Analytical Overview of the Global Oleochemical Market
Published On : Jul 28, 2014
Oleochemicals refer to chemicals derived from animal and plant fats after various enzymatic and chemical reactions have occurred. In terms of products, the main types of oleochemicals are fatty acids, fatty alcohols and glycerin.
The most traditional uses of oleochemicals include those in home and personal care, soaps, detergents, surfactants and food additives. However, there have been various new emerging applications in the market.
Petroleum-based lubricants have led the market for a very long time now. But being non-biodegradable, they are extremely hazardous to the environment. Their disposal is a challenge and this presents a major incentive to the growth of biolubricants. Currently, biolubricants form a very minute part of the total lubricant market and companies have already begun exploring this segment.
In the same manner, biopolymers are looking to replace the long-established petrochemical-based polymers due to their environmentally-friendliness. This sector is still in its infancy but shows extensive opportunities for growth.
Oleochemical-based surfactant methyl ether sulfonate (MES) is looking to substitute linear alkyl benzene sulfonate (LABS) with growing interest in the area. MES possesses many favorable characteristics as compared to its counterpart LABS in terms of purity, actives levels and presence of volatile organic compounds. It is also mild on the skin and is suitable for powder and liquid detergents.
Need for oleochemicals
After the implementation of stricter environmental norms to reduce carbon footprint, the demand for sustainable and biodegradable products rose, thereby increasing the importance for oleochemicals and supporting the global oleochemical market. Customers have become more aware of the need for using natural sources and replacing the excessive dependency on petroleum-based products. This has led to newer products and applications of existing ones. Companies experimenting and exploring organic and/or inorganic options in the industry possess major prospect for growth.
Challenges for the oleochemical market ahead
Biodiesel is an important oleochemical-based product that forms a large consumer base. If there are any changes in government norms or blending regulations for biodiesel, it could significantly impact business of oleochemical-based products. Furthermore, the growing use of biodiesel could result in higher oil prices making it less attractive compared to petroleum-based products. Another major challenge is the growing popularity of shale gas as an alternate energy source. This could pose as a threat to the industry. In addition to this, since oleochemical industries require an excessive amount of feedstock to function smoothly, the continuous supply of resources could be a key issue for oleochemical companies.
Future of the global oleochemical market
Oleochemicals are used in a wide variety of applications ranging from personal care to food additives. Since its introductory and experimental stages, the global oleochemical market has come a long way and is still expected to grow over the coming years. Currently Asia-Pacific, the fastest growing market for oleochemicals, accounts for more than half of the industry, and home and personal care products as well as surfactants form the biggest end use segments. However, the entry of new competitors and growth drivers has led to new applications and products in the market, thereby strengthening the industry and lending it a promising future.
Chemical companies who focus on lubricants, surfactants and polymers can diversify into oleochemical-based products and expand their portfolio. Asia is the not just the largest consumer of oleochemicals but also a major producer. Availability of feedstock as well as a growing market are two of the main factors that companies can use to their benefit to invest in this segment and explore partnership or merger opportunities.
Some of the key players in the global oleochemical market are Myriant, Evonik, Metabolix, Solazyme, Emery Oleochemicals, Wilmar International, and Genomatica.