With mushrooming urbanization and increase in investments, there is a need for aesthetics across the globe. Technological advancement has led to the shift of all the countries towards the health side-effects caused owing to pigments. There are concerns about the carcinogenic aspects of azo pigments used in various end-use industries. Focus on better performance and aesthetical quality is another trend. Strict government regulations, especially in developed regions against pollution and environmental concerns have increased the demand for bio-based azo pigments.
One trend that can be observed in several regions is the focus of governmental as well as private towards the need to reduce solid wastes that contain hazardous materials. Invigorated by strict regulations and the demand for sustainable products, the pigments industry has delivered a wide range of materials with significantly improved health and environmental properties. Developing sustainable products is a challenge for the pigments industry. Technological advancements in solid waste reduction containing hazardous material from pigment manufacturing is raising the bar for the azo pigments market, mainly in developed regions such as North America and Europe.
China to lead the charts with maximum sales and production of azo pigments
Globally, China remains the second largest economy and a key market leader across Asia Pacific. China is the world’s largest manufacturing hub for chemicals, owing to the availability of low cost labor and raw materials as well as the increasing demand for miniaturization of the chemical sector in the region. The Chinese chemical market plays a crucial role in the development of end-use industries and this trend is expected to continue over the next decade. However, to continue the growth of the country, manufacturers, especially from the unorganized sector, have to enhance the quality and complexity of products. An important characteristic of Chinese companies is their ability to innovate, spend on research and incorporate technological changes into their production processes. Such companies pose a strong challenge to foreign multinationals through their sheer ability to invest along the entire value chain.
The rearrangement of various manufacturing foundations to improve work productivity and enhance product quality is expected to boost the azo pigments market in the China. The shifting of production facilities from Europe and North America to China is expected to foster a significant growth rate for the azo pigment market over the forecast period.
North America and Europe are expected to give each other a cutthroat competition
The ink industries in North America, especially in the U.S., have become mainly dependent on Asia Pacific suppliers of raw materials and pigments owing to procurement cost. In the recent couple of years, there have been disruptions in the supply of certain pigments, owing to the sharp rise in the prices of some azo pigments. The acceptance of innovative technologies in the production of azo pigments is expected to increase the production capacity and also strengthen the positioning of the key players in the regions. The increasing productivity is expected to pave way for a bright future for the market in North America.
On the other hand, the organic pigment industry in Europe is experiencing dynamic changes, with external factors presenting industry executives with several challenges in different countries of
Europe. Leading companies are amalgamating their merger and acquisition strategies to their long-term business strategies. Market growth in European countries is expected to remain steady but at a slower rate, corresponding to the overall health of the regional economy. However, the Europe market is expected to present significant opportunities to the key players in the coming years.
A Synopsis of the Global Azo Pigments Market with Reference to the Global Chemicals and Materials Industry Outlook
Recycle and reuse practices are impacting the sales of virgin materials, resulting into lesser dependency on volume-driven growth. New materials are showcasing potential for driving value-based growth, but chemical companies are still some time away from achieving voluminous production, while maintaining high quality at the same time. Barring few exceptions, a majority of players are still prioritizing short-term volume growth over long-term value growth. Pressure on improving bottom-line is influencing manufacturers to improve efficiency and reduce operational costs. The impact of value-driven growth may not be visible in the short-term, but long-term outlook remains in favor of a balanced approach between value and volume.
Manufacturers are under increasing pressure to incorporate digital solutions in their offerings. Forward-thinking manufacturers are investing in technology to reduce human interference and streamline key operational aspects such as ordering and shipping. Resonating its influence over every industry, Internet of Things (IoT) has the potential to transform and disrupt the chemical sector. Connectivity through IoT devices is gaining traction, whereas product-level sensors on dispensing equipment and barrels are helping manufacturers track their consignments digitally. Through assessment of long-term benefits, chemical companies are capitalizing on digitization by adopting digital platforms & processes that eliminate human error in profit-associated operations.
Manufacturers continue seeking low-priced feedstock in a bid to marginally reduce pre-production costs. Industry leaders are joining forces to replace fossil fuel-derived feedstock with bio-based alternatives. However, concerns related to producing affordable and sustainable feedstock at mass scale remains a challenge. Access to quality and affordable feedstock will continue to remain a focus area for manufacturers. Chemical manufacturing processes are running on limited energy, while volume of feedstock is getting stranded at ports as disapproval from import authorities keeps disrupting supply chains in sectors, such as oleochemicals and petrochemicals industries.
Chemical manufacturers have promised support and adherence to governments & regional authorities that are committing towards green, sustainable initiatives. Development of bio-alternatives is gaining momentum. Research & academic institutes are teaming up with manufacturers to formulate sustainable substitutes for commonly-used chemical substrates. Many companies are keeping a close eye on advancements in “green chemistry.” Shift towards eco-friendly chemicals will gain momentum in the future on the back of government regulations and end-user preference. Rising costs of fossil fuels will also instrument the upsurge for sustainable chemicals manufacturing.
PMR utilizes robust methodology and approach to arrive at market size and related projections. The research methodology for this report is based on 3 dimensional model. We conduct about 45-60 min duration detailed interviews with product manufacturers; apart from this we also collect market feedback from industry experts. To validate this data, we interact with senior panel members having more than 10 years of experience in relevant field. The panel members help in validating the findings and fill the gaps if any. In addition, we leverage on our existing pool of information, paid database and other valid information sources available in public domain. Usually industry interactions extend to more than 50+ interviews from market participants across the value chain.
PMR collects data from secondary sources including company annual reports_bk_01_01_2020, association publications, industry presentations, white papers, and company press releases apart from these we leverage over paid database subscriptions and industry magazines to collect market information and developments in exhaustive manner. After being done with desk research, detailed questionnaire and discussion guide is formulated to initiate primary research with key industry personnel; the discussion aims at collecting key insights, growth perspectives, prevalent market trends and quantitative insights including market size and competition developments. Both of these research approaches help us in arriving at base year numbers and market hypothesis.
In this phase, PMR validates the data using macro and micro economic factors. For instance, growth in electricity consumption, industry value added, other industry factors, economic performance, growth of top players and sector performance is closely studied to arrive at precise estimates and refine anomalies if any.
Data analysis and projections were made based on proprietary research frameworks and statistical analysis, which was further validated from industry participants. These frameworks include Y-o-Y growth projections, macro-economic factor performance, market attractiveness analysis, key financial ratios, and others.
For public companies we capture the data from company website, annual reports_bk_01_01_2020, investor presentations, paid databases. While for privately held companies, we try to gather information from the paid databases (like Factiva) and based on the information we gather from databases we estimate revenue for the companies. In addition, the team tries to establish primary contact with the companies in order to validate the assumptions or to gather quality inputs.
The global azo pigments market has been segmented into: