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South African Market for Bio-renewable Chemicals
Frost & Sullivan, March 2010, Pages: 120
This research service provides in-depth analyses on the South African market for bio-renewable chemicals. It also quantifies and forecasts the total bio-renewable chemicals industry in the country and the contribution from the various market segments. The research service also quantifies and forecasts the revenue contribution of each market segment (including succinic acid, lactic acid, and 1,3 propanediol) towards the total bio-renewable chemicals industry from 2009 to 2016. It provides insight into the key challenges, market drivers, and restraints and provides a competitor analysis that describes the distribution channel and the key distributors plus their representative brands.
This Frost & Sullivan research service titled South African Market for Bio-renewable Chemicals provides an analysis of the total market, as well as an analysis of all the product segments. Strategic recommendations are included for industry participants, as well as market forecasts for this industry. In this research, Frost & Sullivan's expert analysts thoroughly examine the following products such as glycerol, lactic acid, succinic acid, 1,3 propanediol.
This analysis is available through our Chemicals & Materials Growth Partnership Services programme. With continuous access to intelligence and resources from all seven perspectives of the Complex Business Universe, the Growth Partnership Services programme ensures that you and your Growth Team™ are able to maintain a 360 Degree Perspective of the market. This comprehensive, objective information allows your company to mitigate risk, identify new opportunities, and drive effective strategies for growth.
Market Overview
Environmental Pressures Encourage Greater focus on Bio-renewable Chemicals
The South African bio-renewable chemicals industry is in an emerging market stage with a number of local end-user companies such as paper and pulp who are investing in biomass-to-energy projects. This is expected to stimulate investment and growth in the local bio-renewable chemicals industry. Currently, the local market is dominated by imports from multinationals, or local subsidiaries of international companies.
“The global market for bio-renewable chemicals has been drastically transformed by the influence of environmental restrictions from the Stockholm and Rotterdam Conventions,” notes the analyst of this research. “This has had a knock-on effect on the local market even as looming deadlines for environmental change are set to impact the South African market.” The change has come about fairly quickly, particularly since South Africa has such a large abundance of natural feedstocks from the sugar and paper and pulp industries. These feedstocks include cellulose, starch and glycerol, all by-products of manufacturing and agro-processing industries. Since the South African market is still fairly young, it is classified as an emerging market. It is therefore projected to experience intermediate to high growth of approximately 6 per cent in the next five years.
Multinationals Pose Major Obstacle to Entry of Local Competitors
The most important restraint in the local market for bio-renewable chemicals is the dominance of long-established multinationals that have been able to bring completed imports into the country. This, coupled with the high capital requirements of the bio-refinery infrastructure, has discouraged local companies from entering the bio-renewable chemicals market. Evidence of this fact is that the only local investments in biomass-to-energy have been in conjunction with government projects and with multinational subsidiaries in the local market.
The government and major chemical companies such as Sasol and Omnia are essential in supporting local market development and promoting the uptake of bio-renewable chemicals. Companies such as Tongaat Hulett Starch and Illovo Sugar Ltd have already started producing downstream products in the bio-renewable chemicals industry. “Suppliers and industry regulators, such as the Chemical and Allied Industry Association (CAIA) and development finance corporations will be crucial to local market development, especially if interventions are enforced,” concludes the analyst.
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
- Renewable chemicals
- Specialty chemicals
By Product
- Glycerol
- Lactic acid
- Succinic acid
- 1,3 propanediol
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