CASTOR OIL DERIVATIVES MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The Castor Oil Derivatives Market size is expected to reach US$ 2.11 Billion by 2030, from US$ 1.29 Billion in 2023, at a CAGR of 7.3% during the forecast period.

Castor oil derivatives are obtained by hydrogenating castor oil and is used in a wide range of industries due to its stability, lubrication, and hydrophobic properties. The derivatives find applications as lubricants, emollients, wetting agents, plasticizers, and others. The market growth is driven by the rising demand from end-use industries such as lubricants, pharmaceuticals, cosmetics, and plastics.

The castor oil derivatives market is segmented based on product type, end-use industry, application, distribution channel, and region. By product type, the market is segmented into hydrogenated castor oil, 12-hydroxy stearic acid, sebacic acid, dehydrated castor oil, castor wax, and others. The hydrogenated castor oil segment held the largest share in 2022 owing to its high usage in lubricants, greases, cosmetics, and biodiesel.

Castor Oil Derivatives Market Regional Insights

• North America is expected to be the largest market for castor oil derivatives during the forecast period, accounting for over 30.5% of the market share in 2023. The growth of the market in North America is attributed to the established end-use industries and high demand for bio-based products.
• Asia Pacific is expected to be the second-largest market for castor oil derivatives, accounting for over 25.2% of the market share in 2023. The growth of the market in Asia Pacific is attributed to rapid industrialization and expanding production capacities.
• Europe is expected to be the fastest-growing market for castor oil derivatives, growing at a CAGR of over 16.3% during the forecast period. The growth of the market in Europe is attributed to stringent regulations supporting sustainable products.

Figure 1. Global Castor Oil Derivatives Market Share (%), by Region, 2023

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Castor Oil Derivatives Market Drivers

• Growing demand from end-use industries: The rising demand for castor oil derivatives from diverse end-use industries, such as lubricants, paints and coatings, cosmetics and pharmaceuticals, plastics, and polymers, is a major driver for the market. Castor oil derivatives are increasingly being used in high-performance lubricant manufacturing owing to their high stability at extreme temperatures and pressures. For instance, hydrogenated castor oil is used in aviation and racing oils. Additionally, sebacic acid finds applications in polyamides, plasticizers, adhesives, and lubricants. The cosmetics and pharmaceuticals industry utilizes castor oil derivatives as emollients, solubilizers, and emulsifiers. These growing applications across industries are expected to drive the market growth during the forecast period.
• Favorable properties of castor oil derivatives: Castor oil derivatives exhibit a unique combination of properties such as high thermal and hydrolytic stability, lubricity, dissolution ability, and hydrophobicity. These properties make them suitable for a wide variety of industrial applications. For instance, 12-hydroxystearic acid is used to manufacture soaps, lubricants, and cosmetics owing to its high purity and solubility. Ricinoleic acid derived from castor oil is used to produce nylon 11, which is used in 3D printing filaments. Dehydrated castor oil has strong hydrophobic properties, hence used as a feedstock for lubricant manufacturing. The multifunctional attributes of castor oil derivatives are driving their adoption, fueling the market growth.
• High use in bio-based products: The shift towards bio-based and sustainable products across industries is driving the growth of the castor oil derivatives market. Castor oil is a renewable resource obtained from castor seeds, making its derivatives suitable for the manufacturing of bio-based chemicals, materials, and products. For instance, companies are developing bio-based polymers from sebacic acid to replace conventional polymers. Ricinoleic acid obtained from castor oil is also used to produce bio-based nylon 11 and plasticizers. The high use of castor oil derivatives in bio-lubricants, biofuels, bio-plasticizers further drives the market growth.
• Capacity expansions: Key manufacturers in the castor oil derivatives market are expanding their production capacities to meet the growing product demand, in turn, fueling the market growth. For instance, in 2021, Arkema expanded its castor-based polyamide 11 powder production capacity. Jayant Agro Organics plans to triple its castor derivatives capacity. Several other manufacturers like Hokoku Corporation and Liaoyang Huaxing Chemicals are also expanding, which is expected to drive market growth during the forecast period.

