Middle East Bio-chemicals market was pegged at 1,998.5 Kilo Tons in 2022, and is expected to exhibit a CAGR of 6.57%, in terms of volume, over the forecast period (2023-2030) to reach 3,326.0 Kilo Tons by 2030. Traditional chemicals that are derived from petroleum sources are used more than bio-based chemicals. Bio-chemicals market is expected to witness growth over the forecast period, as a result of increased expenditure by chemical producers in research and development to establish more efficient processes for using bio-resources. Manufacturers are shifting their preference towards bio-chemicals, and thus, there is increasing demand for bio-chemicals. In order to reduce plastic pollution, leading packaging manufacturers are adopting sustainable strategies to offer environment friendly products.
For instance, in June 2019, Berry Global Group Inc., Berry Global, Inc. produces and markets plastic packaging products. The Company provides agricultural films, drink cups, plates, bottles, bowls, jars, containers, lids, tubes, closures, and trash bags, as well as offers tapes, adhesives, and other packaging products. Berry Global serves customers worldwide. Signed the new Plastic Economy Commitment led by the Ellen MacArthur Foundation to eliminate plastic pollution at its source. The company develops innovative packaging products to enhance recyclability to create more sustainable packaging in the near future. Moreover, in October 2019, © Henkel Adhesives Technologies India Private Limited, manufactured chemically recycled plastic bottles in coordination with Alpha Packaging. This product has been designed as an important step towards circular economy for plastic to reduce plastic pollution. Such activities by key manufacturers in Middle East is expected to drive the market growth throughout the forecast period. Raw materials used for the production of the Bio-chemicals includes corn, sugarcane, sugar beet, wheat, and cassava, among others. Low costs associated with the production of these raw materials, the overall cost for the production of bio-based chemicals is low as compared to conventional non-renewable chemicals. These raw materials can be produced on a large scale without any hindrances.
Middle East Bio-chemicals Market- Impact of Coronavirus (Covid-19) Pandemic
COVID-19 impact had a mixed impact on the Middle East bio- chemicals market. The pandemic led to reduced demand for construction chemicals, and thus, the construction sector was affected by the pandemic as many projects were delayed or cancelled. This led to a decrease in demand for construction chemicals such as adhesives, coatings, and sealants. Moreover, Middle East Bio-chemicals was also effected by disruptions in supply chain. The petrochemical industry is a key contributor to the Bio-chemicals market in the Middle-East. However, the pandemic led to disruptions in the supply chains for petrochemicals including delay in the delivery of raw materials and chemicals. Government support for local producers is a good effect of the pandemic. Several governments in the Middle East have implemented policies to encourage local production of bio-chemicals, in order to reduce dependency on imports and supports the local economy during the pandemic. Overall COVID-19 had a mixed impact on Middle East Bio-chemicals market.
Middle East Bio-chemicals Market- Drivers
Rising demand for natural & safe ingredients from personal care & cosmetics industry is expected to boost demand for bio-chemicals in Middle East. Polylactic acid and bio emulsifiers are used in the personal care industry due to its moisturizing, sebum control, pH adjustment, anti-aging, and antimicrobial properties. Moreover, due to stringent regulations on volatile organic substances (VOC’s), there is huge demand for bio- chemicals in the paints & coatings industry. Properties such as low corrosion, low toxicity, high solvency power, water miscible, and excellent pigment wetting are expected to boost demand for Bio-chemicals in the paint & coating industries.
Figure 1. Middle East Bio-chemicals Market, By Application, 2022
Governments in the Middle East are promoting the usage of Bio-chemicals in various sectors including agriculture, construction, and healthcare. For instance, in 2030, the Saudi Arabia government is investing in the production of biofuels and bio- chemicals, while the UAE government has launched the “Bioeconomy Strategy 2030” to promote the usage of bio-based products and technologies in various sectors. This factor is expected to drive the market growth during the forecast period.
|Base Year:||2022||Market Size in 2022:||1,998.5 KT|
|Historical Data for:||2017 to 2021||Forecast Period:||2023 to 2030|
|Forecast Period 2023 to 2030 CAGR:||6.57 %||2030 Value Projection:||3,326.0 KT|
BASF SE, Clariant A.G., Evonik Industries A.G., Total S.A., Cargill Inc., Biolive, Saudi Biodiesel, Saudi Bio-Acid Company, Sain Bag, and Neutral Fuels
|Restraints & Challenges:||
Middle East Bio-chemicals Market- Restraints
The production of Bio-chemicals requires huge investment in technology and infrastructure that can be a barrier for smaller companies or those with limited funding. Building a bio-refinery or other bio-based production facility requires high capital investment. This factor can hinder the market growth during the forecast period.
