Eleven Important Facts That You Should Know About The Fermentation Chemicals Market Industry

The global fermentation chemicals market size is projected to reach USD 85.77 billion by 2025, according to a new report by Grand View Research, Inc. It is projected to expand at a CAGR of 5.6% during the forecast period. Rapid industrialization in the BRICS nation is expected to remain a key growth driver.

Energy, plastics, pharmaceuticals, and food and beverage are some of the manufacturing sectors where fermentation chemicals are used widely. Rising demand for Polytrimethylene Terephthalate (PTT) acts as a major driver for rising product consumption in plastic manufacturing. PDO and lactic acid are anticipated to be the principal beneficiaries of this strong growth, though other fermentation chemicals are expected to benefit, as the market for biodegradable plastics expands.

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Brazil, Russia, India, China, and South Africa (BRICS) has witnessed high production industrial growth, directly impacting demand for fermentation chemicals. These markets registered high industrial production growth over the period and remain one of the fastest-growing industrial regions across the globe. Major growth drivers for the manufacturing sector in these markets include favorable foreign investment norms, availability of large pool of skilled labor, and technological know-how.

Further key findings from the report suggest:

• Alcohol was the largest product segment, with a market share of over 50% in 2018. Increase in use of alcohols in industry application is expected to trigger the demand

• Plastics and fibers is anticipated to witness the fastest CAGR of 5.6% from 2019 to 2025 owing to rising demand for bio-degradable plastics

• Using green chemistry to manufacture of fermentation chemicals is the most efficient and practical way of reducing greenhouse effect. The Environmental Protection Agency (EPA) and the European Union have established stringent regulations which are expected to positively propel the product demand due to its environment-friendly properties

• Germany was one of the major countries in Europe with a global market share of around 11% to 12% in 2018. The demand is driven by technological advancements in chemical manufacturing accompanied with an increasing focus on development of biodegradable plastics

• Some of the key players in the fermentation chemicals market include The Dow Chemical Company; Evonik Industry; Cargill Inc.; Archer Daniels Midland; BASF SE; DuPont Danisco A/S; and Ajinomoto.

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The growth of the pharmaceutical industry, particularly in the U.S., is expected to bolster the market in the country. Increasing research by pharmaceutical companies to develop novel medicines using bacteria cultivation is expected to further drive the demand from U.S. Stringent legislations have been applied by regulatory bodies such as U.S. Environmental Protection Agency (EPA) and U.S. DoE on Greenhouse Gas (GHG) release from chemical factories. This has eventually shifted the focus of industry participants on using biological processes for chemical manufacturing.

Major raw materials used for production include beet, sugarcane, tapioca, wheat, and corn. These agro derivatives are high in starch and carbohydrate contents. The food industry is the major consumer of fermentation chemicals. Increasing population across the globe, especially in Asia Pacific, is expected to boost the demand for food over the forecast period.

Industrial fermentation process for obtaining products such as bioplastics, biofuels, polymers, and composites is highly complex which involves multistep reactions. The conversion employs enzymes or microorganisms such as yeasts and algae, which may be genetically modified, and takes place in bioreactors or fermenters.

Subsequent downstream processing is required to isolate and purify the target products. The development of organic acids and alcohols is a time-consuming process with high holdup time and relatively low yields as compared to synthetic production routes. High capital costs coupled with complex fermentation processes may hinder the growth of the global fermentation chemicals market over the forecast period.

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Alcohols, enzymes, and organic acids are the major products. Alcohols are used widely in bread, pickles, cheese, and alcoholic beverages. Increasing alcohol consumption particularly in Asia Pacific markets such as China, Thailand, India, and Australia along with other markets such as Brazil, Montenegro, Mongolia, and the Caribbean is expected to drive growth over the forecast period.

Enzyme consumption is primarily driven by its usage in a wide range of chemical and industrial applications. Enzymes are used as an active ingredient in detergents. Additionally, enzymes find application in biomass pre-treatment for biofuel production. Increasing demand for biofuels on account of rising concerns regarding depleting oil reserves and unstable fuel prices is expected to drive demand for enzymes as a catalyst.

Organic acids are acids with pKa values ranging from as low as 3 (carboxylic) to as high as 9 (phenolic). Technological advancements in fermentation technology have enabled the production of organic acids on an industrial scale. Organic acids such as lactic acid, tartaric acid, and fumaric acid are widely used as preservatives in foods. Their property to inhibit bacterial growth has been a major factor for its use as a preservative. The growing importance of products with a better shelf life is expected to drive demand for organic acids in processed meat and foods.