Oleochemicals Market: Growing Demand for Oleochemicals in Consumer Products to Create New Revenue

ALBANY, N.Y. - Oct. 5, 2016 - PRLog -- The global oleochemicals market demonstrates a high degree of competition between participants. The presence of a large number of players points towards a fragmented competitive landscape, says Transparency Market Research (TMR) in a new report. The top three players, namely, BASF, Oleon, and KLK Malaysia could hold only 47% of the overall market in 2014. The market is highly innovation-driven with the development of applications for customized solutions being an absolute necessity. Participants are constantly focusing on introducing new products for emergent applications. However, mergers, acquisitions, and partnerships are likely to surface as the most preferred strategy among them in the near future.

TMR estimates the global market for oleochemicals, which stood at US$28.3 bn in 2015, to expand at a CAGR of 5.90% during the period from and hold an opportunity worth US$33.8 bn by 2018. In terms of volume, the market will reach 18,563.7 kilo tons by the end of the forecast period. Fatty acids are expected to remain the key contributor to this market in the forthcoming years with revenue increasing to US$22.1 bn by 2018.

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Asia Pacific to Remain Leading Consumer of Oleochemicals

In the report, researchers have also studied the worldwide market for oleochemicals on the basis of its geographical segmentation. According to the study, the global market is spread across Europe, North America, Asia Pacific, and the Rest of the World. Asia Pacific, among these, has acquired the leading position and is closely followed by Europe.

The growing demand for consumer products, owing to the presence of a large population base, is the key factor that has been fueling the demand for oleochemicals in Asia Pacific. Analysts expect the trend to remain so and the regional market to generate US$12.8 bn in revenue by 2018. Other geographical segments are also anticipated to witness healthy growth in the coming years, notes the study.

Eco-friendly, Non-toxic Nature of Oleochemicals to Fuel Application in Consumer Products

Oleochemicals are an impotent component of a number of daily use consumer products, such as detergents, shampoos, bath gels, personal care products, antioxidants, cosmetics, leather auxiliaries, wetting agents, and textiles. "The eco-friendly, non-toxic nature of oleochemicals, together with the cost-benefits they offer, is the key driver behind their escalating usage in the manufacturing of products utilized in day-to-day life," says the author of this study.

The high-quality lubrication that oleochemicals offer is also a prime factor that has fueled their application significantly across the world. Over the coming years, the wide availability of raw materials and the rising trend of green chemicals are likely to benefit the manufacturers of oleochemicals substantially.

Volatility in Feedstock Prices to Impact Production of Oleochemicals Negatively

While the market looks thriving currently, several factors, such as volatility in feedstock prices, may obstruct its growth trajectory over the next few years. Several feedstock, such as vegetable and seed oils (palm oil, castor oil, and soy oil), are the key raw materials used to produce oleochemicals and account for nearly 35–50% of the overall production cost.

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Due to escalating demand in animal feed, coupled with the non-uniformity in trade regulations in various emerging economies leading to a tight supply situation, the prices of feedstock have surged considerably in the recent times. These price fluctuations are having a direct impact on the production of oleochemicals, resulting in a supply crunch, which in turn, is reflecting negatively on the overall sales of oleochemicals, states the report.