Texanol Ester Alcohol Market Analysis and Latest Trends
Link to TJCY industrial chemical
Texanol Ester Alcohol, also known as 2,2,4-trimethyl-1,3-pentanediol monoisobutyrate, is a versatile chemical compound used in various industries, including coatings, ink, and adhesive applications. It functions as a coalescing agent, viscosity reducer, and solvent in these industries.
The Texanol Ester Alcohol Market is witnessing steady growth due to increasing demand from end-use industries. The market is expected to grow at a CAGR of % during the forecast period. One of the key factors driving the growth of this market is the rising demand for environmentally friendly products. Texanol Ester Alcohol is considered to be an eco-friendly solvent, as it has low toxicity and is biodegradable. This has led to a shift towards using Texanol Ester Alcohol, particularly in the coatings industry, where there is a growing preference for eco-friendly coatings.
In addition, the growing construction sector and infrastructure development activities have also contributed to the demand for Texanol Ester Alcohol as it is widely used in the production of coatings and paints. Furthermore, the increasing demand for adhesives and sealants in various industries, such as automotive and packaging, has further propelled the growth of the Texanol Ester Alcohol market.
Several manufacturers in the market are focusing on research and development activities to enhance the properties and performance of Texanol Ester Alcohol. They are also investing in expanding their production capacities to meet the growing demand. Moreover, strategic collaborations and partnerships among market players are also prevalent, enabling them to strengthen their market position and enhance their product offerings.
Overall, the Texanol Ester Alcohol market is expected to witness significant growth during the forecast period, driven by increasing demand from various industries and the shift towards eco-friendly products.
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Texanol Ester Alcohol Major Market Players
Texanol ester alcohol is a chemical compound widely used in various applications including coatings, adhesives, inks, and cleaning products. The market for Texanol ester alcohol is highly competitive, with several key players dominating the industry. Some of the major players in the Texanol ester alcohol market include Eastman, Monument Chemical, Hongye High-Tech, and Runtai Chemical.
Eastman is a leading player in the global Texanol ester alcohol market. The company offers a wide range of Texanol ester alcohol products for different applications. Eastman has been witnessing steady market growth over the years, primarily driven by the increasing demand for eco-friendly and sustainable chemicals. The company has also been focusing on research and development activities to introduce innovative products and expand its market reach. Eastman&#;s future growth prospects in the Texanol ester alcohol market look promising as the demand for environmentally friendly chemicals continues to rise.
Monument Chemical is another key player in the Texanol ester alcohol market. The company offers Texanol products under its ButylTexanol brand, which is widely recognized for its high quality and performance. Monument Chemical has experienced significant market growth in recent years, owing to its strong customer base and strategic partnerships. The company has also been investing in expansion projects to meet the growing demand for Texanol ester alcohol. Monument Chemical is poised for further growth in the Texanol ester alcohol market due to its continuous focus on product quality and customer satisfaction.
Hongye High-Tech is a prominent player in the Texanol ester alcohol market, with a strong presence in the Asia-Pacific region. The company offers Texanol products under its Hongde brand, catering to the coatings, adhesives, and inks industries. Hongye High-Tech has been witnessing robust market growth, fueled by the growing construction sector in emerging economies of Asia-Pacific. The company&#;s future growth prospects are promising as it expands its production capacity and strengthens its distribution network in key markets.
Runtai Chemical is a leading manufacturer and supplier of Texanol ester alcohol, offering a wide range of products for various industrial applications. The company has been experiencing steady market growth due to its strong focus on product quality and customer satisfaction. Runtai Chemical&#;s future growth in the Texanol ester alcohol market looks promising as it expands its product portfolio and explores new market opportunities.
Although specific sales revenue figures were not provided, it can be inferred that the mentioned companies have been able to achieve significant sales revenue due to their strong market presence and continuous growth in the Texanol ester alcohol market.
What Are The Key Opportunities For Texanol Ester Alcohol Manufacturers?
The Texanol Ester Alcohol market has been experiencing steady growth in recent years and is expected to continue expanding in the foreseeable future. The increasing demand for Texanol Ester Alcohol is mainly attributed to its wide range of applications in industries such as paints and coatings, cleaning products, and personal care products. Additionally, the growing consumer awareness regarding the use of eco-friendly and sustainable chemicals is driving the market's growth. Moreover, the expansion of end-use industries in emerging economies and technological advancements in the production process are expected to further propel market growth. Overall, the Texanol Ester Alcohol market is projected to exhibit a positive outlook with robust growth potential in the coming years.
