Overview
The Thai chemicals industry stood at US$ 1.78 billion in 2019. It is expected to reach US$ 3.04 billion by 2025 accounting a CAGR of 9.3%. The demand for chemicals is expected to expand by 9% per annum by 2025. The petrochemicals demand is expected to record a 7.5% CAGR between 2019 and 2023, with polymer demand increasing at 8%. The agrochemicals market is expected to witness an 8% CAGR to reach US$ 37 Million by FY22 and US$ 47 million by FY25.
The chemical industry in Thailand is diversified to large extent. It produces around 80,000 commercial products mainly in the following categories:
-Inorganic And Organic
-Drug And Pharmaceutical
-Plastics And Petrochemicals
-Dyes And Pigments
-Specialty Chemicals
-Pesticide Agrochemicals And Fertilizers
The specialty chemicals constitute 22% of the total chemicals and petrochemicals market in Thailand. The demand for specialty chemicals is expected to rise at a 12% CAGR in 2019-22.
The 5 triggers for the speciality chemicals according to the JM financial report are- (1)domestic availability of raw material at competitive prices, (2) strong demand growth in consumer industries and a domestic industry that supports ‘premiumisation’ of products, (3) competitive manufacturing costs, (4) investment in R&D and (5) an ecosystem that supports the industry and innovation.
The growth drivers of the industry are: growing disposable incomes and increasing urbanization along with increasing domestic consumption, promising export potential, policy support- PCPIRs, focus on speciality segments, world-class engineering and strong research and development sector in Thailand. Moreover, the support received from the government is helping the industry to grow at an accelerating pace.
Current Trends
The chemicals industry is going through a significant period. Several trends are combining or colliding to create a very different future. The transformation in the sector is powered by globalization, digitalization, regulatory pressures, and technological improvements driving product and chemical formulations. Many of the established players are becoming increasingly aware of the changing scenario. One can anticipate the transforming landscape from the increase in interest in Mergers and Acquisitions.
This new world creates both threats and opportunities for chemicals companies. To be successful in the future, they will need to be much clearer about how they create value for customers in ways that their competitors cannot. Even if companies choose to stick with their current value propositions, they will need to build new business capabilities map if they want to continue being successful in the new environment.
The chemical industry in Thailand employs over 200 thousand people. Thailand's total contribution to the global chemical industry stands at 1.4%. Its present GVA is about 1.24% and has an export share of 12.5%. Thailand ranks 24th in exports and 16th in imports of chemicals (excluding pharmaceuticals products) globally.