I will use two terms to indicate the types of pigment producers. Traditional Suppliers (TS) and Non-Traditional Suppliers (NTS). By “traditional suppliers” I mean those international chemical companies which have been producing organic pigments for many years. From the beginning, the locations of HPP production plants have always been located in the country of these companies’ headquarters. For HPPs, Germany, Switzerland, USA and Japan have been and still are by far the most important production countries.
I estimate that today’s traditional suppliers produce approximately 75% of the total organic pigment demand. For HPPs they have an even larger share. CIBA and Clariant are the leading suppliers, followed by BASF, DIC/SUN and BAYER. These five “majors” produce together approximately 90% of the HPP volume! Although these figures appear to show an oligopolistic supply side, in reality this is absolutely not the case. In recent years, prices for HPP have been under constant pressure due to increased production capacities and the fact that some other manufacturers have started to produce certain types of HPPs.
Nevertheless, the question remains as to why so few producers dominate this market. I see mainly two reasons:
• confidential production know-how
• heavy investment requirements
This will be discussed below.