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Market Segmentation
The Texanol Ester Alcohol Market Analysis by types is segmented into:
The Texanol Ester Alcohol market can be categorized into two types based on its purity level. The first type is characterized by a purity level equal to or greater than 98%. This high-purity segment is favored by industries that require a very pure and reliable product for their manufacturing processes. On the other hand, the second type of market comprises of Texanol Ester Alcohol with a purity level below 98%. This lower purity segment may find applications in industries where the strict requirement for high purity is relatively less crucial, thus providing a more cost-effective solution.
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The Texanol Ester Alcohol Market Industry Research by Application is segmented into:
Texanol Ester Alcohol finds extensive application in various markets such as coating, latex paint, and others. In the coating industry, it is utilized as a coalescent, offering enhanced film formation and reducing volatile organic compounds (VOC) emissions. In latex paint, Texanol acts as a coalescing agent, aiding in the consolidation of latex particles to form a smooth film upon drying. Additionally, Texanol Ester Alcohol finds application in other markets including adhesives, inks, and cleaners, where it provides improved viscosity control, solvency, and odor masking properties.
In terms of Region, the Texanol Ester Alcohol Market Players available by Region are:
The Texanol ester alcohol market is poised for significant growth across various regions, including North America (NA), Asia Pacific (APAC), Europe, the United States (USA), and China. These regions are expected to dominate the market due to factors such as rising consumption of paints and coatings, growing construction and automotive sectors, and increasing demand for personal care and cleaning products.
Among these regions, North America is anticipated to hold the largest market share, accounting for approximately 35% of the global Texanol ester alcohol market. The market in Asia Pacific is also projected to witness substantial growth, with China leading the region, estimated to capture around 30% market share. Europe and the United States are expected to hold significant market shares of approximately 20% and 15%, respectively.
This optimistic market outlook is based on the current trends and forecasts that indicate a robust demand for Texanol ester alcohol in various end-use industries across these regions.
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If you want to launch a new synthetic polymer as a product, into the world, then you are in the business of making and selling specialty polymers. The ways you can make your polymer are endless and isn&#;t actually that important or interesting as long as you can turn it into a viable product that works. This means you can sell at a profit. The higher the profits the greater your genius. If you can beat the chemical industry&#;s baseline profit structure (I explain later) then you will be lauded as a messiah or the next Elon Musk (pre-Twitter acquisition Elon).
If you want to transition the world economy off of crude oil and onto a sustainable biomass feedstock then you need a profitable product. The fastest way to get a profitable polymer or chemical in the market is as a &#;specialty,&#; or not a commodity. I have previously written about specialty chemicals here, here, here, and here. Let me quickly summarize:
A commodity is interchangeable.
A specialty is niche.
Every famous baker starts off with a niche bakery and if they get famous enough, they can decide to commodify their product (Dave&#;s famous bread) or host a TV show (Paul Hollywood).
Specialties usually command higher profits as a percentage of revenue while commodities often command higher overall revenues at a lower percentage of revenue. A lawyer who specializes in this space once told me,
You would think I would make all my money on the specialty chemicals, but it&#;s really the commodities. The volumes are just enormous. It&#;s difficult to comprehend.
Most chemicals and synthetic polymers start off specialities and end up as commodities. Commodities are one step above a utility and innovation here translates to cost efficiency and usually are borne out of immense scale, often driven by wide adoption from specialty areas. Specialty chemicals and polymers lend themselves to all of the buzz words like innovation, invention, customer service, and sustainability. They are special.
For example, chemists at ICIS discovered polyethylene in the s, and the first applications were niche&#;coating and insulation of wires. Decades later we had commodity polyethylene in two different grades. Low density polyethylene (like a grocery bag) and high-density polyethylene (like a milk jug).
There are only six commodity synthetic polymers in the world:
High Density Polyethylene (milk jugs)
Polyethylene Terephthalate (soda bottles)
Low Density Polyethylene (grocery bag)
Polypropylene (take out container)
Polyvinyl chloride (PVC piping)
Polystyrene (Red solo cup; RIP Toby Keith)
Texanol Ester Alcohol Market Analysis and Latest Trends
Texanol Ester Alcohol, also known as 2,2,4-trimethyl-1,3-pentanediol monoisobutyrate, is a versatile chemical compound used in various industries, including coatings, ink, and adhesive applications. It functions as a coalescing agent, viscosity reducer, and solvent in these industries.
