Oleochemicals is Trending to Gain Eminence in the Specialty Chemicals Market.

Escalating demand for bio-based products and growing need for sustainable solutions along with changes in regulatory framework has increased the influence of oleochemicals in different segments of chemical industry. Novel advances in this industry segment have given rise to newer applications in segments like polymers, lubricants and bio-surfactants which offer significant opportunities for companies to establish their presence in the long run. Earlier, oleochemicals have been used for applications such as surfactants, personal care, soaps & detergents. However, various new Applications of Oleochemicals such as bio lubricants, biopolymers, and bio surfactants are emerging as replacements of petroleum based products creating exciting growth opportunities to the existing players.

Growing concerns towards health and consequently increasing life expectancy, propels the consumers across the world to demand for products based on natural sources, while making this a natural trend across geographies. In order to meet the burgeoning demand from various end user segments, there has been a considerable amount research and development done in this field and the outcome is the emergence of new applications. Chemical companies are also increasingly committed to sustainable development as part of responsible initiatives which are further driving requirements for such products.

However, the upcoming years will bring ample opportunities for companies focusing on lubricants, polymers, and surfactants wherein the companies can explore diversification of their product portfolio based on oleochemicals. The ultimate advantage of such diversification is that the companies would not only continue to serve their core businesses but also significantly lower their portfolio risk and their carbon footprint. No negating the fact that petroleum based lubricants has been leading the industry since decades. However, these do not readily degrade and hence pose a dreadful peril to the environment. All these synthetic materials once used, challenges the very act of disposing them, which is the major concern as the cost associated with disposing these materials is way too high. This is one of the main reasons why companies would look for an alternative in the manufacturing of lubricants. Similar case is with the production of bio based surfactants which would make the life of consumers much easy.

The production of these bio based applications using oleochemicals has paved way across disparate regions across the world. However, Asia which is not only a major produces but also a major consumer of oleochemicals and related products, today accounts for 68% of the world consumption and 60% of world production of oleochemicals. Some of the major producers of basic oleochemicals like fatty acids and fatty alcohols are Malaysia and Indonesia, which have recently attracted investments from almost all major global companies such as Emery Oleo, Wilmar, BASF and many others. Asia in the recent past has emerged as one of the agile players in the industry by beating off the developed regions like USA, Europe, which used to be the hub for the production of oleochemicals a decade back. Today the majority of installed capacities are in Asia and new capacities are also being added in this region. Large captive consumption and availability of key raw materials such as palm oil and palm kernel oil has been a key reason behind the industry’s shift to Asia.

Oleochemicals based products offer a significant diversification opportunity for chemical companies. Hence, the companies with strong value chain and the ability to spot the trend first to avail the opportunity would benefit significantly in the long run.