Frost & Sullivan Observes that Downstream Activities are Expected to Provide Stability to the Southeast Asian Oleochemicals Market |
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By: Frost & Sullivan Posted: 2009-08-24 01:50:36 |
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Downstream activities are the order of the day, as basic and mature oleochemicals segments such as fatty acid and fatty alcohol are exploring derivatives including fatty amines, soaps, alkanolamides, and esters. Downward integration is expected to provide market participants a good balance in case of volatile feedstock prices, as they are largely dependent on the harvest conditions.
There is also an increased production of value-added products from the basic intermediates to meet the demand from the food and beverage industry. New analysis from Frost & Sullivan, Southeast Asia Oleochemicals Market, finds that the fatty acid segment earned revenues of $1.85 billion in 2008 and estimates this to reach $2.51 billion in 2015 due to its potential in other applications, pushing up exports. Meanwhile, the fatty alcohol segment earned revenues of $652.4 million in 2008 and is likely to reach $712.6 million in 2015 due to its increasing potential in the captive market. Lastly, the refined glycerin market earned $162.9 million in 2008 and is expected to touch $190.7 million in 2015 due to the growing demand from new applications. "Increasing global demand from industries such as pharmaceuticals, personal care, detergents, paints, cosmetics, food, plastics, and rubber, is driving the consumption of oleochemicals," say Frost & Sullivan Research Analysts Ratneswary Balasingam and Sri Ganesh Janarthanan. "Exports of oleochemicals are also on the rise as the products offered by many Southeast Asian participants, including those in Malaysia and Indonesia, are competitively priced and highly valued in the world market." Oleochemical manufacturers will feel heartened by the rising consumption in India and China, in line with their economic growth. China's gross domestic product (GDP) grew by more than 10 percent in 2007, fuelling the development of a variety of end-user industries including personal care and pharmaceuticals. Correspondingly, the demand for key ingredients such as fatty acids and fatty alcohol is expected to swell in Southeast Asia. "This market growth is also driven by the wide availability of raw materials; there is abundant supply of vegetable-based raw materials such as palm and coconut oil, giving Southeast Asian participants a strong edge," notes Janarthanan. "This advantage has increased the number of participants and manufacturers of oleochemicals in Southeast Asia, thereby facilitating the overall growth of the fatty acid market in the region." One of the upshots of the developments of new fatty acids and fatty alcohol plants in Southeast Asia is the amplified demand for lauric oil. Further, Southeast Asia could face an issue of overcapacity due to the capacity enhancements announced in Indonesia and Malaysia. This situation, in turn, could result in a scarcity of raw materials. Moreover, downstream activities by the cash-rich plantation companies could lead to price wars. To survive in these conditions in a mature market, participants need to establish cost-saving practices. "Forming partnerships that enable economies of scale to be achieved along with joint ventures with plantation companies are likely to provide market participants with a continued supply of raw materials," observes Balasingam. "This strategy is critical, as even large-scale participants are expected to witness a downward trend in revenues due to intense competition in the market, compounded by growing activity in the biodiesel industry." Oleochemical companies could also increase emphasis on technology and R&D to create new end-user applications to resolve overcapacity issues. If you are interested in a virtual brochure, which provides a brief synopsis of the research and a table of contents, then send an e-mail to Donna Jeremiah, Corporate Communications, at djeremiah@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country. Upon receipt of the above information, a brochure will be sent to you by e-mail. Southeast Asia Oleochemicals Market is part of the Chemicals & Materials Growth Partnership Services program, which also includes research in the following markets: Southeast Asian Market for Construction Chemicals, Southeast Asia Plastic Flexible Packaging Market for Food, Indonesian Bio-Ethanol Market, Southeast Asia Thermoplastic Elastomers Market, and Global Methyl Ester Sulphonate Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 35 offices on six continents. Southeast Asia Oleochemicals Market P2B8 Contact: Donna Jeremiah Corporate Communications - Southeast Asia P: +603 6204 5832 F: +603 6201 7402 |
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