Oleochemicals Market Size, Share & Trends Analysis Report By Product (Fatty Acid, Glycerol, Fatty Alcohol), By Region (APAC, MEA, Europe, North America, CSA), And Segment Forecasts, 2018 - 2025

Industry Insights

The global oleochemicals market size was valued at USD 20.2 billion in 2016. It is anticipated to expand at a healthy CAGR of 5.2% over the forecast period. Growing demand for biodegradable products in various consumer applications such as personal care, detergents, food and beverages, and petrochemicals is expected to remain a significant factor driving the market. Favorable government policies regarding tax benefits and financial incentives for bio-based chemical producers are impacting the industry growth positively. Increasing scope of application coupled with product innovation will yield potential opportunities for companies in this industry over the forecast period.

Growing supply-demand gap along with overcapacity issues, primarily in the Southeast Asian countries such as Indonesia and Malaysia, will continue to remain a critical concern for industry participants. Growth in U.S. biodiesel sector will positively influence the oleochemical demand, which will lower the product prices for biodiesel sectors. Oleochemicals find application in a wide range of industrial segments including personal care, food additives, surfactants, and soaps and detergents.

Key chemical manufacturers including BASF, Arkema, DuPont, and Solvay, have shifted their key business capabilities towards using plant-derived biochemicals for manufacturing specialty products and polymers. This trend is projected to positively influence the companies involved in developing the downstream potential of oleochemicals such as fatty alcohols, glycerol, and acid esters. Major chemical manufacturers have increased their spending on sustainable development owing to the initiatives, which includes the elimination of toxic chemicals. Such initiatives prompted a shift in trend towards biodegradable and renewable products.

Manufacturers have taken a realistic approach to replace petrochemicals with bio-based chemicals in an attempt to minimize the reformulation and re-equipping time and cost. Increasing bio-diesel demand may increase biofuel prices, which are mostly affected by the changes in the government regulations and blending norms. These factors are expected to affect the overall economics of oleochemical-based products and hinder market growth. The raw materials used for manufacturing oleochemical include vegetable and animal oils and fats are derived from petrochemical feedstock.

Polyols, which are key feedstock for polyurethane production, are also produced using oleochemical routes thereby augmenting market growth in the near future. Oleochemical derived from vegetable oils, such as soybean oil, castor oil, and linseed oil, are used to develop polyamides, which are widely used in automotive and textile applications. Rapid commercialization of bio-based polyamide in the above applications is further anticipated to stimulate product demand over the forecast year. Easy availability of feedstock and rapid expansion of major end-use industries will drive the global oleochemicals market trend over the next few years. Indonesia and Malaysia are the major producers of base products for oleochemical.

Asia Pacific is the largest consumer, as well as producer, of oleochemicals and accounts for over half of the global production. Presence of a large number of domestic manufacturers in Southeast Asian countries, such as Malaysia, and high demand in the local markets have been major factors driving the region’s development. Government support in terms of tax benefits, particularly in the emerging markets of China and India, with an aim of promoting biodegradable chemicals production are also projected to complement the region’s growth.

Product Insights

Fatty acids emerged as the leading product category and accounted for over 55.0% of the overall revenue in 2016. Growing application scope for fatty acid in soaps and detergents and personal care industries will boost the segment demand over the coming years. Asia Pacific market for fatty acid in soaps and detergents was valued at USD 1,895.7 million in 2016 and is estimated to expand at a healthy CAGR in the coming years.

The global fatty alcohol industry has observed significant capacity additions over the past decade, particularly in South-East Asia and Western Europe. This was mainly due to its increasing demand in soaps and detergents, lubricants, personal care, and in other downstream chemical industries. Glycerol is anticipated to witness the fastest growth over the next few years on account of escalating demand as an important ingredient in various food and beverages, personal care, and detergent products.

Glycerin derivatives such as glycerol monostearate have gained prominence in the food and beverage applications including confectioneries, bakery, and protein drinks. This application segment is anticipated to emerge as the highest-growing glycerol application growing at a CAGR of 7.7% during the forecast period. Increasing need for durable and sustainable products in numerous end-use industries is driving the demand for plastics. This, in turn, will boost the demand fatty acids and other bio-based polymers or raw materials.

