Status of global surfactant markets

FOCUS ON SURFACTANTS A MONTHLY REPORT FROM CAROLINE EDSER NOVEMBER 2008 In this issue

STATUS OF GLOBAL SURFACTANT MARKETS

RAW MATERIALS

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Oleochemicals: restructuring among Japanese firms

SURFACTANTS

2-3

P&G’s sustainability strategy

ASSOCIATED PRODUCTS

3-4

Builders: data for TKPP

APPLICATIONS

4-5

Household & personal care Health

PATENTS

5

Novel soap-containing fabric-care item patented by Unilever

ENVIRONMENT

5

Update on emissions by the chemical industry

MARKET REVIEWS

5

Detergents & personal care products in Finland

COMPANY RESULTS

6-7

Recent financial figures for Sasol, Cognis and others

COMPANY NEWS

7

New CEO for Unilever

EVENTS

SURFACTANTS

AN INTERNATIONAL NEWSLETTER MONITORING TECHNICAL AND COMMERCIAL DEVELOPMENTS FOR ALL SURFACE ACTIVE AGENTS ISSN 1351–4210

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This summer’s 7th World Surfactants Congress (CESIO 2008) in Paris brought together more than 1000 participants from around the globe to discuss a wide range of topics concerning the industry, including sustainability, new product development and the impact of regulations. It also provided an opportunity to assess the current and future health of the worldwide surfactants market and its constituent regions. Global production of surfactants currently stands at around 12 M tonnes/y, with ‘commodity’ products accounting for about 75%, according to figures cited by the congress chairman, Bernard Brancq of SEPPIC. At present the average global growth rate is around 3%/y but this is likely to decline to less than 2% in future, he said. Higher growth is expected in Europe than North America (presumably because of the inclusion of Eastern and Central European countries in the trading bloc), with the BRIC countries of Brazil, Russia, India and China projected to post growth of more than 10%/y. Annual growth for industry staple LAB is holding steady at about 2%, Brancq commented. Insights into North America’s primary surfactant market were provided by Joel Houston of Colin A Houston & Associates. He covered the key issues impacting the market there, the continued rationalization by surfactant producers and their suppliers, trends in finished products and the on-going search for alternative feedstock sources. Elsewhere, Charles Bragg of Procter & Gamble cited a

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figure of 1.7 M tonnes for the North American consumption of surfactants in consumer products in 2006 and forecast this to rise to 1.9 M tonnes in 2010, representing an average annual growth rate (AAGR) of 2.9%/y. For a more-detailed discussion of the facts and figures concerning the US surfactants market, the region’s dominant market, please see the Jul 2008 issue. Broadly in agreement with Brancq’s figures, Guido Bognolo of WSA Associates in Belgium said that the ‘mature’ surfactants markets (USA/ Canada, Western Europe, Japan, Korea and Taiwan) are growing at best in line with GDP at c. 3%/y but BRIC countries and other emerging economies in SE Asia, Latin America and the Middle East are growing at 24 times that rate. Bognolo commented on the difficulty of monitoring real movements in the surfactants market because of factors such as the differing definitions of geographical regions (eg is ‘Europe’ confined to EU Member States or does it include all countries west of the Urals?) and the absence of a clear distinction between nameplate capacity, actual production and actual consumption, etc. However, he sized the European surfactants market at 3 M tonnes in 2007, up from 2.6 M tonnes in 2002, representing an AAGR of 3%, or just above GDP growth, driven by the increasing contribution of Central European countries and exports to China, India and Latin America. Nonionic surfactants are the largest class in Europe owing to their favourable properties and performance. Bognolo highlighted the fact that restrictions on

