Market Trends of Oleochemicals Industry
Soap and Detergents to Dominate the Market
- The United States is the world's largest soap producer and consumer. Other leading soap producers include Germany, Malaysia, China, and the United Kingdom. China is the largest exporter of soaps globally, value reaching USD 740.99 million.
- In Asia, Malaysia is one of the largest producers and exporters of soaps. According to Statistics Malaysia, soap production in the country amounted to approximately 15.47 thousand metric tons in 2022, a decrease from 16.92 thousand metric tons in 2021. Whereas in 2019, the country produced 45.5 thousand metric tons of soap. The rise in prices of palm stearin due to the weakening of the Malaysia ringgit and supply shortages caused oleochemical manufacturers, who use the ingredient as a feedstock to make soap, to face tightening margins and slower demand for their products.
- Moreover, in 2022, bar soap production in Mexico amounted to approximately 22.87 million units. The country produced 22.67 million units of soap in 2021, and 21.71 million units in 2020. Mexico is benefiting from private investment fueled by nearshoring, the trend of moving production to North America and away from Asia. Moreover, the country is also witnessing an increase in foreign investment for the manufacturing industries.
- The European market for soap peaked after the outbreak of the COVID-19 pandemic in 2020 and represented around 40% of the global soap market. European consumers are increasingly turning to at-home spa and yoga practices to boost their wellness. According to a 2021 global Young Living survey, 48% of respondents report that they are making wellness and self-care a top priority. 53% have developed new wellness habits during the pandemic, including at-home spa experiences. As the spa experience is connected to relaxation and healing, soaps and related items for this segment often come in muted, natural colors and branding. The consumer base for wellness is becoming more and more broad, thus driving the growth of soap and detergent market.
- The detergents industry is an important sub-sector of the European chemicals industry, with presence of large number of detergent manufacturer, especially in Germany, thus offering a customer base for oleochemical industry. According to the A.I.S.E. Activity & Sustainability Report 2022, Europe's detergents and maintenance products industry had an estimated market value of EUR 39.8 billion (~USD 44.67 billion). The Gross value-added contribution to the EU economy through the value chain was EUR 24.6 billion (~USD 27.61 billion).
- The detergent manufacturing industry, for both, consumer and professional products, involves around 700 separate facilities throughout Europe, of which 85% are operated by SMEs. Therefore, the presence of such large number of facilities engaged in the production of detergents also offers a huge customer base for oleochemicals market in the region.
- All such trends and factors have been driving the usage and demand of soap and detergents, and in turn is expected to influence the demand for oleochemical positively during the forecast period.
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Asia-Pacific to Dominate the Market
- Asia-Pacific region is expected to account for the largest oleochemicals market during the forecast period due to the increased production capacity and expansion of personal care, pharmaceuticals, and soap industries in countries like China, India, and Japan.
- According to the National Bureau of Statistics of China, in April 2023, cosmetics retail sales in China amounted to around CNY 27.51 billion (~USD 3.85 billion), higher than the same period of the previous year, which was CNY 21.38 billion (~USD 3 billion). Over the last decade, the cosmetics market in China has developed rapidly. In 2022, the retail sales value of cosmetic products reached CNY 393.6 billion (~USD 55.14 billion).
- Consumers in China are becoming conscious of their external beauty and making greater use of cosmetics. They are increasingly incorporating cosmetics products in their daily routine, attributed to the rising concern for beauty and changing lifestyles, which is fueling the market demand for cosmetics products in the country.
- According to Invest India, the personal care and hygiene market reached USD 13.74 billion in FY2022 and is expected to reach USD 15.7 billion by FY2026. India's biggest export destinations in this sector are the United States, United Arab Emirates, China, and Bangladesh. India's imports amounted to USD 1.7 billion for FY2022, while exports value were recorded to be USD 2.9 billion.
- In July 2022, Hindustan Unilever Limited (HUL) announced its plan to invest INR 700 crore (~USD 85.19 million) by 2025 in its new facility in Uttar Pradesh's Sumerpur, which has a spray-dried detergent powder plant and a distribution center. Moreover, in May 2022, Proctor & Gamble (P&G) set up its first liquid detergent manufacturing facility in the outskirts of Hyderabad in India, which will attract an investment of INR 200 crore (~USD 24.34 million).
- South Korea is one of the fastest-changing beauty markets, introducing industry-leading innovations and globally setting trends. The current trend is the rise of do-it-yourself (DIY) beauty care. As a result, DIY hair coloring, nail care, and care in other K-beauty categories are fetching new customers within the country. The skincare segment has grown significantly in the South Korean beauty and personal care market.
- All the above-mentioned factors will likely fuel the growth of Asia-Pacific's oleochemicals market over the forecast time frame.
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