Press Releases

Oleochemical Fatty Acids Industry Shifting Regional Focus to SE Asia

January 11, 2017

Wellesley, Mass., Jan 11, 2017 – In the past 10 years, the focus and momentum of the oleochemical fatty acids industry has shifted from Europe and North America to Asia-Pacific. BCC Research reveals in its new report that oleochemicals like fatty acids will be a vital link in the supply chain as their outstanding functionality and versatility make them ideal to be used in a multitude of applications.

Oleochemicals are derived from natural sources comprising oils and fats from vegetable and animal origins. Their natural, organic background is the main difference between petrochemicals that are derived from crude oil.

The global market for natural fatty acids should reach $16.2 billion by 2021, up from $12.4 billion in 2016, demonstrating a five-year compound annual growth rate (CAGR) of 5.6%. The derivatives market should total $6.2 billion and $8.5 billion in 2016 and 2021, respectively, growing at a five-year CAGR of 6.8%. The personal care, cleaning products, polymerization, and vulcanization market should grow from $5.0 billion in 2016 to $6.2 billion by 2021 at a five-year CAGR of 4.7%.

Oleochemicals service different types of markets. More industrial-oriented segments require ingredients that can achieve or even surpass the performance specification of the application at a price that is affordable, while the more wellbeing- and health-oriented markets require ingredients that not only are suitable for human contact, whether topically applied or orally digested, but also are sourced from renewable and natural-grown origins. In both cases, ingredients consumed must meet all safety, health and environmental regulations and legalization.

The dominance and growth of production in Asian countries, particularly in China, should continue to expand. Malaysia, Indonesia, and China export large amounts of raw material—palm-based oils, palm kernel oil and coconut oil—to Europe and the U.S., where these products compete with fatty acids (e.g., tallow), which are more common in these regions.

"Many palm oil plantation companies in Asia-Pacific significantly expanded the capacity of their existing production sites and export their palm oil globally," says BCC Research analyst Andrew McWilliams. "For this reason, the sector should be very careful to avoid overcapacity, which could lead to lower prices and margins. This risk is not exaggerated with the addition of so much extra palm oil, palm kernel oil, and soya capacity around the world. However, at the end of the last decade, demand for oleochemicals was still increasing, particularly inBrazil,Russia,IndiaandChina(the BRIC countries) andEastern Europe."

Global Markets for Oleochemical Fatty Acids (CHM062C) analyzes how the composition of various fats and oils transform into the range, quality and types of acids produced and the applications for which those acids can be used. The report also examines the various attributes of different acid types and how these types compete with synthetic formed products from the petrochemical route and the major applications outlets. Global market drivers and trends, with data from 2015, estimates for 2016, and projections of CAGRs through 2021 also are provided.

Editors and reporters who wish to speak with the analyst should contact Steven Cumming at steven.cumming@bccresearch.com.

Global Markets for Oleochemical Fatty Acids( CHM062C )
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