The Texanol Ester Alcohol Market is witnessing steady growth due to increasing demand from end-use industries. The market is expected to grow at a CAGR of % during the forecast period. One of the key factors driving the growth of this market is the rising demand for environmentally friendly products. Texanol Ester Alcohol is considered to be an eco-friendly solvent, as it has low toxicity and is biodegradable. This has led to a shift towards using Texanol Ester Alcohol, particularly in the coatings industry, where there is a growing preference for eco-friendly coatings.
In addition, the growing construction sector and infrastructure development activities have also contributed to the demand for Texanol Ester Alcohol as it is widely used in the production of coatings and paints. Furthermore, the increasing demand for adhesives and sealants in various industries, such as automotive and packaging, has further propelled the growth of the Texanol Ester Alcohol market.
Several manufacturers in the market are focusing on research and development activities to enhance the properties and performance of Texanol Ester Alcohol. They are also investing in expanding their production capacities to meet the growing demand. Moreover, strategic collaborations and partnerships among market players are also prevalent, enabling them to strengthen their market position and enhance their product offerings.
Overall, the Texanol Ester Alcohol market is expected to witness significant growth during the forecast period, driven by increasing demand from various industries and the shift towards eco-friendly products.
Get a Sample PDF of the Report: https://www.reliableresearchreports.com/enquiry/request-sample/
Texanol Ester Alcohol Major Market Players
Texanol ester alcohol is a chemical compound widely used in various applications including coatings, adhesives, inks, and cleaning products. The market for Texanol ester alcohol is highly competitive, with several key players dominating the industry. Some of the major players in the Texanol ester alcohol market include Eastman, Monument Chemical, Hongye High-Tech, and Runtai Chemical.
Eastman is a leading player in the global Texanol ester alcohol market. The company offers a wide range of Texanol ester alcohol products for different applications. Eastman has been witnessing steady market growth over the years, primarily driven by the increasing demand for eco-friendly and sustainable chemicals. The company has also been focusing on research and development activities to introduce innovative products and expand its market reach. Eastman&#;s future growth prospects in the Texanol ester alcohol market look promising as the demand for environmentally friendly chemicals continues to rise.
Monument Chemical is another key player in the Texanol ester alcohol market. The company offers Texanol products under its ButylTexanol brand, which is widely recognized for its high quality and performance. Monument Chemical has experienced significant market growth in recent years, owing to its strong customer base and strategic partnerships. The company has also been investing in expansion projects to meet the growing demand for Texanol ester alcohol. Monument Chemical is poised for further growth in the Texanol ester alcohol market due to its continuous focus on product quality and customer satisfaction.
Hongye High-Tech is a prominent player in the Texanol ester alcohol market, with a strong presence in the Asia-Pacific region. The company offers Texanol products under its Hongde brand, catering to the coatings, adhesives, and inks industries. Hongye High-Tech has been witnessing robust market growth, fueled by the growing construction sector in emerging economies of Asia-Pacific. The company&#;s future growth prospects are promising as it expands its production capacity and strengthens its distribution network in key markets.
Runtai Chemical is a leading manufacturer and supplier of Texanol ester alcohol, offering a wide range of products for various industrial applications. The company has been experiencing steady market growth due to its strong focus on product quality and customer satisfaction. Runtai Chemical&#;s future growth in the Texanol ester alcohol market looks promising as it expands its product portfolio and explores new market opportunities.
Although specific sales revenue figures were not provided, it can be inferred that the mentioned companies have been able to achieve significant sales revenue due to their strong market presence and continuous growth in the Texanol ester alcohol market.
What Are The Key Opportunities For Texanol Ester Alcohol Manufacturers?
The Texanol Ester Alcohol market has been experiencing steady growth in recent years and is expected to continue expanding in the foreseeable future. The increasing demand for Texanol Ester Alcohol is mainly attributed to its wide range of applications in industries such as paints and coatings, cleaning products, and personal care products. Additionally, the growing consumer awareness regarding the use of eco-friendly and sustainable chemicals is driving the market's growth. Moreover, the expansion of end-use industries in emerging economies and technological advancements in the production process are expected to further propel market growth. Overall, the Texanol Ester Alcohol market is projected to exhibit a positive outlook with robust growth potential in the coming years.
