Oleochemicals Market Is Estimated To Witness High Growth Owing To Opportunity To Act As Sustainable Alternatives
Oleochemicals are chemical compounds derived from fats and oils, and widely used for applications like soaps and detergents, lubricants, plastics and polymers, cosmetics, food additives, and others. With inherent properties including biodegradability, renewability and versatile functionality, oleochemicals serve as eco-friendly alternatives to petroleum-based chemicals. The rising environmental concerns have fuelled the demand for sustainable chemicals from various end-use industries.
The global Oleochemicals Market is estimated to be valued at Us$ 24.22 Bn in 2023 and is expected to exhibit a CAGR Of 6.9% over the forecast period 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.
Market Opportunity:
The opportunity to act as sustainable alternatives has been a major market driver for oleochemicals. With growing awareness regarding environmental conservation, companies and consumers are increasingly preferring bio-based and eco-friendly products over petroleum-derived ones. Oleochemicals are 100% renewable and biodegradable, giving them an inherent advantage over conventional chemicals. Their sustainability credentials allow ease of marketing and help address sustainability goals of various industries. The rising demand for sustainable solutions is estimated to drive the oleochemicals market growth over the forecast period. Focus on shifting production lines from petrochemicals to bio-based oleochemicals is expected to create lucrative growth opportunities for market players.
Porter’s Analysis
Threat of new entrants: The oleochemicals market is well-established, with high barriers to entry due to its capital-intensive nature and the dominance of leading players. Existing regulations also discourage new players.
Bargaining power of buyers: Buyers have moderate bargaining power due to the availability of substitutes. However, buyers face high switching costs.
Bargaining power of suppliers: Suppliers of raw materials like palm oil and coconut oil have strong bargaining power due to the consolidated nature of supply.
Threat of new substitutes: New substitutes pose medium threat as switching to alternatives involves costs for product reformulation and new manufacturing processes.
Competitive rivalry: The market is highly competitive due to the presence of major global players. Players compete based on innovations, product quality, and price.
SWOT Analysis
Strength: Fatty acids and fatty esters have wide industrial applications. Growing end-use industries provide opportunities.
Weakness: Fluctuating raw material prices and over-reliance on palm oil exert pressure on margins. Environmental issues related to palm oil cultivation are a concern.
Opportunity: Increasing consumer demand for bio-based and sustainable products offers scope for green chemicals. Shifting focus towards novel applications expands growth prospects.
Threats: Stringent regulations regarding emissions may increase compliance costs. Intense rivalry from existing players and potential entrants weighs on profitability.
Key Takeaways
The Global Oleochemicals Market Demand is expected to witness high growth at a CAGR of 6.9% during the forecast period of 2023-2030. The Asia Pacific region led by China and India captured over 55% share of the global oleochemicals market in 2023 owing to expanding end-use industries and growth of bio-based application segments.
Regional analysis shows that the Asia Pacific region will continue to dominate the global market, with China, India, Indonesia, and Malaysia expected to be the fastest growing regional markets through 2030. Increased local production and global sourcing of sustainable oleochemicals from the region are driving factors for its leadership.
Key players operating in the oleochemicals market are Vantage Specialty Chemicals, Inc., Emery Oleochemicals, Evonik Industries AG, Wilmar International Ltd., Corbion N.V, Cargill, Incorporated, and KLK OLEO. Players are focusing on capacity expansions, new product development, and strategic partnerships for technology access to strengthen their positions in global and regional markets.
Get more insights on this topic :