LONDON, Jan. 14, 2016 /PRNewswire/ --
Use this report to:
- Learn about the global fermentation industry with emphasis on major fermentation-derived products used in food, feed, pharmaceutical and technical applications.
- Focus on the latest developments in major fermentation-derived products, with detail description of each individual product, industry developments, estimates of volume produced and consumed, and finally price trends and industry structure.
- Receive analysis of carbohydrate demand by product and production site, and benchmarking demand with carbohydrate availability, and to identify future regions for which raw material supply might become stressed.
- Identify the most important companies that are active in the fermentation processes and their strategies for the future.
- The global market for fermentation-derived products is expected to increase from nearly $24.3 billion in 2015 to $35.1 billion in 2020, with a compound annual growth rate (CAGR) of 7.7% from 2015 to 2020.
- The fermentation-derived amino acid market is expected to increase from $8.9 billion in 2015 to $12.6 billion in 2020, with a CAGR of 7.3%.
- The global market value of fermentation-derived industrial enzymes is estimated at $6.3 billion in 2015. This category is expected to reach nearly $10.6 billion in 2020, with a CAGR of 10.8% from 2015 to 2020.
Introduction & Scope
STUDY GOALS AND OBJECTIVES
The number of products developed by a fermentation process has increased more than what many industry developers had anticipated over a decade ago. The market has experienced significant fluctuations in pricing, has undergone wide variations in consolidation and product development, and is highly susceptible to a variety of factors, including the agricultural industry, food preferences and resulting consumption, bio-ethanol development and other macro-economic indicators such as disposable incomes, Gross Domestic Product (GDP) and socioeconomic trends. Two of the most important factors that have influenced the fermentation industry landscape over the past decade are the development of the global bio-ethanol industry and the change of economic conditions in China. Bio-ethanol came on the market as an additional demand driver for the typical fermentation feedstock. Shortages of starches and of sugars developed and led to high carbohydrate prices, triggering price increases across all fermentation-derived products and fostering consolidation among manufacturers.
China lost its self-sufficiency in grains and in carbohydrates and the Chinese fermentation industry started to purchase feedstock from the global markets at standard prices. As energy prices increased drastically and environmental protection laws started becoming more enforced, the competitiveness of the Chinese fermentation industry in comparison with Western companies suffered and many smaller producers exited the marketplace. For some fermentation products, only one or two manufacturers still have a strong presence. While such general developments affected virtually all product categories, particular dynamics affected specific sections of the industry. The basic building blocks for a number of crude antibiotics are still manufactured by fermentation. The demand for antibiotics is still high and growing not only because of human consumption but also because of use in animal feeds. In several countries there is a ban on the prophylactic use of antibiotics in animal feed products.
The organic acid market has been focused on the development of new fermentation-derived products, such as succinic acid. Several companies have made structural changes internally to offer this product; while other companies have engaged in strategic partnerships to grab a piece of the market. Lactic acid has developed into one of the most stable products with healthy growth, as it is the starting material for polylactic acid (PLA), a polymer thought to have the potential to replace petroleum-derived plastic products soon and in large scale. As a direct effect of the increasing demand for cereals used in bio-ethanol programs, farmers planted, on a large scale, corn instead of soybeans. The decreased supply of soybeans and cakes caused their prices to soar. Synthetic amino acids as substitutes for plant protein saw a strong revival, and lysine, threonine and tryptophan profited. Prices for such products came down again by the mid-2000s and since then consumption has remained relatively steady. L-Lysine consumption now exceeds 2.2 million metric tons.
Enzymes, as typical chemical intermediates, continued to enjoy high popularity across all types. Whether in applications such as food, textile, leather or detergents, their use developed at moderate rates, while demand was skyrocketing in applications relevant for bio-ethanol production, for increasing feeding efficiencies, or for cellulose and hemi-cellulose cracking. Over the past decade, phytase, an enzyme used for decomposing phytin-phosphate of plants, has enjoyed high demand and attractive market conditions. Leading enzyme producers have made heavy investments in the development of enzyme cocktails that are able to break down hemi-cellulose and woody material for use in bio-refineries. Novozymes, Danisco A/S and DSM dominate the industry. Polysaccharides such as xanthan still enjoy popularity in all their applications, such as food thickening and oil drilling. It was once thought that China would be a high-production country for xanthan, but, despite some key players in the industry being based there, Western producers lead the world market.