Castor Oil Derivatives Market Opportunities

• Rising demand for bio-based lubricants: The increasing consumer demand for high-performance and eco-friendly lubricants is creating lucrative opportunities for bio-based lubricants manufactured from castor oil derivatives. Biodegradability, high stability, and lubricity make castor-derived lubricants suitable for eco-friendly formulations. For instance, a Germany-based company, Azelis offers castor-based lubricant additives. Key manufacturers are launching new bio-lubricant products based on castor oil derivatives to capitalize on this demand, thereby presenting significant growth opportunities.
• Increasing utilization in the plasticizers industry: Plasticizers such as DINCH are increasingly being manufactured using castor oil derivatives as an alternative to phthalate-based plasticizers, which are being phased out due to health concerns. DINCH offers high compatibility, stability, and good low-temperature properties, making it suitable for sensitive applications. Manufacturers, such as BASF and Perstorp, have dedicated production capacities for castor-based plasticizers. The rising demand for bio-based and non-phthalate plasticizers provides growth opportunities for castor oil derivative utilization.
• Growing use in cosmetic ingredients: Castor oil derivatives, such as PEG castor oils and hydrogenated castor oil, are increasingly being used as natural ingredients in cosmetic formulations owing to their emollient and solubilizing properties. Ricinoleic acid derived from castor oil is also used in lipsticks, foundations, eyeshadows, etc. as an effective stabilizer. The rising consumer demand for natural cosmetics provides an opportunity for increased use of castor oil derivatives. Companies are launching novel cosmetic ingredients based on castor oil and its derivatives to capitalize on this trend.
• Advancements in castor derivative technologies: Advancements in technologies, such as oleochemistry, plant genomics, and separation techniques, provide opportunities for extracting new castor derivatives with enhanced purity and advanced functionality. For instance, Arkema’s acquisition of Fixatti provides access to a patented technology to extract ricinoleic acid from castor oil. Manufacturers are also developing new derivatives like undecylenic acid using improved processes. Such technological advancements help obtain value-added castor derivatives, thereby expanding application areas and driving market growth.

Castor Oil Derivatives Market Trends

• Increasing online sales: A growing trend is the rising online sales of castor oil derivatives, especially through business-to-business platforms and web stores. Manufacturers are increasingly adopting e-commerce and digital channels for derivative sales. This allows easy access to information, price comparisons, flexibility, and convenience for buyers. Business customers can easily connect with castor derivative suppliers and place bulk orders. Consumer sales of derivatives like cosmetic ingredients also occur through web stores. The COVID-19 pandemic further accelerated the online buying trend. This rising popularity of online sales is an emerging trend in the castor oil derivatives market.
• Strategic partnerships and collaborations: Key manufacturers in the castor oil derivatives market are entering into strategic partnerships and joint ventures to enhance their product portfolio, expand production capacities, and gain access to growing markets. For instance, Wilmar International partnered with Archer-Daniels-Midland Company (ADM) in 2021 to produce specialty castor derivatives by combining their expertise and resources. Wilmar International Limited is a Singaporean food processing and investment holding company with more than 300 subsidiary companies. Founded in 1991, it is one of Asia's leading agribusiness groups alongside the COFCO Group. The Archer-Daniels-Midland Company, commonly known as ADM, is an American multinational food processing and commodities trading corporation founded in 1902 and headquartered in Chicago, Illinois.
• Shifting production to emerging economies: There is a shift in castor derivative production from Europe and North America towards emerging economies in Asia Pacific such as China, India, and Thailand. Abundant availability of castor seeds, coupled with lower labor costs in these countries allow cost-competitive manufacturing. Favorable government policies, efforts towards vertical integration, and investments in infrastructure also support production expansion. For instance, several major castor derivative facilities are located in China and India. Companies are also establishing new facilities in these regions. This shift of production activities is an important trend in the global castor oil derivatives market.
• Sustainability initiatives: Castor oil derivative manufacturers are increasing sustainability efforts through initiatives such as developing ecolabeled products, reducing carbon footprint, and waste management. Companies are expanding their portfolio of derivatives certified as bio-based or eco-friendly by certification bodies. For instance, Vertellus offers some castor-based products with United States Department of Agriculture (USDA) bio-based certification. Manufacturers are also minimizing waste generation through solvent-free processes, implementing circular models, and recycling initiatives. These sustainability practices are gaining prominence as an emerging trend in the market.

