care and household products. The active ingredients extend from high-price / low-volume fine chemicals, used for liquid crystal displays to large-volume / low-price amino acids used as feed additives. *fine chemicals merchant market size, growth potential Examples of applications in eight areas, ranging from adhesives to specialty polymers, are listed in Table 8. Overall, the attractiveness for the fine chemical industry is smaller than the life science industry. The total market, expressed in finished product sales, amounts to $150–200 billion, or about one fourth of the pharma market. The embedded fine chemicals account for an estimated $15 billion (see Table 5). Further disadvantages are the backward integration of the big players, e.g. Akzo-Nobel, Netherlands; Ajinomoto, Japan; Danone, France; Everlight Chemical Industrial Corp., Taiwan; Evonik-Degussa, Germany; Givaudan and Nestlé, Switzerland, Novozymes, Denmark, Procter & Gamble, and Unilever USA. Last but not least, innovation is rather based on new formulations of existing products, rather than the development of new fine chemicals. It is most likely to happen in application areas unrelated to human health (where NCEs are subject to very extensive testing). Target products and services Global sales of proprietary drugs are estimated $735 billion in 2010, or almost 90% of the total pharma market. Global sales of generics are about $100 billion, or just over 10% of the total pharma market. Due to the much lower unit price, their market share will be close to 30% on an API volume/volume basis. Custom manufacturing The products and services offered by the fine chemical industry fall into two broad categories: (1) "Exclusives", a.k.a. custom manufacturing (CM) and (2) "standard" or "catalogue" products. "Exclusives", provided mostly under contract research or custom manufacturing arrangements, prevail in business with life science companies; "standards" prevail in other target markets. Service-intense custom manufacturing (CM) constitutes the most prominent activity of the fine chemical industry. CM is the antonym of outsourcing. In custom manufacturing, a specialty-chemicals company outsources the process development, pilot plant, and, finally, industrial-scale production of an active ingredient, or a predecessor thereof, to one, or a few, fine chemical companies. The intellectual property of the product, and generally also the manufacturing process, stay with the customer. The customer-supplier relationship is governed by an exclusive supply agreement. At the beginning of cooperation, the customer provides a "tech package", which in its simplest version, includes a laboratory synthesis description and SHE recommendations. In this case, the whole scale