OLEOCHEMICALS MARKET ANALYSIS

The global oleochemicals market size was valued at US$ 22.66 billion in 2022 and is anticipated to witness a compound annual growth rate (CAGR) of 6.9 % from 2023 to 2030. The oleochemicals market is growing due to the rising demand for environmentally friendly chemicals. These green chemicals are a suitable substitute for products derived from petroleum, as they have low levels of toxicity and can be sourced from renewable feedstocks. They are also cost-efficient, owing to which they are becoming an ideal choice for manufacturers of detergents, printer inks, oils and greases, lubricants, pesticides, cosmetics, food additives, and other chemicals.           

Global Oleochemicals Market: Regional Insights

Based on geography, the global oleochemicals market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East & Africa.

Geographically, the Asia Pacific region is anticipated to lead the oleochemicals market over the forecast period. This is largely due to the growing demand for sustainable and biodegradable products, which are widely used in Asia. Furthermore, the region has an extensive manufacturing capacity that provides a competitive advantage over other regions

North America is expected to witness significant growth in the near future owing to the strict government norms on the usage of petroleum-based products due to their harmful environmental effects. North America regional market for specialty oleochemical was valued at US$ 3,989 million in 2019 and is expected to reach USD 7,288.8 million over the forecast period.

Europe market is expected to gain fastest growth over the forecast period owing to the growing demand for biodiesel and presence of favorable government policies. 

Figure 1. Global Oleochemicals Market by Region, 2022

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Global Oleochemicals Market Drivers:

Growing demand for sustainable and biodegradable products to augment market growth

These products are also environmentally friendly and easy to use. Therefore, they are becoming the preferred alternative to synthetic chemicals. Moreover, the demand for oleochemicals is expected to increase as consumer expenditure shifts from cosmetics to essentials, including soap and disinfectants. The oleochemicals industry is growing rapidly and will continue to do so in the future. This is because oleochemicals are inexpensive and can be produced easily using natural, renewable resources.

Rising demand from cosmetic and personal care sector to propel market growth

The demand for oleochemicals is being driven by the growing demand for cosmetics and personal care items that are hypoallergenic and chemical-free. Additionally, the rising construction activities across residential, commercial, and industrial spaces is driving the need for oleochemicals in the manufacturing of paints and adhesives. The growing demand for premium apparel that requires high-quality fabric finishes is further boosting the growth of the oleochemicals market.

Global Oleochemicals Market Opportunities:

Growing awareness regarding the benefits of using green chemicals is expected to open new avenues for the oleochemicals market. The oleochemical industry has gained momentum in recent years due to surging demand for green chemicals, growing environmental regulations and depletion of fossil fuels. Moreover, the industry is expected to grow at a faster rate because of high demand from end-use industries and increasing supply availability of raw materials.

The major oleochemicals producers are focusing on agreements & partnerships to expand their product portfolio for various applications and deepen their regional reach. This strategy can prove to be effective for oleochemicals manufacturers as it helps them increase their market share in the global market. For instance, in February 2022, DKSH has entered a partnership with IOI Oleo, a supplier of oleochemical specialties, for Australia, New Zealand, the Philippines, Taiwan, South Korea, and Vietnam.

Global Oleochemicals Market Trends:

Increasing adoption in food and beverage sector is a recent trend

Oleochemicals can also be used in the manufacture of food and beverages. For example, oleochemicals are used as thickeners, stabilizers and other food additives in the production of processed foods and beverages. The animal nutrition segment is another rapidly growing application of oleochemicals. Moreover, the use of oleochemicals in animal feed is also beneficial to the health of animals as they provide a high source of energy, improve digestibility and promote antimicrobial activity.

Ongoing research and development activities

Companies are focusing on research & development to develop innovative products in order to increase their profit margins. For instance, in June 2018, Wilmar International Ltd. and National University of Singapore (NUS) announced the joint establishment of research facility worth USD 100 million in order to carry out research related to green production technologies for industrial enzymes and biochemical including oleochemicals.

Global Oleochemicals Market Restraints:

Fluctuating price of raw materials is expected to hamper the market growth

The development of oleochemicals market is often hindered by high input costs. This is especially the case for the production of fatty acids, which are essential to the manufacture of oleochemicals. The price of crude oil is usually volatile, making it difficult to predict future pricing for these chemicals. Palm kernel oil, coconut oil, high erucic rapeseed oil and beef tallow are the most commonly used raw materials in oleochemicals production. However, volatility in the prices of these materials has had a significant impact on the oleochemicals industry.