Castor Oil Derivatives Market Restraints

• Availability and price fluctuations of castor seeds: Castor seeds are the primary raw material for producing castor oil and its derivatives. However, the availability and prices of castor seeds fluctuate significantly depending on agro-climatic factors and yields. Droughts, floods or delayed rains can severely impact castor seed harvests and tighten supply. For instance, unfavorable weather conditions reduced India’s castor seed yields in 2021. The volatile castor seed prices directly influence the production economics of castor oil and derivatives. This raw material availability and pricing volatility restrains the growth of the castor oil derivatives market.

Counterbalance - Implement hedging strategies to navigate the price volatility of raw materials. Provide flexible pricing models to buyers based on long-term contracts. By employing these strategies, market players in the castor oil and derivatives Market can mitigate risk and restraints, fostering continuous growth and expanding their market share.

• Competition from substitute products: Castor oil derivatives compete with alternative products that offer similar functionality across end-use sectors. For instance, in lubricants and greases, castor oil derivatives compete with mineral oil-based and synthetic hydrocarbon-based alternatives. In cosmetics and coatings, castor oil derivatives face competition from silicone fluids, esters, and paraffin. The personal care sector utilizes natural oils like olive, coconut, and palm oil as alternatives to castor oil. The availability of such substitutes limits the adoption of castor oil derivatives in certain applications, thereby hampering the market growth.
• Complex manufacturing process: The production process of castor oil derivatives involves multiple complex steps such as hydrolysis, hydrogenation, distillation and purification under controlled conditions. The process requires high heat and pressure, specialized catalysts, maintaining oil moisture content, etc. which increases capital costs. The complex process know-how limits the number of manufacturers with commercial scale production capabilities. The need for technical expertise and high investments poses a barrier for small and mid-sized companies to enter the market, restricting widespread production.

Analyst’s Views

The castor oil derivatives market is expected to witness significant growth over the forecast period. Castor oil is widely used in manufacturing various derivatives like hydroxystearic acid, diamines, oxide derivatives, and others which find applications across industries like personal care, lubricants, and pharmaceuticals. The growing personal care industry globally is a key driver where derivatives like hydroxy esters are used in soaps, creams, and other skin care products. Additionally, the increasing demand for eco-friendly lubricants from industries like automotive and aviation will boost the hydroxide derivative segment growth. However, fluctuating supply and prices of raw materials like castor seeds can act as a restraint. Most castor oil production is concentrated in India and shifting cultivation practices impact steady supply. Furthermore, the availability of alternatives is increasing competition. The pharmaceutical industry in Asia Pacific, especially China, India, and Southeast Asian countries offers promising opportunities. Growth in the healthcare industry and focus on herbal medicines will surge the demand for derivatives like phosphates. North America is expected to remain the largest consumer due to the well-established personal care sector whereas Europe will witness stable growth on account of stringent regulations favoring green ingredients. In conclusion, while supply risks and alternatives pose challenges, the castor oil derivatives market will likely maintain positive momentum driven by increasing preference for eco-friendly products across industries especially in emerging nations.