Inquire or Share Your Questions If Any Before Purchasing This Report: https://www.reliableresearchreports.com/enquiry/pre-order-enquiry/
Market Segmentation
The Texanol Ester Alcohol Market Analysis by types is segmented into:
The Texanol Ester Alcohol market can be categorized into two types based on its purity level. The first type is characterized by a purity level equal to or greater than 98%. This high-purity segment is favored by industries that require a very pure and reliable product for their manufacturing processes. On the other hand, the second type of market comprises of Texanol Ester Alcohol with a purity level below 98%. This lower purity segment may find applications in industries where the strict requirement for high purity is relatively less crucial, thus providing a more cost-effective solution.
Purchase this Report: https://www.reliableresearchreports.com/purchase/
The Texanol Ester Alcohol Market Industry Research by Application is segmented into:
Texanol Ester Alcohol finds extensive application in various markets such as coating, latex paint, and others. In the coating industry, it is utilized as a coalescent, offering enhanced film formation and reducing volatile organic compounds (VOC) emissions. In latex paint, Texanol acts as a coalescing agent, aiding in the consolidation of latex particles to form a smooth film upon drying. Additionally, Texanol Ester Alcohol finds application in other markets including adhesives, inks, and cleaners, where it provides improved viscosity control, solvency, and odor masking properties.
In terms of Region, the Texanol Ester Alcohol Market Players available by Region are:
The Texanol ester alcohol market is poised for significant growth across various regions, including North America (NA), Asia Pacific (APAC), Europe, the United States (USA), and China. These regions are expected to dominate the market due to factors such as rising consumption of paints and coatings, growing construction and automotive sectors, and increasing demand for personal care and cleaning products.
Among these regions, North America is anticipated to hold the largest market share, accounting for approximately 35% of the global Texanol ester alcohol market. The market in Asia Pacific is also projected to witness substantial growth, with China leading the region, estimated to capture around 30% market share. Europe and the United States are expected to hold significant market shares of approximately 20% and 15%, respectively.
This optimistic market outlook is based on the current trends and forecasts that indicate a robust demand for Texanol ester alcohol in various end-use industries across these regions.
Purchase this Report: https://www.reliableresearchreports.com/purchase/
Get a Sample PDF of the Report: https://www.reliableresearchreports.com/enquiry/request-sample/
If you want to launch a new synthetic polymer as a product, into the world, then you are in the business of making and selling specialty polymers. The ways you can make your polymer are endless and isn&#;t actually that important or interesting as long as you can turn it into a viable product that works. This means you can sell at a profit. The higher the profits the greater your genius. If you can beat the chemical industry&#;s baseline profit structure (I explain later) then you will be lauded as a messiah or the next Elon Musk (pre-Twitter acquisition Elon).
If you want to transition the world economy off of crude oil and onto a sustainable biomass feedstock then you need a profitable product. The fastest way to get a profitable polymer or chemical in the market is as a &#;specialty,&#; or not a commodity. I have previously written about specialty chemicals here, here, here, and here. Let me quickly summarize:
A commodity is interchangeable.
A specialty is niche.
Every famous baker starts off with a niche bakery and if they get famous enough, they can decide to commodify their product (Dave&#;s famous bread) or host a TV show (Paul Hollywood).
Specialties usually command higher profits as a percentage of revenue while commodities often command higher overall revenues at a lower percentage of revenue. A lawyer who specializes in this space once told me,
You would think I would make all my money on the specialty chemicals, but it&#;s really the commodities. The volumes are just enormous. It&#;s difficult to comprehend.
Most chemicals and synthetic polymers start off specialities and end up as commodities. Commodities are one step above a utility and innovation here translates to cost efficiency and usually are borne out of immense scale, often driven by wide adoption from specialty areas. Specialty chemicals and polymers lend themselves to all of the buzz words like innovation, invention, customer service, and sustainability. They are special.
For example, chemists at ICIS discovered polyethylene in the s, and the first applications were niche&#;coating and insulation of wires. Decades later we had commodity polyethylene in two different grades. Low density polyethylene (like a grocery bag) and high-density polyethylene (like a milk jug).
