Oleochemicals Market Size, Share & Industry Analysis, By Type (Fatty Acids, Fatty Alcohols, Methyl Esters, and Glycerin), By Application (Food & Beverages, Chemicals, Animal Feed, and Others), and Regional Forecast, 2024-2032

The global oleochemicals market size was valued at USD 37.88 billion in 2023 and is projected to grow from USD 40.37 billion in 2024 to USD 65.38 billion by 2032, exhibiting a CAGR of 6.3% during the forecast period. Asia Pacific dominated the oleochemicals market with a market share of 48.86% in 2023. Moreover, the oleochemicals in the U.S. is projected to grow significantly, reaching an estimated value of USD 10.24 billion by 2032, driven by its increasing adoption in textile industry as emulsifiers, antistatic agents, and microbial agents.

Oleochemicals are chemicals produced by chemical and enzymatic reactions from vegetable oils and animal fats. They are analogous to petrochemicals products. The market is set to experience high growth rate due to increased demand from the food and chemical industries. Increasing preference for sustainable fuels is expected to surge product demand during the forecast period.

The COVID-19 pandemic significantly affected every sector’s demand and supply chains. The impact of the viral infection led to the enforcement of various government norms and regulations and prompted them to action. These rules included lockdowns, halt in manufacturing activities, social distancing, and transportation restrictions. Many countries imposed a lockdown and transportation was halted since the spread of coronavirus in late 2019. Due to this, the production of biodiesel was recorded to fall, further impacting the production of glycerin, influencing product usage in oral care, personal care, and food products.

However, manufacturers recorded a return to their full production and operational activities. According to the Malaysian Palm Oil Council (MPOC), the demand has been high after COVID-19. The escalated product adoption was associated with the increased demand for sanitizers, disinfectants, and cleaning products.

Oleochemicals Market Trends

Increasing Demand for Biofuels Offers Market Growth Opportunities

Various organizations and departments of government have closely observed the fuel industry. Fossil fuels account for the major share in the consumption of fuel and have always led to environmental and health issues. According to the research carried out by Our World in Data, 135,807 terawatts-hours of energy were consumed in 2019, which was sourced from fossil fuels like coal, gas, and oil. The challenges put forth by global pollution and the depletion of fossil fuels have led the world to serious environmental challenges, including global warming, ozone layer depletion, and pollution.

Hence, consumers are moving toward sustainable and green alternatives such as biofuels. Biodiesel is produced by the transesterification of oil and fats obtained from natural sources. The U.S. biofuels industry produced 2.6 billion gallons of biofuels in 2018. The increasing adoption of sustainable alternatives to petrochemicals products in the food & beverages and feed products and rising technological advancement are anticipated to act as a growth opportunity.

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Oleochemicals Market Growth Factors

Rising Demand from Several End-use Industries to Propel Market Growth

Oleochemicals are projected to experience significant growth by the end of the forecast period. These chemicals are highly employed by various sectors, including personal care, cosmetics, food & beverages, pharmaceuticals, and plastics. These green chemicals are used in hair care and skincare products..

The demand for naturally derived cosmetic products has amplified progressively, with significant growth over the past decade. The cosmetics industry depends on oleochemicals to manufacture safe products for its consumers. For instance, Octyl stearate is a palm derivative that is used as an emollient for lipsticks, chapsticks, and eyeshadow, while polyhexanide is a water-based antibacterial chemical and preservative used in multiple makeup products.

Oleochemicals are also used in personal care products such as hair care and skin care essentials. Glycerine is derived from vegetable fats and is commonly used in moisturizers due to its excellent moisturizing properties. Similarly, AHCOHOL 1618 is a combination of both natural and synthetic sources but is primarily vegetable-based and hypoallergenic. It is often used as a thickening agent in personal care.

Attributed to the high demand for hypoallergenic, non-carcinogenic nature, and chemical-free ingredients from the cosmetics and personal care industry, the market is expected to grow strongly. Moreover, sustainable cosmetics and personal care product manufacturers are driving the use of these products

Additionally, the use of bio-based chemicals in the food industry is another factor driving growth. These chemicals are used in FDA-approved food packaging and as thickening and flow agents. For instance, calcium stearate is used as a food emulsifier and a flow agent in manufacturing candies. Moreover, the demand for bio-based and sustainable chemicals owing to the concerns regarding the detrimental effects of synthetic chemicals on humans and the environment is one of the factors driving the oleochemicals market growth.

Lower Cost and Sustainability of Raw Materials to Boost the Market Growth

Oleochemicals are derived from vegetable and animal feedstock. Waste vegetable oil is a renewable, sustainable, low cost, and low-toxicity of raw materials for production. They are an excellent substitute for petroleum-based chemicals. These chemicals obtained from trans-esterification, epoxidation, and sulfonation of waste vegetable oils are used to manufacture surface active agents (biosurfactants) with extensive petroleum applications.

In addition, these raw materials have remarkable benefits compared to petroleum feedstock as these living feedstocks have high efficiency and productivity. For instance, palm oil is a significant raw material attributed to its low cost, high efficiency, and productivity. Thus, these factors are anticipated to surge the demand for these chemicals during the forecast period.

RESTRAINING FACTORS

VOC Production during Pre-treatment of Glycerin May Hamper the Market Growth

Oleochemical products, such as fatty acids, fatty alcohol, and glycerin, are used in applications ranging from food to cosmetics. However, the production of these chemicals comes with environmental and health issues as Voltaic Organic Compounds (VOC) are released during the glycerin processing. Exposure to VOC can harm human organs, including the throat, eyes, and nose. Additionally, VOC vapors can cause nausea, damage to the liver and kidney, and permanent damage to the central nervous system. Thus, all these factors are expected to hamper market growth.

