Cleaning up

01 December 1997 00:00  [Source: APC]

Growing demand in the Asia-Pacific for soaps and detergents is pushing up demand for oleochemicals, a major ingredient in their production, reports Lucia Carpio.

As standards of living around the world rise, the demand for soaps, detergents and other cleaning products also rises, which in turn has increased the demand for oleochemicals. The Asia-Pacific is playing a major role in this transition as it is both rich in the raw materials of which oleochemicals are made and is also a major source of the increased demand for their end products.


A key influence on the soaps market is the demand for oleochemicals - the so-called 'natural' ingredient. Even though the market for oleochemicals in western countries is considered to be relatively mature, it has been forced to undergo changes over recent years to encompass new consumer demands, especially concerning the long-term environmental performance of the chemical ingredients.

Oleochemicals are produced by the splitting of oils and gas using processes such as fractionation, hydrogenation and interesterification. Basic oleochemicals traditionally have included fatty alcohols and fatty amines, fatty acid methyl esters and fatty acids.

Within the oleochemical sector, the principal oils used are palm oil, palm kernel, coconut and tallow - all found in abundance in countries such as Malaysia, Indonesia and the Philippines. Palm oil has been well established for several years in consumer products, both as a frying product and as an ingredient in margarine, and consumption has increased significantly over the decade.

The market for chemical ingredients for oleochemicals is dominated by fatty acids. Mostly - though not exclusively - the range of fatty acids comprises straight chain acids, with an even number of carbon atoms. The surfactants industry continues to be the greatest end-use area of application either directly or indirectly for most of the different oleochemicals.

In terms of suppliers, the market for basic oleochemicals has many large players, including Netherlands-based Unichema - now part of ICI's speciality chemicals business following its purchase from Unilever earlier this year - and Henkel of Germany.

Henkel is a key player, producing some10 000 products and has six distinct product sectors worldwide. In terms of chemical products, the company produces fatty acids, glycerine and fatty acid derivatives, as well as fatty alcohols and their derivatives, among others.

Unichema, with its headquarters at Gouda, the Netherlands, produces more than 500 000 tonne/year of oleochemicals, from natural oils and fats with vegetable or animal sources, at sites in nine countries throughout the world, including the Netherlands, the UK, Spain, Italy and Germany, North America, Australia and Malaysia. The company is active in several market sectors including fatty acids and glycerine, soap bases, lubricants and base stocks, personal care ingredients (such as cosmetic esters) and polymer chemicals and catalysts.

A relatively new sector is pharmaceuticals, where Unichema has developed tailor-made excipients for more efficient medicines delivery and, in polymer chemicals, the development of a new polyester polyol that is compatible with foam blowing agents such as water and pentane, eliminating the need for CFCs. Unichema's total sales last year amounted to £500m ($849m), of which some 24% was in Asia. 'Asia is our fastest growing market, with sales increasing by 8-9%/year,' said Unichema's group vice president, Angel Diaz De Leon.

The Klang site in Malaysia is the most recent of Unichema's facilities and specialises in the manufacture of soap noodles, fatty acids and esters. The largest markets in the region are Japan and, increasingly, China. In terms of growth opportunities over the coming decade, De Leon highlights China and the next generation of tiger economies, such as Indonesia, the Philippines, Vietnam and Bangladesh as likely to emerge as the fastest growing markets. The major oleochemical manufacturers are looking to the Asia-Pacific as a growing source of business.

'Consumer products have benefited greatly from the economic growth taking place in the developing regions as consumers move up to higher quality cleaning and personal care products as a result of increased purchasing power,' says a recent research report on cleaning product usage undertaken by Colin Houston & Associates of New York.

It is positive news for producers worldwide who supply the raw materials and the finished products to the cleaning markets of the developing regions.

'More product is likely to be exported in the future as these [developing] economies establish an infrastructure,' says analyst Dipen Kapasi in a research study by Frost & Sullivan on the US detergent and cleaning chemicals market. 'The trend indicates the likelihood of new geographic markets for cleaning chemicals, which will impact the world economy as a whole.'The cleaning chemicals market consists of three groups: household, industrial, and institutional. While the household market is mature, both the industrial and institutional markets show signs of strength with high profit margins in addition to rapid growth.

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