The global custom synthesis and manufacturing market was valued at US$271.33 billion in 2022. The market value is expected to reach US$474.94 billion by 2028. Custom synthesis manufacturing (CSM) refers to the process of manufacturing a specific chemical compound, material, or product according to the specific requirements and specifications of a customer. This process involves the synthesis of a desired compound or material that is not readily available in the market or cannot be obtained through standard manufacturing processes.

The contract synthesis and manufacturing (CSM) provides several benefits, including cost-effectiveness, specialization, flexibility, regulatory compliance, and speed to market. Custom Synthesis and Manufacturing (CSM) is on the rise across the world, driven by strong growth in end-use demand, innovators shifting focus to core competencies and outsourcing of production to low manufacturing cost destinations. The CSM market is expected to continue to grow due to the increasing demand for pharmaceuticals, growing complexity of drugs, advancements in technology, increasing patent expiry, and growing trend of green manufacturing. The market is expected to grow at a CAGR of approx. 10% during the forecasted period of 2023-2028.

Market Segmentation Analysis:

By Application: The report provides the custom synthesis and manufacturing market analysis based on applications: Pharmaceutical, Agrochemical, and Others. The pharmaceutical segment held the highest share in the market and is also expected to be the fastest-growing segment in the forecasted period. The pharmaceutical industry requires a wide range of specialty chemicals, intermediates, and APIs (active pharmaceutical ingredients) to develop and manufacture drugs. Many pharmaceutical companies outsource these activities to third-party CROs (contract research organizations) and CMOs (contract manufacturing organizations) to reduce costs and increase efficiency. Thus, the increasing trend of outsourcing is driving market growth.

By Region: The report provides insight into the custom synthesis and manufacturing market based on the regions namely, North America, Asia Pacific, Europe, and the Rest of the World. North America held the highest share of the market The pharmaceutical industry is growing at a consistent pace in North America, with a large number of biotech and pharma companies operating in the region. Morever the US has a large pool of population suffering from health diseases. For instance, according to the article US Health Care from a Global Perspective, 2022, the US has the highest rate of people with multiple chronic conditions and an obesity rate nearly twice the OECD average. Therefore, owing to the high rate of people suffering from chronic diseases along with the increasing health spending contributes to the growth of the pharmaceutical industry. These factors are driving the demand for CSM services.

Asia Pacific is expected to be the fastest-growing region in the forthcoming years. Within Asia Pacific, India provides lucrative opportunities to the overall CSM industry. The main drivers of the Indian CSM market include the rising trend of contract manufacturing of fine chemicals along with niche specialty chemicals in India. Many global companies are preferring investment in contract manufacturing in India. Moreover, market growth is driven by research & development of new molecules/chemistries developed followed by willingness for reduced capital investments in the overall fine chemicals segment.

Market Dynamics:

Growth Drivers: The global custom synthesis and manufacturing market growth is predicted to be supported by numerous growth drivers such as the growing pharmaceutical industry, rising agrochemical industry growth, surging cases of cancer, escalating pharma research and development spending, increasing demand for specialty chemicals, increasing regulatory compliance requirement, increasing outsourcing trend, and many other factors. There are several regulatory compliance requirements that chemical and drug manufacturers must follow to ensure the safety and efficacy of their products. For instance, Good Manufacturing Practice ensures that drugs and APIs are consistently produced and controlled according to quality standards. Regulatory compliance requirements for the manufacturing of chemicals and drugs are becoming increasingly stringent, particularly in developed countries. As a result, many companies are turning to custom synthesis and manufacturing services to ensure compliance with regulations and reduce the risk of non-compliance.

Challenges: However, the market growth would be negatively impacted by various challenges such as cost pressure, talent shortage, etc.

Trends: The market is projected to grow at a fast pace during the forecast period, due to various latest trends such as integration of AI/MI, increasing patent expiry, technological advancement, green manufacturing, increasing role of automation and robotics, etc. When a drug or chemical’s patent expires, it opens up opportunities for generic drug manufacturers and other companies to produce and sell the same drug or chemical. This often leads to increased competition, which in turn drives down the price of the drug or chemical. As a result, many pharmaceutical and chemical companies are increasingly turning to custom synthesis and manufacturing services to reduce costs and increase efficiency.

Impact Analysis of COVID-19 and Way Forward:

The COVID-19 pandemic had a mixed impact on the custom synthesis and manufacturing (CSM) market in 2020. On one hand, there was an increased demand for certain pharmaceutical products and ingredients, as well as for diagnostic and testing reagents, which drove growth in the CSM market. On the other hand, disruptions in global supply chains, production shutdowns, and reduced demand for non-essential products due to lockdowns and restrictions imposed by governments worldwide had negatively impacted the market. One of the major impacts of the pandemic on the CSM market has been an increased focus on digitization and automation. Overall, while the pandemic has caused significant disruption in the CSM market, it has also presented opportunities for innovation and growth in the long term.

Competitive Landscape:

The global custom synthesis and manufacturing market is fragmented. The key players in the global custom synthesis and manufacturing market are:

  • Thermo Fisher Scientific Inc. (Alfa Aesar)
  • PI Industries Ltd.
  • Aragen Life Sciences Private Ltd.
  • Seikagaku Corporation (Dalton Pharma Services)
  • Navin Fluorine International Ltd. (Manchester Organics Ltd.)
  • Anupam Rasayan India Ltd.
  • Divi’s Laboratories Ltd.
  • Taros Chemicals GmbH & Co. KG
  • Solvias AG
  • Matrix Fine Chemicals GmbH
  • Cambrex
  • Tokyo Chemical Industry Co., Ltd.


Some of the strategies among key players in the market are opening new facilities, mergers, acquisitions, and collaborations. Aragen operationalize cutting-edge formulation manufacturing facility in Hyderabad. The 12,000 square feet new facility would strengthen the company’s ability to deliver clinical supplies to customers through the company’s integrated drug substance and drug product development and manufacturing. On the other hand, in 2023, Taros Chemicals announced a strategic partnership to provide clients with integrated drug discovery and development services spanning from hit generation to pre-clinical development. Through this unique partnership, global pharmaceutical and biotech companies would now take advantage of a one-stop-shop access to Taros’ synthetic and medicinal chemistry expertise covering hit identification, hit to lead and lead optimization as well as drug design and molecular modelling services.