Sequoia Capital partner Shaun Maguire reveals why this industry is one of the 'most underrated'

"Shaun Maguire, a partner at Sequoia Capital and early investor in several of Elon Musk's companies, says people aren't focusing on niche chemicals enough. On an episode of the "Relentless" podcast that aired on November 17, Maguire said that he might invest in the chemicals industry if he had $10 billion to start a business. "The chemicals industry is one of the most underrated industries in the world for many reasons," Maguire said. He added that most people don't think about the industry, which supports production for nearly all commercial and household goods, according to a 2022 report from the Cybersecurity and Infrastructure Security Agency."

""But a large fraction of the industry, I'd say at least 25%, is hardcore specialty chemicals that are actually very rare. A lot of times, there's only one company in the world that will make some specialty chemical," he said. (Specialty chemicals accounted for about 23% of the industry, according to CISA's report). Maguire said that those chemicals can be crucial for another company's production, as he said is true of one of Musk's businesses, and that losing access to a key chemical can severely delay or upend projects. Specialty chemicals include "adhesives, sealants, flavors and fragrances, food additives, and explosives," according to CISA."

The chemicals industry underpins production of nearly all commercial and household goods and contains a substantial specialty segment. Specialty chemicals comprise roughly 23–25% of the industry and are often rare, with some supplied by a single company worldwide. These chemicals include adhesives, sealants, flavors and fragrances, food additives, and explosives, and can be critical inputs that, if disrupted, can delay or upend manufacturing projects. The broader chemicals industry is in a downcycle with expected modest contraction in production volumes and persistent overcapacity in basic chemicals, while specialty chemicals may offer a brighter, more resilient opportunity.

Read at Business Insider