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The innovation game: personal care products
FOCUS
LEGISLATION/ ENVIRONMENT Europe tightens detergent rules The new EU detergents regulation, Regulation EC No 648/2004 published on 8 Apr 2004, incorporates revised rules on biodegradability testing and requires more content information to be provided on detergent labels and, on request, made available to health care professionals. The new regulation, which comes into force on 8 Oct 2005, will replace existing detergent legislation (Directives 73/404/EEC, 73/405/EEC, 82/242/EEC, 82/243/EEC, and 86/94/EEC). Manufacturers and importers of detergent formulations will need to ensure that products offered for sale in the EU comply with the new legislation. The Commission Recommendation (89/542/EEC) on the labelling of detergents and cleaning products has been incorporated into the new regulation. As a regulation, the legislation does not allow for any modifications within member states. The legislation includes a definition for a surfactant for the first time and provides a new definition of a detergent. A significant change is a new requirement that biodegradability thresholds are met by all surfactants used in detergent formulations. The new criteria could provide an opportunity for some nonionic and anionic surfactants that currently fail the primary detergent biodegradability test. A concern for the European surfactants and detergents industry is that many surfactants that meet the requirements of the new legislation will still become the subject of further regulation under REACH. Oils and Fats International, Mar 2005, 21 (2), 20-21
MARKET REVIEWS The innovation game: personal care products The European market for personal care products is very attractive for 6
ON
S U R FA C TA N T S
chemical companies. It is not cyclical and has witnessed decades of growth and high margins. It is also a market where innovation is valued. The market is made up of surfactants (36%), active ingredients (27%), polymers (24%), UV filters (7%) and biocides (6%). Innovation allows companies to develop new market segments or novel products. Examples of novel ingredients and markets include hair fixative polymers for the male grooming sector, products that retain youthfulness and natural products. European Chemical News, 11 Apr 2005, 82 (2142), 15-17
Lauric oil market trends Lauric oils – coconut oil (CNO) and palm kernel oil (PKO) – have previously experienced dramatic price swings compared with other vegetable oils such as palm oil. Graphs show the spread in prices (cif Rotterdam) for both CNO and PKO between Jan 1991 and Dec 2004. The most significant change during this period has been in the supply ratio between CNO and PKO. In the main producing and exporting countries, Indonesia, the Philippines and Malaysia, the cumulative average growth rate for PKO during 19822003 was 9% compared with only 0.4% for CNO. In 1982, PKO had only an 18% share of the market, but this had increased to 53% in 2002. The lauric oil market is less vulnerable to supply swings in CNO and the price differential between lauric oils and palm oil should not be affected by such swings in the future. In general, the supply of lauric oils is now much more balanced compared with the 1980s or 1990s. Oils and Fats International, Mar 2005, 21 (2), 18-19
Optimism in Chile’s and Brazil’s chemical industry Given its stable economic position, Chile offers a favourable demand situation for the chemical industry. With continuing high prices for Chile’s most important export goods, prospects look good for both the overall economy and the chemical industry. Growth in the building industry and continuing strong growth in plastics processing is boosting
demand for chemicals. Detergent and cleaner sales are around $200 M/y. Chile’s market in perfumes and cosmetics rose to $730 M in 2004. In Brazil, figures for 2004 point to new production and import records for the chemical industry. Sales are estimated to be a record $58.7 bn, a rise of 28.7% on 2003. Chemical industry growth in 2004 was greater than expected. Production in Jan-Aug 2004 was up 8.3%. Capacity utilization reached 94% in Aug 2004. In cleaners, capacity utilization was 98%, in petrochemical products 97%. 2003 saw net chemical sales rise 21% to $45.3 bn, with industrial chemicals accounting for 53%. Nachrichten fuer Aussenhandel, 28 Apr 2005, 68 (82), 2 & 3 (in German)
Shampoo imports eroding surfactant consumption in Japan Japanese demand for surfactants for production of shampoos is being seriously reduced by increased shampoo imports. There was a 31% rise in imports in 2004 to 27,440 tonne accounting for some 20% of domestic demand. This resulted in an 11% decline in domestic sales of the main shampoo ingredient, anionic surfactants. With effect from 1 Apr 2005, the outsourcing of production is being encouraged under the revised Pharmaceutical Affairs Law which is expected to lead to increased overseas contract production and hence imports of shampoos. There was a 3% increase overall in Japanese shampoo demand in 2004 and the market is subject to significant competition from global suppliers. In the period 1999-2004 there was a 14% increase in domestic shampoo demand but imports rose by more than eight-fold. Japan Chemical Week, 28 Apr/2 May 2005, 46 (2316), 2
COMPANY RESULTS Stepan reports 1Q 2005 results Stepan Co reported net income of $3.244 M for 1Q ended Mar 2005 (net JUNE 2005
