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The rapid growth of end-user sectors, including personal care and household products, mining, and agrochemicals, is expected to sustain the Brazilian and Argentinian surfactants market, according to a new report. The personal and household care segments, in particular, will be key end users chiefly due to the greater purchasing power of the middle class, who are spending more on fast-moving consumer goods.
New analysis from Frost & Sullivan, "Analysis of the Brazilian and Argentinian Surfactants Market," finds that the market earned revenues of $1.44 billion in 2012 and estimates this to reach $1.96 billion in 2018. The study covers amphoteric, anionic, cationic and nonionic surfactants.
"Anionic surfactants account for nearly 50% of the total market in Brazil and Argentina as it is heavily utilized in the personal and household care segments," said Frost & Sullivan chemicals, materials and food industry analyst Hernan Cavarra. "The cationic surfactants segment will expand the fastest."
Despite this increase in consumption, higher surfactant prices tied to the rise in petroleum, production and labor costs are reducing the margins of domestic manufacturers. The need to compete with low-priced Asian products further strains profits. Moreover, consolidation in the customer base has decreased business opportunities in Brazil. This has enhanced customer negotiation power, which along with retailer consolidation, curbs revenues.
Developing multifunctional products will widen application scope and be a crucial step to overcome these challenges. The multifunctionality of final products, which are able to solubilize, hold ingredients together, and improve product stability, will spur sale volumes.
Also, environmental concerns among customers in Brazil and Argentina will lead to the creation of natural, renewable-based products. Emphasis on green surfactants manufacturing is especially vital as raw material prices from petroleum derivatives escalate.
"Manufacturers are responding to this trend by eliminating alkylphenol ethoxylates and nonylphenol ethoxylates from their formulations and replacing them with natural, renewable, oleo-based products such as methyl ester sulfates from soy, palm oil or seed oil-based alcohol ethoxylates," observed Cavarra. "More focus on research and development to add value to products will contribute to market growth."
Customer service and technical assistance are also important factors for winning share and recognition in this dynamic market.