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The market factors influencing the oleochemicals industry are diverse and multifaceted, encompassing various economic, social, and environmental aspects. One significant factor is the growing demand for sustainable and eco-friendly products. With increasing awareness about environmental issues such as climate change and pollution, consumers are increasingly seeking alternatives to traditional chemical-based products. Oleochemicals, which are derived from natural oils and fats, offer a renewable and biodegradable option, making them attractive to environmentally-conscious consumers and businesses alike.
Oleochemicals are substitute compounds for synthetic compounds produced from petrochemicals. These are naturally obtained chemicals and generally derived from animal fats and natural oils from plants. The larger amounts of these oils and fats are synthesized by various chemical reaction into basic fatty compounds, important for use in the soaps & detergents, pharmaceuticals and oil-based industries.
Another key market factor is the fluctuation in crude oil prices. As oleochemicals are often used as alternatives to petroleum-based chemicals, changes in crude oil prices can significantly impact the competitiveness of oleochemicals in the market. When crude oil prices are high, oleochemicals become more cost-effective, driving up demand. Conversely, when crude oil prices are low, the competitive advantage of oleochemicals may diminish, leading to a slowdown in demand.
Furthermore, government regulations and policies play a crucial role in shaping the oleochemicals market. In many countries, there is a growing emphasis on promoting sustainable practices and reducing reliance on fossil fuels. This has led to the implementation of various regulations and incentives to encourage the use of bio-based products, including oleochemicals. Government support through subsidies, tax incentives, and renewable energy mandates can significantly boost the growth of the oleochemicals industry.
Moreover, technological advancements and innovations are driving the expansion of the oleochemicals market. With ongoing research and development efforts, new and improved processes for extracting and refining oleochemicals are continually being developed. These advancements not only enhance the efficiency and cost-effectiveness of oleochemical production but also enable the development of novel applications and products, further expanding the market potential.
In addition to these factors, shifting consumer preferences and lifestyle changes also influence the oleochemicals market. As consumers become more health-conscious and environmentally aware, there is a growing demand for natural and organic products. Oleochemicals, being derived from renewable plant sources, align well with these preferences and are increasingly being incorporated into a wide range of products, including personal care, pharmaceuticals, and food.
Furthermore, the globalization of trade and the emergence of new markets present both opportunities and challenges for the oleochemicals industry. As economies develop and standards of living rise in emerging markets, there is a growing demand for oleochemical-based products. However, increased competition from low-cost producers in regions such as Asia-Pacific can put pressure on prices and margins for oleochemical manufacturers in other parts of the world.
Covered Aspects:
| Report Attribute/Metric | Details |
|---|---|
| Growth Rate | Â 7.5% |
Oleo Chemicals Market Highlights:
Global Oleo Chemical Market Overview
Oleo Chemicals Market Size was valued at USD 23.25 billion in 2023. The Oleo Chemicals Market industry is projected to grow from USD 25.22 Billion in 2024 to USD 47.13 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 7.80% during the forecast period (2024 - 2032). Oleochemicals are organic compounds derived from natural vegetable oils, animal fats, rendered fats, lard, and fish. In recent times, the demand for the oleochemicals that are derived from the fatty acids, glycerine, and methyl esters are gaining momentum. The key factors like green chemicals, environmentally friendly, bio-degradable, and significant others have propelled the overall growth of the Oleo Chemicals industry. Also, the increasing price of petrochemicals is presenting lucrative opportunities for the overall growth of the Oleochemicals industry. 
The manufacturers are involved in the production of bio-surfactants, bio-lubricants, and bio-polymers in the place of petrochemicals and thereby presenting favorable conditions for the growth of the oleochemicals industry. The changing attitude of the consumers towards organic products in cosmetics, baby care products, and food additives are further propelling the overall growth of the oleochemicals industry.
Emery Oleochemicals introduced its new LOXIOL metal filament products for additive manufacturing at Formnext 2022. Mery Oleochemicals of Düsseldorf, Germany, introduced its innovative LOXIOL metal filament products for additive manufacturing at Formnext 2022. The LOXIOL metal filament products increase the company's options in the AM market for Fused Filament Fabrication (FFF), which is a Material Extrusion (MEX) technique.
COVID 19 Analysis:
The COVID19 had significantly brought in challenges for the growth of the Oleochemicals industry. The government regulations and norms in restricting the logistics and other business processes have reduced the production of basic chemicals, feedstocks, and other crucial activities. Such factors have directly affected the Oleochemicals market growth. Similarly, the declining industrial operations in the manufacturing hubs also affected the growth of the oleochemicals industry. For instance, China had reduced over 14% of its manufacturing activities due to the pandemic. Also, the key end-user industries of oleochemicals have reduced their operations and production rates. Such factors have significantly affected the growth of the oleochemicals industry.
Market dynamics
Market drivers
The increasing market value of glycerine in recent times, because of its purity and the potential users who are completely reliant on the purity of the glycerine is boosting the overall growth of the oleochemicals industry.
The increasing demand for personal care products, emulsions, and the inclination towards organic products and cosmetics are considered as the major drivers of Oleochemicals market growth. Moreover, the customer awareness towards the product and the necessity to acquire approval from health and safety regulatory bodies are further propelling the overall growth of the oleochemicals market growth.
Market opportunities
The environmental regulations imposed on the manufacturers towards the usage of non-renewable resources had paved the way for the growth of the oleochemicals industry. The increasing price of conventional petroleum-based products is further propelling the overall growth of the oleochemicals industry in recent times.
The specialty esters are growing in demand across several end-user industries because of the intensive utilization in cosmetics, rubber, and pharmaceutical applications. The increasing demand for cosmetics in recent times, owing to the increasing influence from social media and higher disposable income are presenting lucrative opportunities for the overall growth of the Oleochemicals industry during the forecast period.
