Specialty Chemicals Sector

After a decade of lost competitiveness, the American chemistry industry is reemerging as a growth industry. There are growing end-use markets, strengthening employment numbers, surging exports, and an influx of tremendous capital investment. The chemical industry is one of the United States’ largest manufacturing industries, serving both a sizable domestic market and an expanding global market. It is also one of the top exporting sectors of U.S. manufacturing.


The industry is cyclical by nature and heavily linked to the overall condition of the U.S. and world economy. The chemical industry has been consistently leading the U.S. economy’s business cycles due to its early position in the supply chain. It also touches 96% of manufactured goods, making the manufacturing industry the biggest consumer of chemical products.


The Specialty Chemicals sector is the most compatible with the economic development vision for Merced County. Specialty chemicals are used to create products that touch all aspects of our lives; products that enhance the performance of consumer and industrial goods from pharmaceuticals to paints and adhesives. There are thousands of different specialty chemicals produced and supplied to a wide range of industries.


Specialty chemical manufacturing is sometimes referred to as custom or fine chemical manufacturing. It is a unique market niche which is innovative, entrepreneurial and consumer-driven. Specialty chemicals go into many different sectors, including:


  • Adhesives and pressure-sensitive tapes
  • Automobiles
  • Clothing and textiles
  • Computers
  • Cosmetics, soaps, personal hygiene products
  • Crop protection
  • Detergents and cleaners
  • Electronics
  • Flavors and fragrances Food Products
  • Gasoline, tires and lubricants
  • Inks, dyes and pigments
  • Medicine
  • Paints, varnishes, sealers, and other coatings
  • Performance chemicals
  • Petrochemicals
  • Plastics


The growth prospects for several segments of this industry are favorable because the outlook for the end-use industries has improved as the economy has improved. Growing product groups are:


  • Specialty chemicals used in mining, the construction industry, electronics, and the automotive industry
  • Cosmetic chemicals, flavors and fragrances, and nutraceutical ingredients which are growing because of increasing incomes in the emerging countries and renewed consumer spending in North America, Western Europe and Japan
  • Numerous unique chemical applications to reduce pollutants and greenhouse gases


The U.S. specialty chemicals industry in the U.S. and California is thriving and growing and Merced County with its accessible location between Los Angeles and the Bay Area and its connectivity via rail and road to points north and south as well eastward into the U.S. market, position it well to serve its customer base.


  • A competitive cost environment: A lower cost of doing business as well as a lower cost of living compared to the coastal areas of California
  • A proximity to customers: Excellent connectivity to all points throughout California
  • Excellent manufacturing sites: Easy to develop/permit development sites located throughout the County