World Markets for Fermentation Ingredients

Report Highlights

• The global market for fermentation products was estimated at $14.1 billion in 2004 and is expected to rise at an average annual growth rate (AAGR) of 4.7% to $17.8 billion in 2009.
• Crude antibiotics are estimated at $5 billion in 2004. This is approximately the same value as in 1998, with volumes increased but prices eroded substantially.
• Amino acids are the second largest and nearly the fastest growing category, and estimated at $3.5 billion in 2004. The market in 2009 is expected to reach nearly $5 billion.
• Organic acids represent the third largest category and is dominated by citric acid. The total market value will rise to $3.0 in 2009.
• Among the rest, only xanthan will see anaemic growth due to price erosion.

INTRODUCTION

This BCC report is an update of a document issued in 2000. In that time, the fermentation industry changed dramatically. While the main categories of fermentation products still are the same, the industry structure within the categories developed strongly, in terms of technology and markets as well as in terms of the companies supplying products.

In the past, it was possible to allocate fermenter capacities to output and in relation to production values for all categories. This systematic allocation no longer is possible for antibiotics and hardly possible for enzymes. Due to strong improvements of efficiencies, but especially because of the modified production routes, fermenter size does not mean much in estimating production capabilities of antibiotics. Production costs and production pathways are increasingly important. Still, all fermentation depends on carbohydrates, and the availability and cost of carbohydrates has changed and is expected to change even more fundamentally in the coming years.

As a consequence, this report focuses on the market for major fermentation products and their interrelationships with, and dependency on carbohydrates. It reviews the global fermentation industry with emphasis on major fermentation-derived food, feed and pharmaceutical ingredients as well as on some products with industrial applications.

SCOPE OF STUDY

The report contains:

• Examinations of the main fermentation products and the most important markets and market structures
• Analysis of production values categorized by geographic area and product type
• Extensive discussion of future developments
• Analysis of major market players
• Analysis of major fermentation products, with their cost structures and development of cost factors
• Market forecasts through 2009
• Analysis of how the fermentation industry might develop in the future and in which parts of the world, and where fermentation plants might be run most economically.

METHODOLOGIES

The methodology applied in this report is based on:

• Analyses of the markets for major fermentation products.
• Descriptions of prices, volumes, and value trends.
• Estimations of future developments.
• Outline and comparison of strategies of major producers.
• Overview of production costs for major fermentation products.
• Analyses of availability and price trends of major raw materials.
• Synoptic view of future demand and production costs in various regions of the world.

INFORMATION SOURCES

There is abundant information on virtually all fermentation ingredients. However, most of this information does not show the inter-relationships between technology, market developments, strategies of producers, and raw material supply. Such inter-relationships can only be obtained by establishing and maintaining intimate relationships with the relevant companies, and this has served as the main source for information in this report.

ABOUT THE AUTHOR

Dr Ulrich März graduated in 1984 as an agro-economist at the University of Stuttgart, Germany. After more than ten years working in the fine chemical industry, Dr März started an independent consulting for the food, feed and agro-processing industry. His specialties are the evaluation of food, feed and supplement ingredient markets, the design and market introduction of bio-technologogically derived products as well as the economics of fermentation processes. Over nearly 10 years, Dr März authored a number of BCC technical market reports.