Regional Insights

Asia Pacific was the leading consumer and accounted for over 40.0% of the total market revenue in 2016. Large-scale Asian plantation firms have invested in downstream chemical capabilities to restrict oleochemical overcapacity in the region and to win over reduced profitability. For strengthening Asia as a major hub for downstream products and base oleochemicals, these plantation companies have also teamed up with chemical companies in the last few years.

Manufacturers are relying on natural chemicals to produce oleochemicals on account of shifting consumer focus toward natural products. This will bolster the market demand in the years to come. Increasing growth of end-use industries such as pharmaceuticals and personal care in the U.S. will boost the North America regional market in the years to come.

The Europe regional market is projected to witness a considerable growth over the forecast period. Growing importance of biodiesel as an alternative to petroleum-based fuels has been a major factor driving the region’s growth. Favorable policies such as blending norms and fluctuating prices of petroleum are expected to drive the biodiesel demand, which, in turn, is expected to positively impact the Europe regional market.

The Middle East and Africa region has a huge unexplored agricultural potential, which can be used for the raw material cultivation. The palm oil market in this region is expected to experience brisk growth in application like food and other industrial segments. Also, bio fuels offer a new potential for the African countries to improve the employment and economic scenario and contribute towards growth in rural income.

Oleochemicals Market Share Insights

Manufacturers have taken a realistic approach to replace bio-based chemicals from petrochemicals in an attempt to minimize the re-equipping and re-formulation time and cost. The market has significant opportunities for diversification and has witnessed a large number of mergers and acquisitions by industry participants over the past few years.

Procter and Gamble (P&G), Unilever, Johnson and Johnson, and Colgate account for major chunks of the global market share—over 5% each in the personal care and household products markets

The market has immense potential for new entrants, as well as established manufacturers. Existing companies can explore oleochemicals and derivatives based on the feedstock, either by forward or backward integration, which allows them to produce downstream products that add value to their existing process.

Significant integration across the raw materials suppliers for manufacturing oleochemicals has further intensified the industry competition.

Major companies operating in the global industry are SABIC; BASF SE; Cargill, Inc.; Akzo Nobel N.V.; TerraVia Holdings, Inc.; Wilmar International Ltd., Evonik Industries AG; Emery Oleochemicals Sdn Bhd; Evyap, Godrej Industries Ltd.; and Ecogreen Oleochemicals (Singapore) Pte Ltd..

Report Scope

Segments covered in the report

This report forecasts revenue growth at global, regional & country levels and provides an analysis of the industry trends in each of the sub-segments from 2014 to 2025. For the purpose of this study, Grand View Research has segmented the global oleochemicals market on the basis of product, and region:

• Product Outlook (Volume, Kilo Tons; Revenue, USD Million, 2014 - 2025)

  • Fatty acids

    • By Product

      • C6

      • C8

      • C8-10

      • C10

      • C12

      • C12-14

      • C14

      • C16

      • C18:0

      • C18:1

      • C18:2

      • C18:3

      • Others

    • By Application

      • Soap & Detergents

      • Intermediates

      • Plastics

      • Rubber

      • Paper

      • Lubricant & Greases

      • Personal Care

  • Fatty alcohol

    • By Product

      • C6-C10

      • C12-C14

      • C16-C22

      • Others

    • By Application

      • Personal care

      • Soaps and detergents

      • Amines

      • Lubricants

      • Others

  • Glycerol

    • By Product

      • Crude glycerol

      • Refined glycerol

    • By Application

      • Personal care & pharmaceuticals

      • Alkyd Resins

      • Polyether polyols

      • Food & beverages

      • Tobacco humectants

    • Others

• Regional Outlook (Volume, Kilo Tons; Revenue, USD Million, 2014 - 2025)

  • North America

    • US

    • Canada

    • Mexico

  • Europe

    • Germany

    • France

    • UK

    • Italy

    • Spain

    • The Netherlands

    • Belgium

  • Asia Pacific

    • China

    • India

    • Japan

    • Malaysia

    • Indonesia

    • Philippines

  • Central & South America (CSA)

    • Brazil

  • Middle East & Africa