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F O C US the use of alkylphenol ethoxylates (APEs) in the EU since 2005 have resulted in their full replacement by other ethoxylates in almost all instances. Alkylpolyglucosides (APGs) have as yet failed to meet expectations for cost reasons, but anionic sulfates and sulfonates, including LAS, have held their position, he said. In his view, the jury is still out on the potential of methyl ester sulfonates (MES) to replace LAS. Looking to the future, Bognolo suggested that growth rates in Europe are likely to fall. He observed that commercial success in the past few decades has been achieved more by incremental improvements in product quality and progress in formulation technology than by ‘step change’ innovation, and predicts that this trend will continue, with sustainability likely to be a major driver for the European industry for the foreseeable future. Shigeru Sekine of Nikko Chemicals addressed the status of the Japanese surfactant market, estimated to be worth €1.3 bn in 2007. In value terms this has changed little over the past decade, but in volume terms surfactants manufacturing has grown some 13% between 2000 and 2007, or an AAGR of just under 2% (ahead of much of the country’s chemical industry) to reach 1.08 M tonnes in 2007. Production of anionics reached a peak around 1990 and has since fallen to be overtaken in both volume and value terms by nonionics. In 2007, shipments of nonionics exceeded 450,000 tonnes (c €780 M), with anionics at 300,000 tonnes (c €280 M), and cationics, amphoterics and mixtures all at the 20-30,000 tonnes level, according to cited data from the Japan Surfactants Industry Association (JSIA). Japan is a net exporter of surfactants (>100,000 tonnes in 2007), with some 80% of the total being sold within Asia. China is the largest customer, accounting for about a third of all exports, followed by S Korea, Taiwan, the USA and Thailand. Here the situation in the mature markets has been briefly surveyed. We’ll take a look at the situation in one of the so-called ‘emerging markets’ – the Middle East – in a subsequent issue. Caroline Edser

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RAW MATERIALS N-paraffins Sasol Wax to expand production in South Africa Sasol has approved Rand 558 M for its Sasol Wax operation to complete basic engineering for a project to double its production of hard wax in two phases and for ordering long-lead items for the first phase of this expansion. The project will also result in increased production of medium waxes (used primarily for candle production) as well as liquid paraffins used in a variety of industrial applications. Construction of the first phase is expected to be completed in 2011 and the second phase should be fully operational in 2013. Total production of all products from the Sasolburg site near Johannesburg will increase by more than 50%. Press release from: Sasol Wax, Sasolburg, South Africa. Website: http://www.sasolwax.com (5 Sep 2008)

Oleochemicals Japan oleochemical makers restructuring for survival New Japan Chemical, Adeka Corp and NOF Corp opted to dissolve their jv Chiba Fatty Acid, which will become a wholly owned unit of New Japan Chemical. The move reflects consolidation strategies being pursued by Japan’s oleochemical sector to help companies survive declining profits brought about by surging feedstock costs and inflow of foreign products. NOF intends to focus on making fat/oil derivatives, such as fatty acids, glycerine, metal soaps and ethylene bisamide, at its Amagasaki plant in western Japan. NOF rival Kao Corp may use palm oil as feedstock for its stearic acid production from animal oils and fats. The demand for stearic acid for the production of rubber and other industrial products had reportedly reached its peak, but the use of vegetable oil would help the product find a market as a high-value cosmetics material. Japanese oleochemical producers have

partnered with Malaysian and Indonesian palm plantation owners to make fat/oil derivatives, but a number of them are reassessing these undertakings. Japan Chemical Week, 28 Aug 2008, 49 (2479), 4

Other Cosmetics makers shifting from squalene to synthetic materials Demand is growing for such hydrocarbon oils as hydrogenated polybutene and olefin oligomers as substitutes for natural squalene in cosmetics applications. Nisshin Oillio Group has begun full-fledged marketing of its Nomcort HP-100 and Nomcort HP-30 as squalene alternatives. Nomcort HP-100 is claimed to offer a lighter feel compared with the company’s current offerings. Nikko Chemicals, meanwhile, launched a new version of its olefin oligomer at the end of 2007. NIK-KOL Syncelane 4SP is expected to bring in robust sales due to the price advantage. For NOF Corp, sales of its Parleame hydrogenated polybutene have been increasing at double digits. Prices of shark oil-based squalene have increased fourfold compared with the 2004 level, and supply has become limited with lower fishery yields. Also, cosmetics companies in Europe are increasingly adopting synthetic materials in their production instead of squalene to preserve marine resources. Japan Chemical Week, 18 Sep 2008, 49 (2482), 6

SURFACTANTS Material facts: surfactants Procter & Gamble estimates that the 2007 global surfactants demand from detergents was 7.6 M tonnes with a value of €40 bn. Volume demand was led by linear alkylbenzene sulfonates (LAS) with 52%, followed by alcohol ethoxysulfates (AES) with 18%, alkyl ethoxylates (AE) with 16%, and APE (alkylphenol ethoxylates) with 9%. Meanwhile, Procter & Gamble has disclosed that, as part of its sustainability strategy, it will be looking into optimizing production and usage, as well as boosting performance, of its products. Potential NOVEMBER 2008