Oleochemicals are chemicals made from natural fats and oils of plants and animals. It is obtained by splitting fatty acids and glycerol from the triglyceride structure of fats and oils. Oils and fats are subjected to a methylation or hydrolysis process to yield various types of oleochemical compounds.
According to Ken Research Analysis, the Global Oleochemicals Market is expected to record a positive CAGR of ~9% during the forecast period (2022-2028) and is expected to reach approximately US$ 50 billion by 2028.
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The opportunity to replace conventional petroleum-based products in various sectors along with the easy availability of raw materials required for the production of oleochemicals is positively impacting the market.
- Petroleum is a fossil fuel that when used poses a risk to the environment. Governments are enforcing stricter regulations for the sparing use of petroleum which can be replaced by oleochemicals.
- Due to its numerous environmental benefits, biofuel generated from oleochemicals is growing in popularity when compared to petroleum-based diesel fuel as it can be produced from both plant and animal feedstock, making it simple to generate. All of these factors are thus contributing to the growth of the oleochemicals market.
The emission of volatile organic compounds is a major challenge faced by the oleochemicals market. Further, wastewater and hazardous waste produced from the oleochemical production process are anticipated to hinder the seamless growth of the market.
- Oleochemicals have a certain adverse impact on the environment such as VOC and other harmful gaseous emissions, wastewater release, hazardous waste release, etc. Volatile organic compounds are produced during the pretreatment of poor-quality glycerin solutions or in vacuum generation systems.
- Also, Air emissions from fatty acids production mainly include fugitive emissions of volatile organic compounds. Volatile organic compounds can cause odor emissions due to the presence of low molecular weight decomposition products. These factors create a barrier to the growth of the Global Oleochemical Market.
The Oleochemical Market witnessed disruption in the value chain owing to COVID-19 and the lockdown in major countries. The outbreak of COVID-19 further increased the demand for oleochemicals as they are used in soaps and disinfectants. During the pandemic, the fatty acids market came under pressure due to sluggish demand owing to weak downstream sectors such as industrial lubricants and tires but the fatty alcohols fared better in because the majority of these go into the making of household and personal care products. Due to COVID-19, the demand for oleochemicals was shifted mostly to personal hygiene and the pharmaceutical sector.
Key Trends by Market Segment
By Product Type: The fatty acid product type segment dominated the global Oleochemicals Market in 2021 and is expected to continue being the dominant segment during the forecast period.
- Fatty acid category is expected to grow as a result of rising demand for bio-based fatty acids from various end-use industries such as personal care, cosmetics, chemicals, food & beverages, industrial sectors, and others. Additionally, fatty acids are cheaper than their counterparts which is further accelerating the growth of the market.
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By Application: The healthcare & pharmaceuticals application segment was the highest contributor to the Global Oleochemicals Market in 2021.
- Oleochemicals are used as preservatives, thickening agents, and emollients in the pharmaceutical industry. Fatty acid derivatives like Isopropyl myristate are used as a moisturizer in topical medicinal products as well as an emollient or thickening agent in other pharmaceutical applications.
- Glycerin-99.7% is used in the manufacturing of cough syrups and oral care products acting as a humectant. Products like sanitizers, soaps, and cleaning and disinfectant products used in healthcare facilities require fatty acid and fatty alcohol. Owing to the huge demand for oleochemicals, the healthcare and pharmaceutical segment is anticipated to augment the growth of the market.
By Geography: Asia Pacific accounted for the largest market share in 2021 among all regions within the Global Oleochemicals Market owing to the strong raw material base, and shift in consumer preference to renewable products.
- Asia Pacific Oleochemicals Market is anticipated to grow as green alternatives are being increasingly adopted and raw materials become more readily available. For instance, the biggest producers of palm oil, the primary feedstock for oleochemical production, are Malaysia and Indonesia.
- According to the Malaysian Palm Oil Council, Malaysia produced 25.8% of the world's total palm oil. In terms of demand, China is the biggest consumer of fatty acids, taking up some 30% of global output, while the Asia Pacific region consumes about 35% of the world’s fatty alcohol production.
Competitive Landscape
The Global Oleochemicals Market is highly competitive with ~250 players which include globally diversified players, regional players as well as a large number of country-niche players.
Large global players hold the highest market share ~40% which is followed by the regional players holding ~35% share. Some of the major players in the market include Emery Oleochemicals, BASF SE, Wilmar International, Godrej Industries, Cargill Inc, Kao Corporation, Edenor Technology Sdn Bhd, Oleon NV., IOI Group Berhad, P&G Chemicals, Twin River Technologies Inc., Croda International Plc., and others.
Recent Developments Related to Major and Emerging Companies
- In May 2022, Oleon NV. started the construction of a new production facility in Texas, USA. The new plant will produce esters utilizing our newest technology, compliant with the highest industry standards, and also provide blending services to support Oil & Gas business.
- In September 2020, Emery oleochemicals released its EMERY® E general-purpose fatty acid esters product line. These are sustainable alternatives to petrochemical-based materials and can be used in formulations of a wide range of consumer and industrial systems such as bio-diluent, solvent, cleaning and stripping products, cosmetic emollient and dispersant, plastic additives, etc.
- In May 2019, the new plant construction of PT Apical Kao Chemical a joint venture of Kao corporation and Apical Group Ltd was completed. With the completion of the new factory, the Kao Group will increase its production capacity, produce competitive oleochemical products, and promote its stable supply, to expand the chemical business.
Conclusion
The Global Oleochemicals Market is forecasted to continue a gradual growth that is witnessed during the forecast period. Key trends driving market expansion include the recyclability of oleochemicals, increasing demand for biodegradable and sustainable products, and the growing demand from the end-user industry such as pharmaceutical, cosmetics, and food industries. The market is highly competitive with ~250 participants concentrating on expansion strategies through product innovations as well as acquisitions and mergers.
Note: This is an upcoming/planned report, so the figures quoted here for a market size estimate, forecast, growth, segment share, and competitive landscape are based on initial findings and might vary slightly in the actual report. Also, any required customizations can be covered to the best feasible extent for Pre-booking clients, and the report delivered within a maximum of two working weeks.
Market Taxonomy
The Global Oleochemicals Market Size, Segments, Outlook, and Revenue Forecast 2022-2028 is segmented by product type and application. In addition, the report also covers market size and forecasts for the four major regions’ Oleochemicals Market. The revenue used to size and forecast the market for each segment is US$ billion.
By Product Type
- Fatty acid
- fatty alcohol
- Glycerol
- Others
By Application
- Healthcare & Pharmaceuticals
- Household Care
- Personal care & Cosmetics
- Food & Beverages
- Polymer & Plastic Additives
- Industrial
- Others
By Geography
- North America (USA, Canada, and Mexico)
- Europe (Germany, UK, France, Spain, and Italy)
- Asia Pacific (China, Japan, South Korea, India, Indonesia, and Australia)
- LAMEA (Latin America, Middle East, and Africa)
Key Players
- Emery Oleochemicals
- BASF SE
- Wilmar International
- Godrej Industries
- Cargill Inc.
- Kao Corporation
- Edenor Technology Sdn Bhd
- Oleon NV.
- IOI Group Berhad
- P&G Chemicals
- Twin River Technologies Inc.
- Croda International plc
