The global bio-based chemicals market is expected to witness a healthy growth over the next five years. The global market represents strong numbers in terms of consumption and is expected to grow year-on-year. The global bio-based chemicals market is highly fragmented with the majority of tier-1 players.
Some of the key players operating in the global bio-based chemicals market are BASF SE (Germany), Vertec BioSolvents (US), AGAE Technologies, LLC (US), TOTAL (France), BioAmber Inc (US), Archer Daniels Midland Company (US), DowDuPont (US), Braskem SA (Brazil), Evonik Industries (Germany), Toray Industries Inc (Japan), Cargill, Incorporated (US), Itaconix PLC (UK), GFBiochemicals Ltd (UK), Mitsubishi Chemical Corporation (Japan), and Royal DSM NV (Netherlands)
These players are focusing on growth strategies to strengthen their foothold, which is likely to increase the competition among players. BASF SE (Germany), TOTAL (France), Archer Daniels Midland Company (US), Toray Industries Inc (Japan), and Royal DSM NV (Netherlands) collectively hold the largest share of the global bio-based chemicals market. There is intense competition among these players to capture maximum market share.
Most of the tier-1 participants operating in the global market have acquired a substantial market share by offering a broad spectrum of products. Their primary focus is on increasing the production capacities to reach the desired organizational growth.
The key players in the global bio-based chemicals market are focusing on growth strategies such as expansion, acquisitions, joint ventures, product launches, and technology transfer on a global level to gain a maximum share of the global market. Among these, acquisition is the most common growth strategy adopted by most of the participants.
Threat of New EntrantsNew entrants are players willing to enter the global bio-based chemicals market. The threat of new entrants to the existing players in the global bio-based chemicals market is expected to be low to moderate. The global bio-based chemicals market is currently at a nascent stage with a relatively small number of players globally, but has immense growth opportunities. In the future, with the increase in the demand for these chemicals, the trend will move towards full-scale commercialization from pilot-scale projects. New entrants are expected to bring new capacity and often substantial resources. Furthermore, favorable government policies toward green & biodegradable products are expected to allow more companies to enter the market with increased capacities. However, the high production cost of bio-based chemicals act as a barrier to the new entrants to some extent, which increases the level of threat of new entrants to moderate.
Threat of Rivalry
The global bio-based chemicals market is likely to witness a low threat of rivalry. The market for bio-based chemicals is immature and is witnessing dynamic growth with an estimated CAGR of nearly 10.47%. For each chemical, there are limited players in the market, and they do not pose high competition for each other. The demand for these chemicals is growing positively across the globe and all the production volume is consumed, especially in developed countries of North America and Europe. Also, the market is at the growth stage, and no company has yet stabilized here. Thus the degree of competition in the market is low.
Threat of Substitutes
The threat of substitutes for bio-based chemicals market is high. Presently, bio-based chemicals form a small share of the overall chemicals market. They have relatively higher prices as compared to conventional chemicals. This ensures large availability of alternative chemicals for buyers and increases the chances of substitution. There are issues regarding the performance of some bio-based chemicals, which may restrict their applications. The research and development and new product launches are expected to increase the competition in the global bio-based chemicals market.
Bargaining Power of Suppliers
The bargaining power of suppliers is estimated to be low to moderate. Firstly, the presence of a large number of players due to the fragmented nature of the market reduces the switching cost for buyers, resulting in low bargaining power for suppliers. Secondly, the availability of substitutes at lower cost, causes the price-sensitive customers to prefer conventional chemicals. However, the bargaining power of suppliers is expected to increase in the coming years with the increasing R&D on bio-based chemicals and the availability of custom formulations to match desired applications.
Bargaining Power of Buyers
The bargaining power of buyers in the global bio-based chemicals market is estimated to be moderate to high. The buyer’s concentration in the market is high due to the increasing application of bio-based chemicals in various end-use industries such as agriculture, automotive, personal care, food & beverage, packaging, building and construction, and pharmaceuticals. They are all large volume buyers, and the bio-based chemicals manufacturers and suppliers are highly dependent on them, which increases the bargaining power of buyers. Additionally, the availability of other alternatives at lower prices with similar performance is expected to increase the bargaining power of buyers in the global bio-based chemicals market.
