Lactic acid or 2-hydroxy propanoic acid is a colorless (or yellowish) syrupy liquid which is miscible with water and alcohol. Lactic acid production involves carbohydrate fermentation in the presence of an excess of calcium carbonate. Raw materials for lactic acid production include carbohydrates such as corn, sugarcane, sugarbeet, tapioca, etc. It is used in a variety of application areas, and has been gaining importance over the past few years due to its use in developing poly lactic acid (PLA). The global lactic acid market was estimated to be 714.2 kilo tons in 2013, which is expected to reach 1,960.1 kilo tons by 2020, growing at a CAGR of 15.5% from 2014 to 2020. In terms of revenue, the market was valued at USD 1,285.6 million in 2013, which is expected to reach USD 4,312.2 million by 2020, growing at a CAGR of 18.3% from 2014 to 2020.
Growing environmental awareness and demand for green packaging products is expected to drive demand for PLA over the next six years. PLA is derived from renewable sources and is biodegradable and compostable, which is expected to help reduce problems including solid waste disposal. Rising crude oil prices are also expected to drive global PLA demand over the forecast period, since it is expected to reduce dependency on traditional petroleum based products. Increasing adoption of bioplastics on account of changing consumer preferences and need for sustainable products is also expected to positively impact the global market in the coming years. The global PLA market was estimated to be 360.8 kilo tons in 2013, which is expected to reach 1,205.3 kilo tons by 2020, growing at a CAGR of 18.8% from 2014 to 2020. In terms of revenue, the market was valued at USD 793.9 million in 2013, which is expected to reach USD 2,169.6 million by 2020, growing at a CAGR of 15.8% from 2014 to 2020. However, PLA suffers from performance drawbacks as compared to conventional plastics and is susceptible to distortion at relatively low temperatures. This resulted in limiting the use of PLA to lower utility packaging applications. However, companies operating in the market have been aiming to develop proprietary processes in order to enhance heat resistance of the polymer.
Global PLA market by application, 2012 – 2020, (Kilo Tons)
Industrial applications accounted for 44.8% of the overall lactic acid market in 2013, and are expected to continue dominating the market over the forecast period. They are also expected to be the fastest growing segment, at an estimated CAGR of 19.3% in terms of revenue from 2014 to 2020. This can be attributed to their use in the development of biodegradable polymers and lactate solvents. Personal care is also expected to be a fast growing segment, since lactic acid is used in products for skin lightening, anti-acne, anti-wrinkle and anti-aging. Packaging is expected to remain the key application segment for PLA, and accounted for 59.6% of the overall market in 2013. PLA plastic bottles are durable, disposable, and possess properties such as transparency and gloss. Additionally, since it can be composted easily as compared to petroleum based products and does not emit toxic gases on incineration, demand in this application area is expected to remain strong through the forecast period. The PLA market for textiles is expected to grow at the fastest rate of 17.5% in terms of revenue from 2014 to 2020.
North America is expected to be the largest regional lactic acid market over the forecast period, and accounted for 34.5% of the global market volume in 2013. Growing demand across application segments is expected to be the key driving force for the industry in this region. Asia Pacific is expected to be the fastest growing market in terms of volume and revenue, at an estimated CAGR of 19.5% in terms of revenue from 2014 to 2020. Europe accounted for 37.4% of the global PLA demand in 2013; it is also expected to remain the largest regional PLA market over the next six years. The legal framework conditions in Europe as well as market penetration of biobased materials in packaging are expected to drive the market in the region over the next six years.
The market is consolidated in nature, and industry participants include NatureWorks LLC, Purac, Galactic, Pyramid Bioplastics, BASF, and Synbra among others. Product innovation and growth in production capacity are among the key initiatives adopted by market players in order to gain market share. Favorable regulatory scenario for the use of green packaging on a global level is expected to aid in market expansion over the forecast period. Continuous development efforts to develop higher heat resistant PLA are expected to play a key role overcoming barriers to market growth.