U.S. Specialty Chemicals: East Coast in Specialty Chemicals Magazine
November 1, 2012 - Philadelphia, PA
The competitive edge
The US chemicals industry invests $56 billion/year in R&D and 20% of all US patents are chemistry related. The US has long been a clear market leader when it comes to innovation and, with a strong emphasis on new products going forward, that is not likely to change.
“There are predictions every year that the rate of innovation in the US will start to decline. Although China now holds more patents than we do, US innovation has not declined. This is because we are good at it. The US has an inventive and entrepreneurial spirit,” says Thomas Tritton, president of the Chemical Heritage Foundation, a Philadelphia-based library, museum and research organisation that promotes chemistry’s impact on society.
Newark, New Jersey–based formulator of adhesives and coatings Innovative Resin Systems attributes its achievements to a strong focus on innovation. “Currently, our 2012 sales are showing an increase of 33% year-on-year on our 2011 record year,” says company president Pina Patel. “The key to the driver of this increased business is our R&D; in 2011 we invested $250,000 alone on new manufacturing equipment.”
Faced with the inevitable commoditisation of their products and flatter US and European markets, many speciality companies are placing increased focus on bringing cutting-edge products to market. Yet R&D funds are drying up and companies are finding they need to be as lean and efficient as possible to maximise their innovation budgets.
The need for fuller pipelines at lower costs has created a significant appetite for partnerships. “So much of what happens in new development today does involve partnerships. Nobody has all the pieces of the puzzle by themselves and we can do it a lot faster and more cost-efficiently by forming alliances,” says Gaither of Reichhold.
In a 2012 survey of chemicals industry executives conducted by KPMG, the number of US companies expecting to invest over 5% of their revenue in R&D dropped from 23% to 17%. While this remaining percentage is by no means negligible, it is nonetheless reflective of companies looking to right-size their programmes.
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