The global xanthan gum market demand was 138.6 kilotons in 2013 and is expected to grow at a CAGR of 5.1 % from 2014 to 2020. Growing demand for gluten free food and beverage additives is expected to propel demand. Furthermore, increasing product demand for enhanced oil recovery operations is expected to propel the industry growth.
The industry is dominated by few major players including ADM, Jungbunzlauer, Cargill, Danisco, Fufeng Group Company Ltd and CP Kelco. Strategic initiatives taken by the major players in the market such as joint ventures and partnerships is expected to strengthen their position in the industry.
Growing demand for gluten free food and beverage additives is expected to propel demand. Furthermore, increasing product demand for enhanced oil recovery operations is expected to propel the industry growth. The industry is dominated by few major players including ADM, Jungbunzlauer, Cargill, Danisco, Fufeng Group Company Ltd and CP Kelco. Strategic initiatives taken by the major players in the market such as joint ventures and partnerships is expected to strengthen their position in the industry.
The demand in food & beverage was valued at USD 310.3 in 2013 and is expected to grow at a CAGR of 6.0% from 2014 to 2020. The product is primarily used in salad dressings, toppings, sauces, dairy products, baked and frozen foods on account of exhibiting properties such as emulsion stabilization, thermal stability and compatibility with functional ingredients.
Emergence of drilling fluids as lubrication solution in upstream oil & gas industry coupled with good thickening and emulsification property of the product is anticipated to have a positive impact on market. Growing oil & gas industry is anticipated to promote drilling meant for exploration and production, which is likely to fuel demand over the forecast period.
It offers stability to liquid medicines and good flow in suspensions and emulsions. Addition of xanthan gum to a wide range of drugs extends contact time of active ingredients and retards drug release in tablets. The aforementioned factors are expected to propel demand in pharmaceutical application over the forecast period.
In the cosmetic industry, the product is used in the preparation of water gels, usually in conjunction with bentonite clays. Xanthan gum is also employed in oil-in-water emulsions to help stabilize oil droplets against coalescence. As a result, the demand in this application segment is expected to grow at a CAGR of 5.1% from 2014 to 2020.
The demand in pharmaceutical segment accounted for 4.9% in 2013. It is primarily used to retard drug release in tablets. In addition, the product is compatible with numerous thickeners and stabilizers, enabling its use in drug manufacturing industry. Growth in this end-use industry is likely to propel demand over the projected period.
Rising prevalence of diseases such as cancer and cardiovascular diseases on account of climate dynamics is anticipated to promote phytosterols demand in pharmaceutical applications. In addition, rising awareness towards side effects associated with prescribed conventional medicines is anticipated to promote the role of naturally derived phytosterols over the forecast period.
Other applications of the product include its use in the manufacturing of various consumer products including cleaners and detergents, paper, textiles, agrochemicals, fertilizers, paints, coatings and leather. In addition, xanthan gum is also used in the manufacture of adhesives and sealants on account of its high viscosity and high stabilization properties.
North America was the second largest market for the product accounting for 30.0% of market volume in 2013. Recovery of the healthcare industry in the U.S. coupled with pharmaceutical growth in Mexico and Canada are likely to propel the market growth over the forecast period.
In North America, drilling activities increased owing to the growing demand of petroleum and petroleum based products which is expected to augment the oil & gas industry which in turn is anticipated to boost xanthan gum market growth. Furthermore, technological advancements of enhanced oil recovery (EORs) and hydraulic fracturing has resulted in increasing availability of shale gas and tight oil. Growing availability of shale gas and tight oil is expected to ensure growth of xanthan gum market over the forecast period.
Regulatory support intended for promoting food & beverage sector in India is anticipated to promote the demand for gluten free xanthan gum over the forecast period. However, abundance of guar gum in India coupled with sharing similar application scope to xanthan gum is anticipated to pose a credible threat over the forecast period.
Government of Middle East countries are focusing on reducing reliance on energy sector and have framed numerous initiatives to boost domestic production output in chemicals, construction and automotive sectors. These strategies are expected to increase market penetration of xanthan gum in aforementioned applications.
Abundant availability of carbohydrate sources such as sugarcane in Brazil, China, India and Pakistan is likely to have a positive impact on market. Agricultural growth in India and China is anticipated to have a positive impact on raw material suppliers in the near future. However, presence of several raw material suppliers is expected to lower their bargaining power.
Regulatory inclination towards promoting use of xanthan gum as emulsifying and stabilizing agent in food & beverage industry is anticipated to promote product demand. In addition, increasing deployment of enhanced oil recovery in Russia to promote domestic oil & gas industry growth is likely to drive market growth.
Saudi Arabia was the largest crude oil producer with a volume of 11,701.51 thousand barrels in 2013. Robust production base of crude oil in Saudi Arabia is anticipated to promote drilling meant for exploration, development and production, which is anticipated to fuel demand over the forecast period.
Fufeng Group and Jungbunzlauer are major integrated product manufacturers, with their manufacturing base located in China and Austria, where carbohydrates is derived from potato and other starch products such as sugarcane.
The companies including Pfizer, Cargill and ADM are integrated in their operations where the companies procure raw materials from suppliers and manufacture xanthan gum; these companies captively consume the product to manufacture a variety of foods & beverages as well as pharmaceuticals.
In 2013, CP Kelco introduced KELTROL a new gluten free xanthan gum variety of bread which could be easily structured as per the need of the consumers for better dough viscosity, improved dough structure and increased volume.
Leading manufacturers, Fufeng and Deosen, opted for capacity expansion in order to maintain their dominant position in the market. This led to market oversupply and resulted in decreasing prices of the product at the global level. Cut-throat competition between these two companies further decreased xanthan gum prices from 2012 to 2014.
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