C&T injects growth in silicones

05 September 2005 00:01  [Source: ICB Americas]

DEMAND FOR silicones in cosmetics and toiletries (C&T) is benefiting from new applications as well as increased consumption in emerging markets. Major producers have increased their investment in the business as a growing consumer appetite for high-end products stimulates greater use of silicones in skin care, cosmetics, sun-care lotions, shampoo and other hair products.

Last year, Wacker-Chemie GmbH invested €100 million in its silicones division Wacker Silicones. Expenditures include the expansion of its Nunchritz, Germany, facility into a center of excellence for silicone production; expansion of silicone emulsion production capacity at Wacker Metroark Chemicals in Calcutta, India; and a new silicone plant brought on stream in Shanghai, China, in early 2004.

For GE Advanced Materials, silicones for C&T are a major area of focus and innovation, says Beatriz Blanco, global marketing manager, home and personal care. Last year, the company invested in a new personal care center of excellence in Tarrytown, N.Y., and a new applications laboratory in Shanghai, China. GE also enhanced its synthesis capabilities in Bangalore, India, this year, and recently increased capacity for Tospearl silicone powder in Japan and emulsion capacity in the US.

“Silicones are changing the market because they give formulators the opportunity to incorporate consumer-perceivable benefits to their new products,” adds Blanco. “The main challenge is to predict consumer needs far in advance so that we can launch new products that will address those needs.” GE says it plans to launch new products this year and in 2006.

Dow Corning identifies hair colorants and wipes as key growth areas for its silicones business in C&T. The retail market for hair colorant products is valued at $9 billion, growing at 3 to 5 percent per year, according to Dow Corning. Despite tapering growth, the segment remained the most dynamic in the $43 billion hair care products industry.

“There has been an explosion of color-care-related hair care themes and products. Many shampoos, conditioners and treatments are now specifically targeted for colored hair,” says Erik Gyzen, hair care segment leader at Dow Corning. “Silicones are often used in hair colorant products, as they are easy to incorporate and do not affect critical formulation parameters such as pH and viscosity.”

Silicone demand is also expected to gain in the thriving wipes market. Dow Corning placed global demand for wipes, both wet and dry, at roughly $3 billion in 2002.

“Wet wipes are increasing their presence in the personal care market and are also showing utility in hair care and in the delivery of active ingredients,” notes Myriam Delvaux, skin care segment leader at Dow Corning. “As the wipe market matures, formulations will become more sophisticated and value-added wipes will be more attractive to manufacturers looking to differentiate their products.”

The company is also targeting potential high-growth areas such as Eastern Europe, Asia and Latin America. Dow Corning recently completed its application center in Shanghai, China, expanding the company’s product development and analytical testing in Asia.

Meanwhile, Rhodia is expanding its resources on silicones for C&T through increased R&D and marketing efforts, as well as boosting its raw material capacity for silicones. The company increased its monomer capacity by more than 60 percent and has upcoming joint venture projects with China National Blue Star Corp. for the production of methylchlorosilane. Both companies are also looking at a global strategic alliance focusing on combining their upstream and downstream silicone activities.

Within the C&T market, Rhodia says it is looking at the skin care sector as a new area of growth, particularly sun protection and anti-aging. Rhodia placed global growth for silicones in personal care at 10 to 12 percent.

“The skin care and skin protection markets are showing faster growth, particularly for silicones, than other personal care applications,” says Ronald Hanks, business director, Rhodia Silicones North America. “We are looking into expanding our product offering and R&D efforts in the area of skin care by capitalizing our strengths in gel technology, functionalized fluids and resins. These initiatives are still in early R&D stages but are an important part of our growth strategy.”

Competition within the silicones industry remains high, as R&D and intellectual property activities surge across the C&T value chain. With their unique benefits, silicones are regarded as crucial modern materials for C&T with the largest potential for future innovation, notes Martin Kropfgans of Centre Européen des Silicones (CES), a nonprofit trade organization representing major silicone producers in Europe.

“Silicones continue to play a major role in the development of innovative cosmetic formulations with most of the innovation coming from synergistic effects—either by combination of silicone with other raw materials or on a molecular level,” he adds. “As a multifunctional ingredient, silicone will address consumer needs such as anti-aging, thermal protection, sensory enhancement, color retention, natural look, SPF-boosting, and hair volume.”

CES placed the global market for silicones at 2 million tons valued at €8 billion in 2002. Silicone fluids account for 18 percent of total silicone demand in personal care. Total global sales of silicones in personal care are estimated at between 21,000 and 23,000 tons per year.

In the US, demand for silicones in C&T is forecast to grow 8 percent per year to $459 million in 2008, according to Freedonia Group. Most of the advance is being driven by increasing demand in skin care and hair care products. Freedonia placed silicone demand in C&T at $315 million in 2003, with emollients and conditioning agents accounting for most of the applications. By 2013, overall demand in C&T is projected to increase to $653 million.

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