Niche and higher margin esters to counter price erosion and commoditization

Palo Alto, Calif. March 23, 2004 Commoditization coupled with consolidation in the end user and supplier segment is exerting downward pressure on price in the fatty esters market. Possibilities of price fluctuations can be considerably reduced through greater product innovation and focus on specialized and higher margin esters.

"Novel and specialized emollients in the personal care sector and niche esters in the nutraceutical foods segment are finding their own grooves in the saturated fatty esters market," state Technical Insights Industry Manager Girish Solanki.

Product sophistication in performance and value added features such as thickening, anti-irritation, pigment wetting, water solubility, and multi-functionality creates a more diverse and innovative product portfolio.

Emulsifying, softening, and detergency characteristics of fatty esters provide advantages of high performance and custom design versatility, thereby making them popular in the lubricants end-user segment. Pharmaceuticals are also providing outlets to new fatty ester formulations to serve as non-reactive bases and carriers for active drug delivery.

Exciting applications in personal care, especially in Asia, are likely to fuel the use of monohydric alcohol esters in deodorants, antiperspirants, anti-wrinkle, and anti-aging lotions.

"Low-cost Asian products are intensifying price sensitivity due to liberalization policies implemented by the World Trade Organization, which has lowered tariff barriers and created a competitive global market," says Technical Insights Analyst Rajesh Kannan.

In order to survive in such a market, manufacturers in Europe are exporting certain esters such as glycerol and monohydric alcohol from their Asian plants.

Compounding the issue of price pressure are the stringent policies of regulatory agencies such as the U.S. Food and Drug Administration, the Environmental Protection Agency, and Occupational Safety and He

Contact: Julia Paulson
Technical Insights

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