Frost & Sullivan projects revenue from oleochemicals manufactured in Southeast Asia - including fatty acids and fatty alcohols used in lubricants manufacturing - will more than double from 2013 to 2020, fueled by abundant raw materials availability, low manufacturing costs and escalating consumer preference for vegetable-based products.
The international market research firms Southeast Asia Olechemicals Market analysis found products manufactured in Southeast Asia were mainly basic oleochemicals, including fatty acids, fatty alcohols and glycerin. Frost & Sullivan estimated 2013 market revenue at U.S. $1.3 billion for fatty acids, $471.6 million for fatty alcohols and $61 million for refined glycerins. For 2020, the firm projects $2.7 billion revenue for fatty acids, $1 billion for fatty alcohols and $131.9 million for refined glycerins.
All over the world, the demand for fatty acids and fatty alcohols is swelling in end-user industries such as cosmetics, food, plastics and rubber, Frost & Sullivan Chemicals, Materials and Food Consultant Sharmila Subramaniam said in an Oct. 3 news release. Exports of these two derivatives are also on the rise as the products offered by many regional participants, especially those in Malaysia and Indonesia, are competitively priced and highly valued in the global market.
Feedstock cost hinders the markets, the firm found, noting that intensifying demand for vegetable-based raw materials has impacted manufacturers profit margins. Raw materials account for 80 to 90 percent of the costs of fatty acids or fatty alcohols, the firm stated. Consequently, the frequent fluctuations in the prices of vegetable oils, such as palm oil and coconut oil, ripple into the oleochemicals market.
As global consumer preference for natural and biobased products rises, demand from markets such as China, India and the United States will drive the Southeast Asian oleochemicals market, Sharmila said. The market will also benefit from emerging applications for all three derivatives - fatty acids, fatty alcohols and glycerin - in the areas of biolubricants, green chemicals, bioplastics, biopolymers, antioxidants and epichlorohydrin, which is a chemical intermediate.