Release of VOC emissions during production of chemicals to restrict market growth

The production of oleochemicals leads are associated with the environmental and health issues as VOC are released during the glycerin processing. This leads to can harm human organs like eyes, throat, nose, and eyes. All these factors are expected to hinder the market growth over the forecast period.    

Figure 2. Global Oleochemicals Market by Product, 2022

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Global Oleochemicals Market Segmentation:

The global oleochemicals market report is segmented into product, application, and region

Based on product, the market is segmented into Specialty Esters, Fatty Acid Methyl Esters, Glycerol Esters Alkoxylates, Fatty Amines, and Others. Out of which, Fatty Acid Methyl Esters are the leading oleochemicals type segment, and have a noticeable demand from pharmaceuticals & food industries, soap & detergent, candles, waxes, lubricants, and paints & coatings. They are used to manufacture surfactants, dispersing agents, wetting agents, emulsifying agents, and solvents.

Specialty esters segment is also expected to witness significant growth in the near future. Specialty esters are ideal alternative to petroleum based chemicals and materials. Specialty esters include product categories such as glycol esters, isopropyl palmitate, lactate esters, and sorbitan esters

Based on application, the market is segmented into Personal Care & Cosmetics, Consumer Goods, Food Processing, Textiles, Paints & Inks, Industrial, Healthcare & Pharmaceutical, Healthcare & Pharmaceutical, and Other. Out of which, Personal Care & Cosmetics is expected to dominate the global market over the forecast period. These oleochemicals are then used to make everyday products like soap bars, detergents and shampoo. In particular, lauric acid (also known as sodium lauryl sulfate) is one of the most commonly used soap additives and is also used in many other personal care items

Consumer Goods segment is also expected to witness significant growth in the near future and this is owing to the growing demand from home care product such as shampoos, soaps, cleaners, and detergents

Global Oleochemicals Market: Key Developments

In September 2020, Emery Oleochemicals announced the introduction of its new Fatty Acid Esters Product Line marketed under the brand name EMERY E. the product wil sever as an alternative to petrochemical- based materials and can be used in the formulation of a wide range of end use products including cosmetic emollient and dispersant, industrial lubricant and plastic additive among others.

In November 2019, Emery Oleochemicals announced the expansion of its distribution partnership with Omya Inc. Omya will provide technical support to Emery’s U.S. customers for green polymer additives (GPA) products such as release agents, antifogging, lubricants, and specialty plasticizers.

In October 2018, Emery Oleochemicals’ Germany-based subsidiary, Emery Oleochemicals GmbH, announced a new distributor agreement with Nordic IMCD. Nordic promotes, distributes, and provides technical assistance for Emery’s well-known brands such as EMEROX, EDENOL, and LOXIOL.

In November 2020, Vantage Specialty Chemicals announced capacity increase for N-Methyltaurine, a key key intermediate for the synthesis of taurate surfactants worldwide. The additional capacity will enable the company to serve effectively its end users and brands interested in its Metaupon™ range of Sodium Methyl Oleoyl Taurate Sodium Methyl Cocoyl Taurate surfactants.

In November 2018, Vantage Specialty Chemicals, Inc. announced its acquisition of LEUNA-Tenside GmbH, a key player engaged in surfactant manufacturing. The strategic acquisition enables former to strengthen its foothold in European market.

Global Oleochemicals Market: Key Companies Insights

The global oleochemicals market is highly competitive. This is attributed to continuous launch of new technologies due to ongoing R &D and efforts by value chain participants. Moreover, key players are adopting various business growth strategies in order to expand their presence on regional as well as global basis. Some of the key players in the global oleochemicals market are Vantage Specialty Chemicals, Inc., Emery Oleochemicals, Evonik Industries AG, Wilmar International Ltd., Corbion N.V, Cargill, Incorporated, and KLK OLEO

*Definition: Oleochemistry is a subfield of organic chemistry that uses long-chain fatty acids to manufacture other useful products. Triglycerides in vegetable oil can be functionalized through a number of chemical reactions such as epoxidation, acrylation of epoxies, transesterification and amidation to produce esters, amides and amines. These oleochemicals can be used in place of a wide range non-biodegradable chemicals.