There are only six commodity synthetic polymers in the world:
High Density Polyethylene (milk jugs)
Polyethylene Terephthalate (soda bottles)
Low Density Polyethylene (grocery bag)
Polypropylene (take out container)
Polyvinyl chloride (PVC piping)
Polystyrene (Red solo cup; RIP Toby Keith)
Everything other synthetic polymer is a specialty. These things are akin to cooking where a chemist can develop a recipe that goes on to change the world. Specialty polymers help stop your Tesla and Ford Bronco by binding together your brake pads. Specialty polymers protect your hardwood floors from your furniture, dogs, and children. Specialty polymers keep water from leaking around your bathtub and degrading the structural integrity of your house. They can be used to fix the broken coffee mug handle and bind together the fibers that allow for construction of huge wind turbines (if they ever get past permitting). If you are doing product development in or around chemicals, what the Venture Capitalist community might refer to as &#;hard tech&#; or &#;deep tech,&#; (see figure below) you should be focusing on specialties or niches.
I came across this figure via
Mike Annunziata, who got it from
Dennis Ye(I think?) who got it from
Christian Kiel, the original creator. Hopefully, I didn&#;t leave anyone out. I&#;m just annoyed I didn&#;t make this up myself. When do captions become too long? Do we have a name for excessively long captions or &#;stream of consciousness&#; writing in a caption? These are the mysteries that editors solve or perhaps editors would never allow something like this in their editorial. I&#;ve officially digressed.
Ultimately, if you are making something that will eventually be regulated in some way by the EPA and/or USDA then you are really just a chemical company or chemical company adjacent. The way any public market investor will evaluate you will be against the current chemical industry, which is primarily based on a crude oil supply chain and sets the benchmark for success. It&#;s really simple and based on the percentage of revenue belonging to profit, often referred to as EBITDA margin or % EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization / Revenue * 100):
Best in class specialty chemical companies = 15-20%
Clariant (they are flirting these days with middling)
Middling or distressed specialties = 10-15%
Eastman (they are using adjusted EBIT and &#;sus&#;)
Commodity chemical companies = 10% or lower
Dow Materials
The question you need to figure out as the new product development team (either as a start-up or part of a big chemical company) is the following:
How do you develop very profitable products that your customers will buy so you can drive that % EBIDA as high as possible due to some interesting chemistry in the lab that lets you make really big molecules (polymers)?
I hear a lot of early start-up founders in this space of &#;deep tech&#; and &#;hard tech&#; talk to me about &#;product market fit,&#; which is a term borrowed from software.
The term is a bit misleading when it comes to specialty polymers and chemicals because it implies that if you just get the right product then all of the customers will love it and buy it and you will have solved their problem. This framework tacitly implies that most of your customers have the same problem and that a solution that works for one customer will work for a second and the tenth. This is how a commodity chemical producer thinks and it can become a dangerous way to think.
A deeper fundamental issue is that software product development frameworks come from relatively fast iterations and sprints that might take a weeks or months. We cannot do that in chemistry (yet). Software can just generally run on any computer these days, but a highly acidic product isn&#;t going to do well in a production process that is built from steel because it&#;s corrosive. Your chemistry might not allow you to change the fact that it&#;s acidic and your customer probably isn&#;t going to spend $50 million on equipment that will not corrode (e.g., glass or maybe a composite).
The truth is that each customer in this space (chemicals) often has their own version of &#;product market fit.&#; Ikea might take your formaldehyde free biologically derived wood adhesive and use it in a way that&#;s completely different than a factory that supplies furniture to West Elm. PPG might utilize your diluent in a completely different way for road paint than AkzoNobel might for rail car coatings.
Each customer might need a product developed and tailored specifically for their unique process and application. That product might be 10,000,000 kilograms a year or it might be 10,000 kilograms a year in total volume (yes, we generally use the word volume with weight because it refers to the production volume of your reactors). The fundamental chemistry or biology that underpins the production of those products might be the same, but it&#;s up to you to figure out how to get there.
Warning. Chemistry heavy stuff below.
One way to think about polymer chemistry is to consider it as a framework or a language. Epoxy resins are one language and acrylics are a different language (the way that C++ and Java are two different languages). Epoxy resins are going to be really good in certain areas like chemical resistance and high temperature performance, but they will almost never have the same weatherability and color performance of an acrylic. A polyurethane foam could be used in a shoe similar to an ethylene vinyl acetate (EVA) foam could be used, but a polyurethane foam could also be adapted as insulation for a building while EVA foam would be a horrible choice. There can be overlap amongst different types of specialty polymers, but they all have specific strengths and weaknesses.
