Changes are afoot in the U.S. chemical industry, with more manufacturers moving into specialty chemical production.

A new analysis by Frost & Sullivan reveals that U.S. chemical manufacturers are slowly moving away from bulk production of price-sensitive basic chemicals to production of low-volume, high-margin specialty chemicals.

The research firm said that the ability for manufacturers to diversify their product portfolios and target a wider range of end user applications makes specialty chemical production a more lucrative option.

Elsewhere in the report, “U.S. Specialty Chemicals: Roadmap to Win and Drive Customer Value,” the company says it expects the market to show modest growth of 1 to 3 percent between 2014 and 2016 due to the volatility of oil and gas prices.

The study also assesses automation opportunities in the U.S. specialty chemicals market by evaluating both greenfield and brownfield projects announced in the short term.

“Major specialty chemical projects in the U.S. that are scheduled to start between now and 2016 indicate a greater push toward brownfield capacity expansions,” said Rahul Vijayaraghavan, senior research analyst for Frost & Sullivan’s Industrial Automation & Process Control unit.

“With the average CAPEX spent on brownfield projects hovering between $80 and $100 million, automation vendors are looking to form strategic partnerships with key value chain participants, such as systems integrators, to leverage their application expertise and competitive pricing.”

According to Frost & Sullivan, suppliers will reap the benefits if they take a customer-centric approach because there is a high degree of innovation and customization associated with manufacturing operations.

“From an automation standpoint, as specialty chemicals utilize batch manufacturing principles in the facility, it is essential for vendors to innovate and evolve their current solution offering,” Vijayaraghavan added.

“Furthermore, as recipe management, production planning and scheduling account for nearly 60 percent of all automation applications in the batch-centric specialty chemicals market, strengthening these processes should be a focal point for automation vendors.”