Market restraints
Glycerin is considered the major oleochemicals that are used in soap making and detergent making. However, the pre-treatment processes involved in manufacturing processes are likely to emit Volatile organic compounds, and the stringent regulations imposed in some countries are expected to restrict the overall growth of the oleochemical industry.
The increasing competition in the major end-user industries and the marketing strategies are also considered as the major restraints of oleochemicals market growth.
Market challenges
The raw materials costs are continuously varied according to availability and production. Moreover, some of the countries don’t possess sufficient raw materials required for the production of Oleochemicals. Such factors are considered as the major challenge for the overall growth of the Oleo Chemicals industry
The high competition from the petrochemical-based chemicals and the increasing utilization of the petrochemical products due to the attitude of the manufacturers are considered as the major challenge for oleochemicals market growth.
Cumulative growth analysis
The market value of Oleochemicals was at USD 20.97 billion in the year 2021 and it is expected to surpass the market value of over USD 34.90 billion by the year 2028 while registering a CAGR of 7.5% during the forecast period. The primary application of Oleochemicals is to make soaps and personal care products. Over 55% of the Oleo Chemicals are used in the manufacturing of soaps and detergents. On the other hand, they are used in producing lubricants, solvents, and bioplastics as well. These bioplastics are derived from vegetable fats and oils, recycled food waste and therefore they are highly preferred in plastic-free countries as well. The potential advantages of the bioplastics such as negative environmental impacts and lesser greenhouse gases are released. Such factors are impacting the oleochemicals market growth.
The specialty esters are intensively used in personal care and cosmetics, which come under oleochemicals. The increasing demand for personal care and cosmetics across the developed countries is propelling the overall growth of the oleochemicals industry. The manufacturers are gaining awareness regarding the negative environmental impacts and cost-effectiveness of the oleochemicals and thereby intensively utilizing them in their applications. Moreover, several manufacturers present in the Asia-pacific region are showcasing the highest growth rate for oleochemicals as the raw materials are available abundantly and they are developing new applications as well.
Value chain analysis:
The oleochemicals are primarily used in pharmaceutical and personal care products. Since both these industries are showcasing higher demand due to emergencies they are significantly impacting the oleochemicals market growth. Other than these applications, they are used in the manufacturing of soaps, detergents, cosmetics, the food industry, and medicines. Also, several parts of the Asia-pacific region possess raw materials abundantly and thereby promoting the overall growth of the oleochemicals industry. The manufacturers are also looking for green chemicals which don’t emit greenhouse gases and don’t impact environmental stability in any measure. Such factors are presenting lucrative opportunities for oleochemicals market growth.
Petrochemicals are conventionally utilized for cosmetic manufacturing; however, the costs included in producing petrochemicals are higher. Therefore the manufacturers are inclined towards eco-friendly products.
Segment overview:
Based on Type:
- Fatty acid
- Fatty alcohol
- Glycerin
- Others
Based on Forms:
- Liquid
- Solid
- Flakes
- Pellets
- Beads
- Others
Based on Applications:
- Pharmaceutical & personal care
- Food & Beverages
- Soaps & Detergents
- Polymers
- Others
Based on Feedstock:
- Palm
- Soy
- Rapeseed
- Sunflower
- Tallow
- Palm Kennel
- Coconut
- Others
The Global Oleochemicals Market Share by Application, (2016) (%):
Regional analysis:
The Asia-pacific region is expected to have the highest market share during the forecast period, as they possess a huge amount of raw materials and potential manufacturers that constantly developing new applications for the oleochemicals. There are several Oleo chemical industries built across the region and due to their establishment and experience, they have provided a tiff in the competition with the US and Europe. Some of the leading market players like Henkel, Unilever, Petrofina were involved in promoting the oleochemicals industry. The Asia-pacific region had already registered 40% revenue in the Oleochemicals industry.
On the other hand, North America is experiencing significant growth due to the increasing awareness created by the government towards the usage of chemical additives in personal care and cosmetics. Moreover, a huge population across the region are preferring vegan products in recent times. Such factors are presenting lucrative opportunities for oleochemicals market growth.
Moreover, the regulations imposed across North America regarding the usage of harsh chemicals in personal care and cosmetics have propelled the overall growth of the oleochemicals industry. For instance, usage of methylene chloride, Bithionol, and significant chemicals are banned from being used in personal care products. Similarly, a huge customer base is driven towards veganism and prefers completely plant-based products. Such factors have propelled the overall growth of the oleochemicals industry across North America.
Competitive landscape:
- Cargill, Inc.
- SABIC
- Kuala Lumpur Kepong Berhad
- BASF SE
- Oleon N.V.
- IOI Group Berhad
- Wilmar International
- Kao Corp.
Recent developments:
In June 2023, Wilmar International announced the expansion of its oleochemicals production capacity in Singapore. The expansion is expected to be completed in 2024 and will increase the company's oleochemicals production capacity by 50%.
In August 2023, BASF announced the launch of a new line of sustainable oleochemicals. The new line is made from renewable feedstocks and is designed to meet the growing demand for sustainable products.
Segmentation Table
Based on Type
- Fatty acid
- Fatty alcohol
- Glycerin
- Others
Based on Forms
- Liquid
- Solid
- Flakes
- Pellets
- Beads
- Others
Based on Applications
- Pharmaceutical & personal care
- Food & Beverages
- Soaps & Detergents
- Polymers
- Others
Based on Feedstock
- Palm
- Soy
- Rapeseed
- Sunflower
- Tallow
- Palm Kennel
- Coconut
- Others
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