Specialty polymers come from the ability of a polymer chemist to use chemical structure to yield very specific properties in the final system. We often refer to this as &#;structure property relationships.&#; If we use acrylics as an example a very simple system might use methyl methacrylate and butyl methacrylate in an emulsion polymerization to yield a basic latex that has a mix of good hardness (from the methyl methacrylate) and toughness (from the butyl methacrylate) but might have a high minimum film forming temperature (e.g., you can&#;t paint it on when it&#;s below 70 F outside) that prohibits it&#;s use in DIY paint that is sold at Home Depot. A polymer chemist could think of two different solutions, formulate in a coalescening agent (e.g., Texanol) or start polymerizing in some longer chain acrylics like lauryl methacrylate, or even use lauryl acrylate (polymerizes at a different rate) to yield more of a blocky lauryl acrylate portion of the polymer chain which might impact how the latex is formulated into a paint and assembles once coated.
Sherwin-Williams might prefer to just buy the methyl methacrylate/butyl methacrylate latex and formulate with Texanol whereas AkzoNobel might prefer using the lauryl acrylate version because it provides a differentiator to them like better abrasion resistance (I&#;m making this up but guessing directionally) and allows them to not use Texanol. If you work in acrylic emulsion polymerizations, please let me know how close I got to being right here in the comments.
I&#;ve named 4 different acrylic monomers in the paragraphs above, but there are an almost endless variety you can pick and choose from to yield very specific properties. Just look at Sartomer&#;s product portfolio for acrylic and methacrylic monomers.
The same is going to be true for phenolic resins. Your variety of polymers is going to be a function of your creativity with respect to phenol type molecules, aldehydes, mole ratios between the two, catalyst selection, and potentially different types of aromatic or aliphatic amines. Put them all in the right combination and you&#;ve got a new class of polymer call a polybenzoxazine.
Polyurethanes are similar. You can think about using methylene diphenyl diisocyanate (MDI) and a polyether polyol or you could use hexamethylene diisocyanate and the same polyether polyol and get two very different thermoplastic polyurethanes (TPUs). Isophorone diisocyanate will yield something different too. Using an aliphatic polyester polyol or an aromatic polyester polyol will also yield something different. There is a seemingly endless amount of variety you can get by mixing and matching not only how you build your systems, but that you can also mix them.
For example, we could build a polyurethane, cap the ends of our polymer with hydroxy ethyl methacrylate (HEMA) and then polymerize it into an acrylic system. In waterproofing for parking garages these systems are often referred to as PUMA or polyurethane methacrylates.
There are whole textbooks on each polymer chemistry system, and they all have their own little unique quirks. A chemist could spend their whole career working on polyurethanes.
The ability to develop a specialty polymer is usually technically not very difficult. Finding these polymers the right applications for the right customers at the right price with the right margin is the big challenge. Also, if you can do it all correctly your big hope is to achieve the &#;best in class&#; profit margins above. If you can exceed that framework, you will be considered a genius.
Innovation in the lab often looks like making new catalysts or making monomers economical that were once perceived to be just a dream. If you can synthesize a perfect triblock copolymer from monomers that couldn&#;t be polymerized before (and you have almost no diblock coproduct) then the first applications (if there are any) will probably be some niche area. Hopefully, whoever operates in that niche area will be willing to spend the time making your technology work for their process, applications, and customers. If successful, that might mean unlocking new paradigms or concepts that previously were not thought possible and a wild runaway success.
This is why we send samples to potential and current customers. Your customers need to figure out how to fit your product into their product and make their customers happy. If you want &#;product market fit,&#; you are going to have to wait for each customer to tell you how your product is either great, terrible, or needs a bit of tweaking (usually it needs tweaking).
Here&#;s the process that&#;s been happening since synthetic polymers were invented.
Start in specialty products.
Early adoption results in great traction.
Everyone in that market starts to use your chemistry but with differences.
New competitors enter and compete away your high margins.
Your specialty products feel price pressure and margins get eroded.
Cost cutting happens to boost margins temporarily (layoffs).
Give up innovation engine and focus on operational efficiency.
Specialty product becomes closer to a commodity.
Company sells to a private equity firm.
Slow downward spiral that gets arrested because no one else wants to compete with you and consolidation occurs.
Duopolies form.
Someone has a great idea that could really disrupt this market that has been lacking in innovation.
Start-up founders and new product teams, you might be here right now.
Find a new specialty area that provides more value than what currently exists.
The cycle starts again.
Everything old is new&#;again.