LEGISLATION/ ENVIRONMENT Europe tightens detergent rules The new EU detergents regulation, Regulation EC No 648/2004 published on 8 Apr 2004, incorporates revised rules on biodegradability testing and requires more content information to be provided on detergent labels and, on request, made available to health care professionals. The new regulation, which comes into force on 8 Oct 2005, will replace existing detergent legislation (Directives 73/404/EEC, 73/405/EEC, 82/242/EEC, 82/243/EEC, and 86/94/EEC). Manufacturers and importers of detergent formulations will need to ensure that products offered for sale in the EU comply with the new legislation. The Commission Recommendation (89/542/EEC) on the labelling of detergents and cleaning products has been incorporated into the new regulation. As a regulation, the legislation does not allow for any modifications within member states. The legislation includes a definition for a surfactant for the first time and provides a new definition of a detergent. A significant change is a new requirement that biodegradability thresholds are met by all surfactants used in detergent formulations. The new criteria could provide an opportunity for some nonionic and anionic surfactants that currently fail the primary detergent biodegradability test. A concern for the European surfactants and detergents industry is that many surfactants that meet the requirements of the new legislation will still become the subject of further regulation under REACH. Oils and Fats International, Mar 2005, 21 (2), 20-21
MARKET REVIEWS The innovation game: personal care products The European market for personal care products is very attractive for 6
ON
S U R FA C TA N T S
chemical companies. It is not cyclical and has witnessed decades of growth and high margins. It is also a market where innovation is valued. The market is made up of surfactants (36%), active ingredients (27%), polymers (24%), UV filters (7%) and biocides (6%). Innovation allows companies to develop new market segments or novel products. Examples of novel ingredients and markets include hair fixative polymers for the male grooming sector, products that retain youthfulness and natural products. European Chemical News, 11 Apr 2005, 82 (2142), 15-17
Lauric oil market trends Lauric oils – coconut oil (CNO) and palm kernel oil (PKO) – have previously experienced dramatic price swings compared with other vegetable oils such as palm oil. Graphs show the spread in prices (cif Rotterdam) for both CNO and PKO between Jan 1991 and Dec 2004. The most significant change during this period has been in the supply ratio between CNO and PKO. In the main producing and exporting countries, Indonesia, the Philippines and Malaysia, the cumulative average growth rate for PKO during 19822003 was 9% compared with only 0.4% for CNO. In 1982, PKO had only an 18% share of the market, but this had increased to 53% in 2002. The lauric oil market is less vulnerable to supply swings in CNO and the price differential between lauric oils and palm oil should not be affected by such swings in the future. In general, the supply of lauric oils is now much more balanced compared with the 1980s or 1990s. Oils and Fats International, Mar 2005, 21 (2), 18-19
Optimism in Chile’s and Brazil’s chemical industry Given its stable economic position, Chile offers a favourable demand situation for the chemical industry. With continuing high prices for Chile’s most important export goods, prospects look good for both the overall economy and the chemical industry. Growth in the building industry and continuing strong growth in plastics processing is boosting
demand for chemicals. Detergent and cleaner sales are around $200 M/y. Chile’s market in perfumes and cosmetics rose to $730 M in 2004. In Brazil, figures for 2004 point to new production and import records for the chemical industry. Sales are estimated to be a record $58.7 bn, a rise of 28.7% on 2003. Chemical industry growth in 2004 was greater than expected. Production in Jan-Aug 2004 was up 8.3%. Capacity utilization reached 94% in Aug 2004. In cleaners, capacity utilization was 98%, in petrochemical products 97%. 2003 saw net chemical sales rise 21% to $45.3 bn, with industrial chemicals accounting for 53%. Nachrichten fuer Aussenhandel, 28 Apr 2005, 68 (82), 2 & 3 (in German)
Shampoo imports eroding surfactant consumption in Japan Japanese demand for surfactants for production of shampoos is being seriously reduced by increased shampoo imports. There was a 31% rise in imports in 2004 to 27,440 tonne accounting for some 20% of domestic demand. This resulted in an 11% decline in domestic sales of the main shampoo ingredient, anionic surfactants. With effect from 1 Apr 2005, the outsourcing of production is being encouraged under the revised Pharmaceutical Affairs Law which is expected to lead to increased overseas contract production and hence imports of shampoos. There was a 3% increase overall in Japanese shampoo demand in 2004 and the market is subject to significant competition from global suppliers. In the period 1999-2004 there was a 14% increase in domestic shampoo demand but imports rose by more than eight-fold. Japan Chemical Week, 28 Apr/2 May 2005, 46 (2316), 2
COMPANY RESULTS Stepan reports 1Q 2005 results Stepan Co reported net income of $3.244 M for 1Q ended Mar 2005 (net JUNE 2005