Page 102 - Tata_Chemicals_yearly-reports-2021-22

Integrated Annual Report 2021-22

2. Chemical Industry b. Key Global Trends
a. Global Chemical Industry Sustainability has increasingly become a focus for the
The global chemical industry outlook in 2022 is expected chemical industry and many companies are responding
to be cautiously optimistic. The industry grew ~6% in with shift to green chemistry and commitments to
FY 2021-22 driven by strong demand recovery post decarbonisation, recycling and resource recovery. Large
pandemic and gradual easing of supply chains towards the companies are leading the way to net-zero greenhouse gas
end of the year. In 2022, the industry faces pressure from emission commitments. Initiatives such as European plastic
rising inflation (increase in energy and raw material costs), tax and green hydrogen stimulus packages in the US, Canada
supply chain disruptions, ongoing geopolitical tensions and and Europe are accelerating the adoption of sustainable
conflict in Europe. practices and goals.
While risks to the global economy remain, the global Industry players are showing heightened focus on new
chemical industry is expected to grow in 2022 mainly led and innovative technologies such as Carbon Capture
by Asia and America. Brazil, China, India and South-East and Utilisation (CCU). In addition, companies continue to
Asian countries (‘SEA’) will emerge as the fastest-growing advance work on chemical recycling, green hydrogen, etc.
markets due to the rise in pent-up demand. The US Chemical These will boost usage of renewables, improve energy
Industry will continue to recover following the pandemic efficiency, reduce emissions and create new market for
recovery and supply chain recovery. The European Chemical
Council estimates that the output will slow down due to carbon and other by-products as part of an increasingly
sharp rise in energy prices and continued supply chain circular economy.
disruptions caused by sanctions. The Association of the Digital technologies will support the global chemical
German Chemical Industry (VCI) forecasts that in 2022 industry transformation. Chemical companies are exploring
production of chemicals (excluding pharmaceuticals) in the potential of advanced data analytics, automation,
Germany will increase by 1.5%. connectivity and digital technologies to become more agile,
The output growth of Chemical Industry is mainly supported innovative, responsive and efficient. Advances in sensors,
by the continued recovery of the global economy and rising cognitive computing and analytics present economically
demand in downstream sectors. Most forecasts note that viable solutions for extracting more efficiencies and
the expected recovery in the automotive industry, along preventing production failures.
with growth in the agriculture, construction, consumables,
consumer durables and health and nutrition sectors, should The changing composition and expectations of hyper-
underpin global chemical demand. A key feature of the global connected consumers and Government policies will
chemicals market is the shifting nature of its value streams, trigger structural industry and consumption shifts towards
driven by demand for new products in a range of industries investment in clean technology. There’s a clear upward trend
i.e. materials for microelectronics, advanced materials for driven by public policies promoting environment friendly
construction applications, recycling technologies, Electric technologies. The transition towards EV will spur more
Vehicles (EV) and solar applications and new solvent cleaning investment. Large number of start-ups were launched with
technologies. investments in hydrogen as a viable fuel for the industries
Most of the sub sectors are expected to grow in 2022 and processes that need fuel other than electricity.
with Agrochemicals at ~2.3%, Consumer Chemicals ~3%, Chemical companies are likely to focus on repositioning their
Inorganic Chemicals ~3.9%, Bulk Petrochemicals and Organic asset portfolios and balancing trade-offs between different
Chemicals ~3.8% and Specialty Chemicals at ~4%. strategic options with critical considerations such as scale,
Source: American Chemical Council, European Chemical Industry Council, the scope of products and growth opportunities. To deliver
Association of German Chemical Industry, Various Industry Reports strong growth and improve financial performance, firms may

Sustainability has increasingly become a focus for the chemical industry and many
companies are responding with shift to green chemistry and commitments to
decarbonisation, recycling and resource recovery

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