Oleochemicals Market Segmentation Analysis

By Type Analysis

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Fatty Acids to Hold Dominant Share Owing to its Demand from the Personal Care Industry 

Based on type, the market is categorized into fatty acids, fatty alcohols, methyl esters, and glycerin.

The market is dominated by the fatty acids segment owing to the easy availability of raw materials and growing demand for organic personal care products across the globe. In addition, fatty acids function as surfactants employed in detergents and soaps due to their amphipathic characteristics. Fatty acid is a crucial raw material to produce several downstream derivatives, including elastomers, toiletry, biocides, softeners, and wax for diversified industries. This is anticipated to drive segment growth.

Glycerin is used to create and preserve botanical extracts, such as rosemary and lavender, which are further used in various products as a flavoring agent. The glycerin segment is gaining momentum owing to its increased use in food and industrial applications. Fatty alcohols and methyl esters are expected to exhibit substantial growth owing to increasing product demand from the chemical and detergent industries.

By Application Analysis

Food & Beverages Segment Accounts for Largest Market Share Due to High Product Adoption as an Additive

The market is segmented based on application: food & beverages, chemicals, animal feed, and others.

The food & beverages segment accounted for the largest oleochemicals market share in 2021. Increasing adoption of bio-based thickeners, stabilizers, and other food additives in the food industry is expected to drive segment growth. The chemicals sector is expected to be growing at the fastest CAGR, owing to high demand for green alternatives for petroleum-derived chemicals.

Oleochemicals are also used in the manufacturing of animal nutrition products. They help in the area of processing, enhancing digestibility, providing easy digestible energy source, and antimicrobial activity in animals. This is expected to boost market growth.

REGIONAL INSIGHTS

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Asia Pacific accounted for the highest market value of USD 18.51 billion in 2023, followed by North America and Europe. The majority of Asia Pacific market share is contributed by ASEAN countries and China. The region is a major producer and exporter of oleochemical feedstock as well as its derivatives. This includes fatty alcohols, fatty acid methyl esters, alkyl ethoxylates, glycerol esters alkoxylates, glycerin, specialty esters, and fatty alcohols. The growing awareness amongst people regarding the detrimental effects of the exploitation of fossil fuels and petrochemical resources is one of the major factors driving the market growth.

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North America is expected to show considerable growth by the end of the forecast period, owing to stringent regulations regarding practicing sustainability and the growing demand for plant-based products. Moreover, the growing market for the chemical sector in the U.S. is expected to drive the market in the country.

European countries, including Germany, Italy, France, and the U.K. are practicing sustainability for the last decade owing to the growing awareness in consumers regarding climate change, pollution, and other environmental issues. Increasing emphasis on the efficient use of bio-based resources, including agricultural and animal-based products and waste, is a major factor driving the regional market.

The animal feed segment is growing moderately in Latin America due to the large number of cattle in the region. Countries in the region, such as Brazil and Argentina, are inclined to improve animal nutrition. These chemicals work as antimicrobial agents, processing and digestive aid, and improve animal feed products.

The Middle East & Africa is expected to grow considerably due to the rapidly expanding cosmetics and personal care industry.

List of Key Companies in Oleochemicals Market

Key Companies Focus on Geographical Expansion and Broaden their Market Presence

With a few global players capturing a significant share, the global market is concentrated in nature. BASF, Evonik, Emery Oleochemicals, Twin River Technologies, Cargill Inc., and Croda Industrial Chemicals are some of the key players.

Industry players operate principally based on the product's price and application. To boost their market share and achieve a competitive advantage, several major players are engaged in numerous strategic alliances to promote brand and sales.

LIST OF KEY COMPANIES PROFILED:

• Cargill Inc. (U.S.)


• Kuala Lumpur Kepong Berhad (Malaysia)


• BASF SE (Germany)


• Oleon N.V. (Belgium)


• IOI Group Berhad (Malaysia)


• Wilmar International (Singapore)


• Kao Chemicals (Japan)


• Twin Rivers Technologies (U.S.)


• Croda Industrial Chemicals (U.K.)


• Evonik Industries (Germany)


• Emery Oleochemicals (Malaysia)


• Godrej Industries (India)

KEY INDUSTRY DEVELOPMENTS:

• August 2022 - The Kuala Lumpur Kepong Berhad Group offered a product named DavosLife E3, which can be used in food and nutrition applications. According to Kuala Lumpur Kepong Berhad, the product has wide-reaching, clinically proven health benefits for heart health, liver health, and brain health.


• July 2022 BASF SE offered the first rainforest alliance-certified personal care ingredients based on coconut oil. The company established a renewable supply chain, which will help the company maximize its revenue.


• April 2022 - Oleon N.V. launched the construction of a new plant in Baytown, Texas. The company invested USD 50 million. The purpose of the investment is to establish international expansion.


• September 2020 – Emery Oleochemicals announced the launch of its fatty acid ester product line under the brand name Emery E. These fatty esters offer good color stability, biodegradability, and low odor.


• May 2019- The new plant of PT Apical Kao Chemicals, a joint venture of Kao Corporation and Apical Group Ltd., a producer of fatty acids, was completed. This joint venture resulted in an increase in production capacity and promoted stable supply of oleochemicals.

REPORT COVERAGE

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The research report provides a detailed market analysis and focuses on crucial aspects such as leading companies, applications, and products. The report also offers insights into key oleochemicals market trends and highlights vital industry developments. In addition, the report encompasses various factors that have contributed to the market's growth in recent years.

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