Published On: March 2018
How the present scenario looks like?
Ethylene oxide and fatty alcohol are the prominent raw materials used in ethoxylates production. Raw material prices contribute to around 90% of the total production cost. Owing to volatile ethylene oxide prices and inconsistency in the supply, leading manufacturers are focusing on integrating their business through addition of onsite ethoxylation facility. Relatively smaller manufacturers are facing a challenge of low profit margin, owing to their inability to procure consistent low priced ethylene oxide supply. Currently, ethoxylates prices are augmented by increasing ethylene oxide prices. As raw material prices hike majorly affects the ethoxylates prices, ethoxylates prices are prone to fluctuations. This has affected the global ethoxylates market demand. This decline in demand is balanced by growing cosmetics & personal care, paints & coatings, pharmaceutical and other prominent end user industries. In addition to this, growing industrial output of household and industrial & institutional cleaning industries is fueling the market growth. A large proportion of the global ethoxylates volume is directed to household detergents and their transformation into fatty alcohol ether sulphates to be used in household detergents or in personal care. In mature economies, formulations have evolved from soap/soap powders into liquids and compact powders, resulting in a change in the formulations as well as the consumption patterns. Ethoxylates are used widely in industrial applications due to high water solubility, good formulation, low aquatic toxicity, and excellent wetting ability.
Where is the business opportunity?
Growing disposable income along with the increasing penetration of organized retail in the developing countries is driving the global textile apparel consumption. Alcohol ethoxylates are prominently used as surfactants in the textile bleaching process. Growing textile consumption will boost the use of ethoxylates in the textile industry. Textile consumption is mainly growing in China, India, and Brazil. This will create additional investment opportunity for the ethoxylates manufacturers
Moreover, growing population across the globe, increasing food consumption, and increasing disposable income is driving the global food production. This is more profound in the developing economies. With increasing food production, use of agricultural sprays is growing, which in turn driving use of ethoxylates as a surfactant in agriculture sprays. Agriculture industry is a relatively niche application of ethoxylates. However, faster penetration of agricultural sprays in the developing markets will create significant opportunity for the ethoxylates manufacturers.
Household and personal care is the largest end-use market for ethoxylates accounting for a major share in the overall ethoxylates consumption. Growing disposable income, growing concerns of personal hygiene and beautification is driving the personal care products demand in growing Asia-Pacific and Middle East & Africa markets. Asia represents some of the most lucrative country level markets for personal care & cosmetics. Comprising over 20% of the U.S. global exports in the sector, the Asian countries offer the industry over 3 billion potential consumers in the fastest growing global markets. The countries included in the Asia Personal Care and Cosmetics Industry provide access to some of the highest potential future markets including the growing mid-income populace in countries spanning from Indonesia and Vietnam to Malaysia. Conventionally, personal care products are being majorly used by women, moreover, introduction of cosmetics products for men grooming has created additional demand in the global market. Demographic factors such as increasing youth population has boosted the personal care demand in South East Asia and some part of the Middle East & Africa.
What should be the business strategy?
Apart from catering the major markets namely, household and personal care, industrial & institutional cleaning, and pharmaceuticals, manufacturers need to focus on relatively small and growing end-use markets such as textile, and agriculture. Such applications consume a high concentration of ethoxylate products in few of their applications. Development of application specific ethoxylate products can traction the demand from such application.
Ethoxylates sales are mainly affected by the fluctuating raw material cost due to high dependability on petroleum based raw materials. Ethylene oxide is a prominent raw material used for ethoxylates production. In line with global trend of sustainability in chemical industry, ethoxylates manufacturers should focus more on incorporating 100% bio-based products in their portfolio. More number of manufacturers should focus on including bio based ethylene oxide to produce sustainable ethoxylates products.
So, what may restrain the Ethoxylates Market?
Ethoxylates are highly toxic and thus are subjected to stringent regulatory framework from various government authorities. For instance, standards for protection of aquatic life and potable water supplies has been recently developed for alkylphenols, nonylphenols, and octylphenols. The European Commission directives on the properties exhibited by detergents is particularly pertinent to the biodegradability of ethoxylates. Such stringent regulations may restrain the global ethoxylates market. Apart from this, strong competition from alternative low cost surfactant such as LAS (Lauryl Alkyl Sulfonoate) is anticipated to be a significant impediment in the global ethoxylates market.
Recent Trends in Ethoxylates
Increasing investments in bio based ethoxylates product development is a prominent trend prevailing in the global ethoxylates market. High biodegradability and low toxicity of bio-based surfactants coupled with regulatory compliance which restricts the rising use of petroleum based (synthetic surfactants), are the key factors promoting the development of bio-based surfactants