Specialty Chemicals end-user segment outlook

Specialty Chemicals serves all four of our end-user segments, with the products we supply being used in millions of everyday products. Growth is moderate in many parts of these end-user segments and there is uncertainty about the outlook for the oil price.


Accounting for nearly 60 percent of Specialty Chemicals revenues, the Industrial end-user segment is by far the largest for the Business Area. It is served by all five of our chemical platforms. In the Natural resource and energy industries sub-segment, we derive significant revenue from the sale of surfactants and ethylene-derived products into the oil and gas, metals and mining, and agricultural industries. In the Process industries sub-segment, we derive significant revenue from the sale of bleaching chemicals into the pulp industry, in addition to sales of salt, chlor-alkali products, organic peroxides, metal alkyls and ethylene-based products into the plastics (polymer) industry, as well as other chemical industries.

The growth outlook for both end-user sub-segments is varied. It is roughly equivalent to GDP growth in most markets and geographies.

  • Growth in Asia is expected to be more moderate going forward than it has been
  • Growth in North America is still expected to be above GDP growth in chemicals and other industries affected by by growth in shale gas
  • In South America, growth is particularly high in chemically bleached pulp

From an industry perspective, unlike most recent years, the outlook for oil and gas is uncertain. Most analysts predict an oil price rebound, although it is unclear whether and when this will occur. If the oil price remains low, there is also uncertainty about what the impact will be on key industries for AkzoNobel. Within metals and mining, the overall view currently appears to be one of apprehension, with improvement anticipated within five years. In agriculture, demand for agricultural products is expected to remain firm, although expanding at slower rates compared with the past decade.

Buildings and Infrastructure

Our main involvement in the Buildings and Infrastructure end-user segment is through the salt-chlorine and polymer chemistry platforms. We produce salt, chlor-alkali products, organic peroxides, metal alkyls and various other products that are used in the manufacture of plastics that are, in turn, used to make doors, windows and other construction components. We also make products that are used more directly in the Buildings and Infrastructure industry, such as cellulosic products used in paints and redispersible polymer powders used in concrete admixtures. In addition, we are a leading supplier of high purity metal organic (HPMO) precursors – an essential ingredient for light-emitting diode (LED) chips used for smart and efficient lighting, as described later in this section. Products such as these that have sustainability benefits are expected to grow disproportionately.

Growth has been limited in Europe since the recession. Analysts are forecasting a strong recovery over the next few years. If this recovery occurs, it will clearly be important for our business given the percentage of our revenue that comes from Europe. However, we have seen limited evidence of a significant increase in demand and, therefore, our internal growth forecasts are more conservative. The other platforms are driven by the global outlook for more moderate growth than we have seen in the recent past, particularly in China.

Consumer Goods

We sell a wide variety of surfactants and ethylene-based products into the Consumer packaged goods sub-segment, for applications such as cleaning, cleansing, conditioning and dishwashing. The expected growth in demand continues to be at or slightly above GDP growth levels in mature geographies. The personal care market outlook is also reasonable, driven by global increased demand and penetration in high growth countries.

We also sell consumer/domestic salt into the Consumer packaged goods sub-segment. For salt products, these sales are in Europe, where demand growth is low and healthy eating emphasis is high. The outlook for this part of the market is less positive, although reduced sodium intake does offer growth opportunities for our low sodium salt products.


Transportation is the smallest end-user segment for Specialty Chemicals. We sell a wide variety of products that are generally used in the manufacture of automotive plastics (polymers), mostly via our salt-chlorine and polymer chemistry platforms.

Over the last few years, these businesses have already benefited from market recovery after the recession and are now growing fairly steadily at roughly GDP growth rates. The trend towards lighter weight and less expensive cars disproportionately benefits our business, as this supports the use of automotive plastics.

The market

The global chemicals industry is very large (more than €2.5 trillion globally) and diverse. China has become the global leader in terms of chemical production. Market development is also disproportionately strong in the Middle East (due to access to low cost raw materials) and in the US (due to shale gas). Europe continues to post record trade surpluses in chemicals in all major regions and we expect this to continue, particularly in the chemical sectors relevant to AkzoNobel. Growth rates in Europe are expected to be substantially lower than in other regions, though, due to a combination of limited local demand growth (as described in the end-user segment analysis above) and a higher local raw material and energy cost base.