The global oleochemicals category is anticipated to grow at a CAGR of 7.1% from 2023 to 2030. Growth of the category can be attributed to high cost of petrochemicals, growing consumption of sustainable, bio-based, and renewable chemicals, and rising demand by end-user sectors such as food processing, pharmaceuticals, textiles, personal care & cosmetics, etc. Petrochemicals, which are made from petroleum, can be substituted with oleochemicals. Oleochemicals are produced using variety of chemical processes, including hydrogenation, alcohol-based alcoholysis, and water-based hydrolysis. In addition, it is a substitute to synthetic chemicals due to the presence of low to non-existent amount of carcinogens. High input costs are a common barrier for the category. This is particularly true for the fatty acid manufacturing process, which is necessary for the synthesis of oleochemicals. Future pricing for these chemicals is difficult to anticipate because crude oil prices are typically unstable.

Technologies that drive the global category include additive manufacturing, blockchain, big data analytics, and IoT (internet of things). Advanced manufacturing is becoming significant in the production of oleochemicals since it enables efficient, accurate and faster manufacturing. It involves application of technologies such as robotics & automation and additive manufacturing to optimize the process of manufacturing. Blockchain technology can enhance supply chain transparency in the production and can assist in ensuring that everyone involved in the supply chain has access to the same data by generating a transparent and safe record of transactions. By doing this, the likelihood of fraud can be decreased and mutual trust can be increased. Massive amounts of data is produced in the sector, ranging from output quantities and quality control measures to raw material inputs. Big data analytics enables businesses to examine and make sense of this enormous volume of data, gaining insightful knowledge that helps them to streamline operations and make wise decisions.

The category for oleochemicals is moderately consolidated, with few global players holding majority of share in the market. Numerous smaller businesses serve specialized markets and applications, but a few major players still hold a disproportionate amount of power in specific regions and segments. Players in the market mostly base their decisions on the cost and utility of the product. A number of significant firms are involved in many strategic alliances to advance sales and brand awareness in an effort to increase their market share and get a competitive edge. For instance, Oleon Americas, a firm that produces chemicals through natural chemistry, opened its sustainable oleochemicals production facility in Texas (U.S.), in June 2023. Due to stable supply assurance, aggressive pricing, and reduced risk, buyers have more negotiating power with significant suppliers that are integrated from plantations to oleochemicals than with non-integrated suppliers.

Order your copy of the Oleochemicals Procurement Intelligence Report, 2023 - 2030, published by Grand View Research, to get more details regarding day one, quick wins, portfolio analysis, key negotiation strategies of key suppliers, and low-cost/best-cost sourcing analysis

Raw materials (oils and naturally occurring fats derived from plants and animals), labor, energy, equipment & machinery, and packaging & transportation constitutes the key cost components in this category. Over 65.9% of the overall production cost is attributed to raw materials, making them the primary cost driver. Prices of raw materials / feedstocks in the category are complex, and there are always variables that will raise them up and / or move them downward. For instance, the price of palm oil is influenced by the yield of trees (which are typically weather dependent), stock holding by the producers, and prices of fuel. Similarly, ‘Tallow’ (a by-product of beef processing), is ought to be inexpensive unless it is more valuable than its primary product. Until November 2023, the average price of palm oil over the year had been MYR 3,760 per tonne. The price of tallow fat ranges between USD 2.90 - USD 7.80, in the U.S.

Asia-Pacific region dominates the global oleochemicals category, holding over 40.9% of global market share. The region witnesses the presence of significant number of producers, particularly in Indonesia and Malaysia. Its sizable captive market and wealth of raw materials, like palm oil and palm kernel oil, have also prompted firms to increase their production capacity. The availability and affordability of inexpensive labor are the main reasons for the extensive offshore of manufacturing operations from Europe and North America to Asia-Pacific nations. Ensuring that a supplier is sustainable & reliable by examining its supply chain and understanding its sourcing methodology, assessing if a supplier prioritizes green processes, evaluating a supplier’s customization capabilities, and focusing on cost-effectiveness while selecting a supplier in terms of favorable contractual terms and prices are some of the best sourcing practices considered in this category.

Oleochemicals Procurement Intelligence Report Scope

• Oleochemicals Category Growth Rate: CAGR of 7.1% from 2023 to 2030

• Pricing Growth Outlook: 5% - 10% increase (Annually)

• Pricing Models: Cost-plus pricing, Competition-based pricing

• Supplier Selection Scope: Cost and pricing, Past engagements, Productivity, Geographical presence

• Supplier Selection Criteria: Industries served, years in service, geographic service provision, range of products on offer, type of packaging, quality assurance, logistics & warehousing capability, regulatory compliance, lead time, and others

• Report Coverage: Revenue forecast, supplier ranking, supplier matrix, emerging technology, pricing models, cost structure, competitive landscape, growth factors, trends, engagement, and operating model

Browse through Grand View Research’s collection of procurement intelligence studies:

• Chemical Management Services Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

• Caustic Soda Procurement Intelligence Report, 2023 - 2030 (Revenue Forecast, Supplier Ranking & Matrix, Emerging Technologies, Pricing Models, Cost Structure, Engagement & Operating Model, Competitive Landscape)

Key Companies 

• Berg + Schmidt GmbH & Co. KG.

• Corbion NV

• Croda International Plc

• Ecogreen Oleochemicals (Singapore) Pte. Ltd.

• Emery Oleochemicals

• Evonik Industries AG

• IOI Oleochemical Industries Bhd

• JNJ Oleochemicals Industries, Inc.

• Kao Corporation

• Oleon NV

• Vantage Group

• Wilmar International Ltd.

Brief about Pipeline by Grand View Research:

A smart and effective supply chain is essential for growth in any organization. Pipeline division at Grand View Research provides detailed insights on every aspect of supply chain, which helps in efficient procurement decisions.

Our services include (not limited to):

• Market Intelligence involving – market size and forecast, growth factors, and driving trends

• Price and Cost Intelligence – pricing models adopted for the category, total cost of ownerships

• Supplier Intelligence – rich insight on supplier landscape, and identifies suppliers who are dominating, emerging, lounging, and specializing

• Sourcing / Procurement Intelligence – best practices followed in the industry, identifying standard KPIs and SLAs, peer analysis, negotiation strategies to be utilized with the suppliers, and best suited countries for sourcing to minimize supply chain disruptions