Among application, the food & beverages segment accounted for largest market share of 31.70%, in terms of revenue, in 2022. Bio-chemicals are used in the manufacturing of food ingredients that are used in the food processing industry. Growing packaged food industry in the Middle East is expected to boost demand for food ingredients, and this is further expected to boost demand for bio-chemicals.
Personal Care & Cosmetics segment is also expected to witness the fastest growth, due to rising trend of certified products in this region Bio-chemicals are used in the formulation of various personal care & cosmetic products due to its neutral and sustainable properties.
Figure 2. Middle East Bio-chemicals Market, By Country
Middle East Bio-chemicals Market - Country Insights
Saudi Arabia accounted for the largest market share of 40% in 2018, and is expected to retain its dominance throughout the forecast period. In Saudi Arabia, non-biodegradable plastic packaging products were banned in 2017, and according to the new government regulations, plastics needs to be Oxo-biodegradable. According to regulations of the Saudi organizations such as Saudi Standards, and Metrology and Quality Organization (SASO), plastic products must be manufactured from approved Oxo-biodegradable material. This regulation is applicable for production and import of plastic packaging in Saudi Arabia. Such government policies and regulations are expected to boost demand for Bio-chemicals and materials in the packaging industry in the region.
Gulf Cooperation Council (GCC)comprises of six countries including Saudi Arabia, the United Arab Emirates (UAE), Qatar, Bahrain, Oman, and Kuwait. The GCC countries have a strong presence in the Bio-chemicals market, due to abundance of natural resources particularly oil and gas in these countries. These countries investing the development of bio-chemicals, as part of their efforts to diversify their economies and reduce dependence on fossil fuels.
Middle East Bio-chemicals Market- Recent Developments
Middle East Bio-chemicals Market - Key Players
Major players operating in the Middle East Bio-chemicals market include BASF SE, Clariant A.G., Evonik Industries A.G., Total S.A., Cargill Inc., Biolive, Saudi Biodiesel, Saudi Bio-Acid Company, Sain Bag, and Neutral Fuels.
Definition: Bio chemicals are chemical compounds that are naturally occurr in living organisms. These compounds include amino acids, nucleic acids, carbohydrate, lipids, enzymes, hormones, vitamins, and other organic molecules that are involved in various biological processes such as metabolism, growth, and development. Bio-chemicals are important in the field of biochemistry, as these are studied to understand the molecular basis of life and how different biological processed are regulated.
Bio-chemicals or bio-based chemicals are manufactured from bio-based renewable materials such as sugar, vegetable oils, starch, and others. The conversion of these bio-materials into bio-chemicals is carried out by fermentation or enzyme reaction.
Increasing adoption of bio-chemicals over petroleum based chemicals in different end user industries is expected to boost demand for bio-chemicals over the forecast period. Earlier, petroleum based oleo-chemicals were used in the manufacturing of surfactants, food additives, soaps, detergents products. Due to changing environmental policies, consumers are shifting their preference towards bio-based oleo-chemicals. In Middle East, most of the countries such as Saudi Arabia, Oman, Kuwait, and others are highly dependent on oil economy. Therefore, the need to develop environmentally, socially and economically sustainable economy is expected to drive the market growth.
Lack of legislation about production and usage of bio-chemicals is a major factor that is expected to restrain the market growth. Moreover, there is a lack of laws or legislation regarding production, usage or waste management of bio- chemicals in several countries such as Saudi Arabia and U.A.E. Recycling of bio- chemical products is also a major issue as recycling bio- chemicals without separating them from conventional chemical products can generate hazardous waste, and pose a threat to the environment.
Rising stringent regulations on banning the usage of non-biodegradable plastics, particularly in Saudi Arabia and UAE is expected to drive the Middle East bio-chemicals market growth. The ban on utilization of non-biodegradable plastics is expected to increase the usage of bio-based plastics. For instance, in 2013, The Ministry of Environment and Water, announced ban on the circulation and marketing of non-biodegradable plastic products. The ban also covers biodegradable plastic products, which are not registered within the Emirates Conformity Assessment System (ECAS).
Increasing focus of key players on business expansion is expected to drive the market growth in terms of revenue. For instance, in 2016, Clariant, announced construction of new plant in Saudi Arabia. The facility will manufacture bio-based polymers that are used in the packaging industry. Clariant AG is a global specialty chemicals company. The Company's products and services are grouped into four business areas: Care Chemicals, Catalysis & Energy, Natural Resources and Plastics & Coatings. Clariant develops, produces, markets and sells specialty chemical products for various end markets.
Key features of the study:
“*” marked represents similar segmentation in other categories in the respective section.
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