Recent Developments

New product launches

• In January 2021, Arkema announced the launch of a new castor oil-based polyamide 11 resin for 3D printing. The material provides improved durability and chemical resistance. Arkema S.A. is a publicly listed, multi-national manufacturer of specialty materials, headquartered in Colombes, near Paris, France. It has three specialty materials segments; adhesives, advanced materials, and coatings.
• In March 2022, Stepan Company launched its NATSURÄ+Castor-Based Surfactants line. The biosurfactants are suitable for home and personal care applications. Stepan Company is a manufacturer of specialty chemicals headquartered in Northbrook, Illinois. The company was founded in 1932 by Mr. Alfred C. Stepan, Jr., and has approximately 2,000 employees. It is currently run by his grandson, Mr Quinn Stepan, Jr.
• In May 2020, Jayant Agro Organics launched hydrogenated castor oil grades suitable for hot melt adhesives and sealants. The new grades offer high melting point and low viscosity. JAOL Group's vision is to provide end-to-end solutions across the castor-based value chain to its customers. It firmly believes that great solutions are the result of inspiration, hard work, dedication, and team work - collaborative efforts to achieve greater synergy and success.

Acquisition and partnerships

• In September 2022, Emery Oleochemicals acquired Oleon, expanding its castor derivates portfolio. The acquisition strengthened its global position. Emery Oleochemicals is a leading global specialty chemicals manufacturer. It provides formulators and manufacturers with best-in-class renewable solutions recognized for their ability to improve processing efficiencies, deliver outstanding technical performance, and enhance environmental safety. Oleon is a leading producer of oleochemicals since the 1950s, specializing in converting natural fats and oils into a wide range of products. The company is part of Avril, a major agri-food group in France. Oleon's product portfolio includes fatty acids, glycerine, esters, dimers, technical oils, specialty oleochemicals, and biodiesel products. These products are used in various industries such as crop protection, cosmetics, industrial ingredients, lubricants, nutrition, and oilfield sectors
• In June 2021, Wilmar International partnered with ADM for the production and commercialization of specialty castor derivatives. The partnership enhanced their global castor capabilities. Wilmar International Limited is a Singapore-based food processing and investment holding company with more than 300 subsidiary companies. Founded in 1991, it is one of Asia's leading agribusiness groups alongside the COFCO Group.
• In December 2020, Arkema acquired Fixatti, gaining patented technology to extract ricinoleic acid from castor beans. The acquisition bolstered its bio-based chemicals business.

Figure 2. Global Castor Oil Derivatives Market Share (%), by Application, 2023

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Top Companies in the Castor Oil Derivatives Market

• Jayant Agro Organics
• ITOH Oil Chemicals Co. Ltd.
• Hokoku Corporation
• NK Proteins
• RPK Agrotech
• Taj Agro Products
• Adani Wilmar
• Kanak Castor Products Pvt. Ltd.
• Liaoyang Huaxing Chemical Co., Ltd.
• Gokul Overseas
• Thai Castor Oil Industries Co. Ltd.
• JayaLaxmi Castor Oil Pvt Ltd
• Girnar Industries
• Bom Brazil
• Enovel
• Castor International
• Hokoku Corp
• Arvalli Castor Derivatives Private Limited
• Khokhoil Qita Tukm Corp
• Shivam Castor Products (p) Ltd.

Definition: The castor oil derivatives market refers to the industry associated with the manufacturing of various chemicals and materials derived from castor oil. Castor oil is a vegetable oil obtained by pressing the seeds of the castor oil plant. Castor oil derivatives utilize the unique chemical structure of castor oil and are used in a diverse set of applications across industries such as lubricants, cosmetics, coatings, plastics, pharmaceuticals, and biodiesel. Key castor oil derivatives include hydrogenated castor oil, 12-hydroxy stearic acid, sebacic acid, undecylenic acid, and ricinoleic acid. The castor oil derivatives market comprises the manufacturers, suppliers, and end- sers of these castor oil-based products.

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