. The research service provides revenue forecasts along with strategic recommendations informing firms of key market success factors.
This analysis is available through our Chemicals & Materials Growth Partnership Services programme. With continuous access to intelligence and resources from all seven perspectives of the Complex Business Universe, the Growth Partnership Services programme ensures that you and your Growth Team™ are able to maintain a 360 Degree Perspective of the market. This comprehensive, objective information allows your company to mitigate risk, identify new opportunities, and drive effective strategies for growth.
Market Overview
Rising Demand for Consumer Durables Boosts Uptake of Base Chemicals
The base chemicals market forms the foundation of the chemicals industry in particular and of the manufacturing sector in general. Organic and inorganic chemicals produced in this industry are used in a wide range of applications from polymer production to solvent production. “Organic and inorganic chemicals form the bedrock of the chemicals industry,” notes the analyst of this research. “Developments in the end-user markets such as polymers, solvents, paints and coatings therefore greatly impact demand for base chemicals.” The recent economic downturn had dampened the demand for consumer durables such as automotives, appliances and furniture. Subsequently, demand for base chemicals experienced a decline. The base chemicals market is highly impacted by developments in the general economy. End-user markets such as automotive plastics, plastics packaging, mining chemicals and explosives are cyclical sectors with demand from these sectors depending on economic performance.
The recent economic downturn underlines this fact as shown by the slump in commodity prices negatively impacting margins for mining chemicals and explosives manufacturers. “A decline in disposable incomes means reduced demand for consumer durables such as cars, appliances and furniture,” explains the analyst. “This, in turn, has a domino effect, leading to a slump in demand for base chemicals.” In Sub-Saharan Africa, South Africa and Nigeria are the two countries with developed manufacturing sectors. The bulk of the countries within the region rely on importing goods from different markets.
Investments across Value Chain and Forward Contracts to Buffer Base Chemicals from Fluctuations in Market Dynamics
Base chemicals are supplied to industries that are experiencing intensifying competition from relatively less expensive imports from Asian countries such as China and India. Heightened competition presents a challenge for suppliers of chemicals to the affected end-user markets, such as polymer production. “Technological advancements will pose a challenge for the base chemicals market as certain applications become obsolete or redundant,” adds the analyst. “This is demonstrated by the development of new substrates from novel processes.”
Investment by chemical companies across the value chain will provide a buffer against the fluctuating market dynamics that characterise the chemicals industry. Forward contracts for the delivery of feedstock (crude oil) by refineries can be entered into, in order to lock-in the supply of essential inputs. For other market participants along the value chain as well, forward contracts are set to assist in avoiding manufacturing bottlenecks. “The nature of the global economy is such that companies do not just compete with local/regional competitors,” concludes the analyst. “Compliance with global standards by chemical companies within the sub-Saharan region is anticipated to allow chemical companies to supply across regions globally, if they can produce cost-competitively.”
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Organic chemicals
- Inorganic chemicals
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