Polymer demand increases on back of food, beverage growth
prices for the products forecast to stabilize, according to a new
report.
Growth will be headed by continued strong demand from the food and beverage sector, where polymers are used as thickeners, stabilizers and emulsifiers.
According to the new report published this month by the Freedonia Group, total natural polymer demand is expected to grow almost 6 percent annually to reach $3.6bn in 2010, an equivalent of 1.7 billion pounds.
The food and beverage sector, which will remain the leading market for natural polymers, will see a "modest" growth of just over 4 percent per year. This sector of the market is forecast to be worth $1.3bn in 2010.
"Pockets of growth" exist in areas such as low fat and reduced carbohydrate food formulations, reveals the report, entitled Natural Polymers.
Products such as CMC and xanthan gum will increasingly be used to improve mouthfeel and texture as fats and sugars are removed, it said.
Cellulose ether demand is projected to increase 4.2 percent yearly to $1bn in 2010. Cellulose ethers, which accounted for 31 percent of total demand in 2005, have widespread applications in food products. Starch and fermentation product demand is forecast to grow at a double-digit pace to nearly $800m in 2010.
"Robust growth" is anticipated for protein-based polymers such as collagen, with further advances threatened by mature wheat gluten uses.
The marine polymer segment will be driven by opportunities for carrageenan andalginates, while exudate and vegetable gum demand will be boosted by food and beverage applications for guar gum and gum arabic.
Threats to further growth include mature applications and variable supplies for products such as guar gum due to climatic and political uncertainties, said Freedonia. And with many natural polymers harvested offshore, such as carrageenan and gum arabic, imports are also expected to constitute a growing share of domestic demand.
According to the new report, which can be purchased for $4,300, average natural polymer prices are expected to stabilize, reflecting declining prices for starch and fermentation products.
Prices of other natural polymers will be moderated by the commodity nature of most materials and the dominance of price over other considerations, said the report.
The US natural polymer industry is dominated by large, multinational companies, with smaller, more specialized firms active in novel technologies such as starch blend polymers.
According to Freedonia, the top five natural polymer producers in the US - Hercules, Dow Chemical, Kelco (JM Huber), FMC BioPolymer and Danisco - together accounted for 43 percent of total sales in 2005.
Hercules' Aqualon subsidiary has a commanding position in cellulose ethers, as well as guar gum. FMC BioPolymer is the world's largest producer of carrageenan and microcrystalline cellulose, and the second largest producer of alginates. Cargill's NatureWorks, the world's largest producer of polylactic acid, exports most of its product to European and other countries.
According to the report, industry consolidation will continue to increase as firms seek to broaden product and geographic scope, while shedding noncore operations.