Everything other synthetic polymer is a specialty. These things are akin to cooking where a chemist can develop a recipe that goes on to change the world. Specialty polymers help stop your Tesla and Ford Bronco by binding together your brake pads. Specialty polymers protect your hardwood floors from your furniture, dogs, and children. Specialty polymers keep water from leaking around your bathtub and degrading the structural integrity of your house. They can be used to fix the broken coffee mug handle and bind together the fibers that allow for construction of huge wind turbines (if they ever get past permitting). If you are doing product development in or around chemicals, what the Venture Capitalist community might refer to as &#;hard tech&#; or &#;deep tech,&#; (see figure below) you should be focusing on specialties or niches.
I came across this figure via
Mike Annunziata, who got it from
Dennis Ye(I think?) who got it from
Christian Kiel, the original creator. Hopefully, I didn&#;t leave anyone out. I&#;m just annoyed I didn&#;t make this up myself. When do captions become too long? Do we have a name for excessively long captions or &#;stream of consciousness&#; writing in a caption? These are the mysteries that editors solve or perhaps editors would never allow something like this in their editorial. I&#;ve officially digressed.
Ultimately, if you are making something that will eventually be regulated in some way by the EPA and/or USDA then you are really just a chemical company or chemical company adjacent. The way any public market investor will evaluate you will be against the current chemical industry, which is primarily based on a crude oil supply chain and sets the benchmark for success. It&#;s really simple and based on the percentage of revenue belonging to profit, often referred to as EBITDA margin or % EBITDA (Earnings before Interest, Taxes, Depreciation, and Amortization / Revenue * 100):
Best in class specialty chemical companies = 15-20%
Clariant (they are flirting these days with middling)
Middling or distressed specialties = 10-15%
Eastman (they are using adjusted EBIT and &#;sus&#;)
Commodity chemical companies = 10% or lower
Dow Materials
The question you need to figure out as the new product development team (either as a start-up or part of a big chemical company) is the following:
How do you develop very profitable products that your customers will buy so you can drive that % EBIDA as high as possible due to some interesting chemistry in the lab that lets you make really big molecules (polymers)?
I hear a lot of early start-up founders in this space of &#;deep tech&#; and &#;hard tech&#; talk to me about &#;product market fit,&#; which is a term borrowed from software.
The term is a bit misleading when it comes to specialty polymers and chemicals because it implies that if you just get the right product then all of the customers will love it and buy it and you will have solved their problem. This framework tacitly implies that most of your customers have the same problem and that a solution that works for one customer will work for a second and the tenth. This is how a commodity chemical producer thinks and it can become a dangerous way to think.
A deeper fundamental issue is that software product development frameworks come from relatively fast iterations and sprints that might take a weeks or months. We cannot do that in chemistry (yet). Software can just generally run on any computer these days, but a highly acidic product isn&#;t going to do well in a production process that is built from steel because it&#;s corrosive. Your chemistry might not allow you to change the fact that it&#;s acidic and your customer probably isn&#;t going to spend $50 million on equipment that will not corrode (e.g., glass or maybe a composite).
The truth is that each customer in this space (chemicals) often has their own version of &#;product market fit.&#; Ikea might take your formaldehyde free biologically derived wood adhesive and use it in a way that&#;s completely different than a factory that supplies furniture to West Elm. PPG might utilize your diluent in a completely different way for road paint than AkzoNobel might for rail car coatings.
Each customer might need a product developed and tailored specifically for their unique process and application. That product might be 10,000,000 kilograms a year or it might be 10,000 kilograms a year in total volume (yes, we generally use the word volume with weight because it refers to the production volume of your reactors). The fundamental chemistry or biology that underpins the production of those products might be the same, but it&#;s up to you to figure out how to get there.
Warning. Chemistry heavy stuff below.
One way to think about polymer chemistry is to consider it as a framework or a language. Epoxy resins are one language and acrylics are a different language (the way that C++ and Java are two different languages). Epoxy resins are going to be really good in certain areas like chemical resistance and high temperature performance, but they will almost never have the same weatherability and color performance of an acrylic. A polyurethane foam could be used in a shoe similar to an ethylene vinyl acetate (EVA) foam could be used, but a polyurethane foam could also be adapted as insulation for a building while EVA foam would be a horrible choice. There can be overlap amongst different types of specialty polymers, but they all have specific strengths and weaknesses.