Ascorbic acid is still the main vitamin derived from fermentation and was one of the products for which prices decreased so much during the early 2000s that even a number of Chinese manufacturers exited the market. Now, vitamin C prices are back to about $10 per kg, and the consolidated market environment has yielded high margins for participants. Similarly, riboflavin saw an extreme price peak during the mid-2000s.
Prices have since become more reasonable and have stabilized. Due to technical and marketing reasons, carotenoids produced by fermentation have not developed into serious competition for synthetic carotenes. Market development of fermentation derived-carotenoids has been largely disappointing for producers. This report focuses on the latest developments in major fermentation-derived products. It explains why the markets developed as they did, and extrapolates data, although it has to be realized that any kind of prediction may be variable in light of erratically changing macro-economic conditions all over the world.
REASONS FOR DOING THE STUDY
The report reviews the global fermentation industry with emphasis on major fermentation-derived products used in food, feed, pharmaceutical and technical applications. It provides the most up-to-date information on quantities manufactured, prices and market value developments, and industry structures. It enables the reader to understand the industry in general, while also providing insight into the inter-relationship between the ethanol- and other carbohydrate-using industries.
The report is designed to assist decision-makers in the fermentation industry by providing background information to be considered in capacity expansions, when entering into or exiting from the business of fermentation products and ingredients. It should also support selection of sites and of manufacturing processes for future plants. In view of the dynamics of the global carbohydrate markets and constantly changing
economic framework conditions for fermentation products, the determination of the most appropriate production site for specific products becomes increasingly important.
SCOPE AND FORMAT OF THE REPORT
After categorizing the main fermentation products, the report describes each individual product, reviews industry developments, makes estimates of current volumes produced and consumed, and finally considers price trends and industry structure. Building on carbohydrate conversion rates and production sites, the demand for carbohydrates is estimated for specific regions and contrasted with availability. Those
regions and products that may experience tighter production due to restrained raw materials are identified.
This report does not cover every industrial product that is fermented. Most of the products covered in this report have been in the market for years, but the examples of astaxanthin and beta-carotene demonstrate how difficult it is to introduce such products with sustainability. Few recently introduced industrial fermentation products have become mainstream practices, and many new products ultimately disappear.
The report concludes with a review of the most important companies that are active in the fermentation processes.
METHODOLOGY AND INFORMATION SOURCES
Data for this study were collected using both primary and secondary data research techniques. Literature searches of various sources, including scientific, medical and business publications and databases, were conducted. On-line databases and government sources were consulted as well. Extensive interviews with industry personnel, scientists, professional and trade organizations, government agency
personnel, observers, scientists and industry professionals were conducted. The collected data were analyzed to determine specific findings and forecasts. Once these forecasts were obtained, they were validated with help from industry experts. Since some segments of this report are not routinely measured, BCC Research derived estimates from a variety of analogous sources.
Specifically, the methodology applied in this report is based on:
- Major industry developments per product group.
- Analyzing volumes, prices and market value trends.
- Profiling changes in the industry structure, and contrasting actual production with installed capacities.
- Providing market outlooks through 2020.
- Estimating carbohydrate demand by product and production site, and benchmarking demand with carbohydrate availability, identifying future regions for which raw material supply might become stressed.
- Estimating food production trends, output vs. demand.
- Synoptic review of major players in the fermentation industry and their strategies for the future.
There is abundant information on virtually all fermentation products available. However, most of it does not show the inter-relationship between technology, market developments, strategies of producers and, in particular, raw material supply. Understanding such inter-relationships is essential in comprehending the future development of the industry. BCC Research authors have explored this market in-depth in previous reports and continue to closely follow the market and its trends, providing the basis for value in this edition. All market data pertain to the global market at the bulk wholesale level. Data are expressed in current U.S. dollars. The base year of the report is 2015 and forecast data are provided for 2020.
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