Analysis: Detergent sector faces slow growth, envt problems

02 August 2002 18:42  [Source: ICIS news]

LONDON (CNI)--Detergent producers and their surfactants suppliers are currently facing slow growth in mature markets and increasing environmental challenges, according to a report by market consultants Frost & Sullivan.

The household detergents market is valued at $30bn (Euro30.3bn) in the three mature markets of US and Canada, Western Europe (European Union (EU) plus Scandinavia) and Japan combined, while the personal care sector is worth more than $50bn. All four kinds of surfactants - anionics, nonionics, cationics, and amphoterics - find their way into these two sectors.

The report concluded that for detergent producers, growth has been slow in the three mature markets due to slow or zero population expansion and product saturation.

As a result, many of the best opportunities for growth are in regions where there is population growth or markets that are in a formative stage.

Thus, the developing world - including South Asia, Latin America, Eastern Europe and China - exerts a strong pull since it offers much greater opportunities for mainstream materials from the supplying industries, and a rich, untapped potential for detergent and personal care companies.

While these developing markets may not be ready for products of quite the same level of sophistication as the west, the report said there is a 'vast heritage of knowledge' about what products are suited to these markets. Essentially, this means many of the formulations already developed in past years, it explained.

Frost & Sullivan said globalisation should lead to more homogenised product offerings in the detergents sector. Just as automobile manufacturers think of the world car as their ideal concept, detergent producers will be tempted to go in the same direction, as regional market differences fade.

For instance, major soap manufacturers already own and exploit world brands although formulations tend to vary quite a bit, according to the report.

The growth of world brands, however, opens up the possibility that new players can find niches in lucrative markets if the major market players are not vigilant, it noted.

Apart from economic factors, environmental issues continue to draw a lot of attention, especially in the case of phosphates and alkylphenol products. The report noted signs that some detergent companies are becoming weary of the battle against legislation and are moving toward a commitment to green products by favouring the use of renewable resources as their primary source.

This bodes for greater dependence on consistent crop yields and other variables, which are, sadly, as imponderable from a planning point of view as energy prices, the survey concluded.

Energy issues also remain significant, according to the report, which pointed out that crude oil prices of have seesawed over the past five years and remain intrinsically unpredictable.

Frost & Sullivan also said there is a second kind of energy problem: a feeling, especially strong in Europe, that greater attention needs to be given to the concept of global warming. Among other effects, global warming is going to make energy conservation and energy-efficiency a much more central part of public policy making, and something that will attract popular support.

For the detergents business, this means that products will need to evolve to meet developing requirements such as diminished water usage, better use of energy in machines, and lower wash temperatures to minimise thermal requirements, the report concluded.

The Role of Surfactants and Their Markets in Household Detergents and Personal Care Products in North America, Europe, and Japan (Report D478) is available from Frost & Sullivan, 4100 Chancellor Court, Oxford Business Park, Oxford, OX4 2GX, UK. Sales contact: Bill Stringer, Tel: +44 (0) 1865 398651, E-mail:




By: Russell Ong
+44 208 652 3214

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