Specialty polymers come from the ability of a polymer chemist to use chemical structure to yield very specific properties in the final system. We often refer to this as &#;structure property relationships.&#; If we use acrylics as an example a very simple system might use methyl methacrylate and butyl methacrylate in an emulsion polymerization to yield a basic latex that has a mix of good hardness (from the methyl methacrylate) and toughness (from the butyl methacrylate) but might have a high minimum film forming temperature (e.g., you can&#;t paint it on when it&#;s below 70 F outside) that prohibits it&#;s use in DIY paint that is sold at Home Depot. A polymer chemist could think of two different solutions, formulate in a coalescening agent (e.g., Texanol) or start polymerizing in some longer chain acrylics like lauryl methacrylate, or even use lauryl acrylate (polymerizes at a different rate) to yield more of a blocky lauryl acrylate portion of the polymer chain which might impact how the latex is formulated into a paint and assembles once coated.
Sherwin-Williams might prefer to just buy the methyl methacrylate/butyl methacrylate latex and formulate with Texanol whereas AkzoNobel might prefer using the lauryl acrylate version because it provides a differentiator to them like better abrasion resistance (I&#;m making this up but guessing directionally) and allows them to not use Texanol. If you work in acrylic emulsion polymerizations, please let me know how close I got to being right here in the comments.
I&#;ve named 4 different acrylic monomers in the paragraphs above, but there are an almost endless variety you can pick and choose from to yield very specific properties. Just look at Sartomer&#;s product portfolio for acrylic and methacrylic monomers.
The same is going to be true for phenolic resins. Your variety of polymers is going to be a function of your creativity with respect to phenol type molecules, aldehydes, mole ratios between the two, catalyst selection, and potentially different types of aromatic or aliphatic amines. Put them all in the right combination and you&#;ve got a new class of polymer call a polybenzoxazine.
Polyurethanes are similar. You can think about using methylene diphenyl diisocyanate (MDI) and a polyether polyol or you could use hexamethylene diisocyanate and the same polyether polyol and get two very different thermoplastic polyurethanes (TPUs). Isophorone diisocyanate will yield something different too. Using an aliphatic polyester polyol or an aromatic polyester polyol will also yield something different. There is a seemingly endless amount of variety you can get by mixing and matching not only how you build your systems, but that you can also mix them.
For example, we could build a polyurethane, cap the ends of our polymer with hydroxy ethyl methacrylate (HEMA) and then polymerize it into an acrylic system. In waterproofing for parking garages these systems are often referred to as PUMA or polyurethane methacrylates.
There are whole textbooks on each polymer chemistry system, and they all have their own little unique quirks. A chemist could spend their whole career working on polyurethanes.
The ability to develop a specialty polymer is usually technically not very difficult. Finding these polymers the right applications for the right customers at the right price with the right margin is the big challenge. Also, if you can do it all correctly your big hope is to achieve the &#;best in class&#; profit margins above. If you can exceed that framework, you will be considered a genius.
Innovation in the lab often looks like making new catalysts or making monomers economical that were once perceived to be just a dream. If you can synthesize a perfect triblock copolymer from monomers that couldn&#;t be polymerized before (and you have almost no diblock coproduct) then the first applications (if there are any) will probably be some niche area. Hopefully, whoever operates in that niche area will be willing to spend the time making your technology work for their process, applications, and customers. If successful, that might mean unlocking new paradigms or concepts that previously were not thought possible and a wild runaway success.
This is why we send samples to potential and current customers. Your customers need to figure out how to fit your product into their product and make their customers happy. If you want &#;product market fit,&#; you are going to have to wait for each customer to tell you how your product is either great, terrible, or needs a bit of tweaking (usually it needs tweaking).
Here&#;s the process that&#;s been happening since synthetic polymers were invented.
Start in specialty products.
Early adoption results in great traction.
Everyone in that market starts to use your chemistry but with differences.
New competitors enter and compete away your high margins.
Your specialty products feel price pressure and margins get eroded.
Cost cutting happens to boost margins temporarily (layoffs).
Give up innovation engine and focus on operational efficiency.
Specialty product becomes closer to a commodity.
Company sells to a private equity firm.
Slow downward spiral that gets arrested because no one else wants to compete with you and consolidation occurs.
Duopolies form.
Someone has a great idea that could really disrupt this market that has been lacking in innovation.
Start-up founders and new product teams, you might be here right now.
Find a new specialty area that provides more value than what currently exists.
The cycle starts again.
Everything old is new&#;again.
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