According to MarketsandMarkets, the global pine-derived chemicals market is estimated to be valued at USD 5.5 billion in 2022 and is projected to reach USD 6.8 billion by 2027, recording a CAGR of 4.5%, in terms of value. Pine-derived chemicals is a major commercial product of pine trees.
Pine-derived chemicals are used in the manufacturing of paints & coatings, adhesives & sealants, surfactants, and printing inks. Additionally, it finds its application in cosmetics, vitamin intermediates, pine oil disinfectants & insect repellents, fragrances & perfumes, and food & drink flavors.
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Market Dynamics
Drivers: Increasing demand for bio-friendly products
The demand for these products is exponentially increasing because consumers are inclined more toward environment-friendly products. These chemicals use natural and renewable products as raw materials to develop basic as well as necessary items and serve as a mechanism to lower the carbon footprint. The pine-derived chemicals are obtained from living trees, pine stumps, and logs for which the industry depends on raw materials from the forestry sector. Crude Tall Oil (CTO) is a very prominent example of pine chemistry which has varied applications. American Chemistry Council (ACC) presented that the global availability of CTO will increase to 2.26 million tonnes per year by 2030, owing to the growth of pine-derived chemicals over their chemical substitutes.
Restraints: Stringent regulations imposed by government
The major government agencies such as the Environment Protection Agency (EPA), Food and Drugs Association (FDA), The American Chemistry Council, and the Pine Chemicals Association regulate pine-derived chemicals. These organizations are responsible for registering the products and regulating their safety, usage, and residue levels permitted in food and other applications. Increasing strictness in the rules and regulations of pine-derived chemicals is mainly due to environmental degradation. These regulations primarily affect the already existing pine-derived chemical products while resulting in the delayed introduction of new products.
Opportunities: Opportunities in developing countries
There are huge growth opportunities in the world’s developing countries where the agriculture sector is growing rapidly. The high population growth and growing industrialization result in increased food demand. More than 90% of total industries’ wood products manufactured in developing countries will be utilized domestically. The FAO projects that the trend will continue to be the same for the next two decades. The high population growth and growing industrialization result in increased food demand. This will boost the pine-derived chemicals market. There have been quite a few investments by means of mergers, acquisitions, and partnerships by key players in developing regions. These developments in the pine-derived chemicals industry will drive the need for raw materials obtained from pine trees and increase its demand and application into the end-consumer segment. It would also provide employment and generate income opportunities in developing countries.
Challenges: Rising labor costs
In emerging economies where labor costs are low, laborers work for themselves in communally owned forests, accepting lower wages due to low bargaining power, working in difficult terrain with limited or no mechanization or modern safety equipment. Additionally, the gum resin farmers are leaving the forest for better-paying jobs in the cities, which causes labor and production shortage, leading to a rise in wages and increasing the cost of production. Outdated forestry management practices restrain the pine chemical output.
Asia Pacific’s growth is attributed by many new ventures, acquisitions, and collaborations occur between global players, which are expected to change the dynamics of the Asia Pacific pine-derived chemicals market. Due to low labor costs and the execution of new processing methods, most of the production of pine chemicals, especially gum rosin, is carried out in the Asia Pacific, affecting the overall market conditions. In short, the Asia Pacific region is rapidly emerging in the pine chemicals manufacturing segment, supported by strong forestry management, leading to sustainability.
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Key Market Players:
Key players in this market include Foreverest Resources Ltd, (China), Harima Chemical Company (Japan), Takasgo International Corporation (Japan), Chemiplas Australia Pvt Ltd (Australia), Mentha and Allied Products Ltd., (India).