Competitive Dynamics Favor Ample Opportunities in the U.S. Janitorial and Housekeeping Cleaning Products Market, Says Kline

Competitive Dynamics Favor Ample Opportunities in the U.S. Janitorial and Housekeeping Cleaning Products Market, Says Kline

PARSIPPANY, NJ, October 27, 2010 – Consumption of janitorial and housekeeping cleaning products by commercial and institutional facilities in the United States have reached an estimated $3.6 billion in end-user dollars in 2010. The market has been affected by the economic recession, but is forecasted to grow by an average annual rate of 3.5% to reach more than $4.2 billion in 2015, according to a recent study Janitorial and Housekeeping Cleaning Products USA 2010: Market Analysis and Opportunities from worldwide consulting and research firm Kline & Company.

Reduced cleaning and maintenance budgets challenged facilities into cutting costs and services. The floor care business has flattened as facilities economize by reducing the frequency of waxing and stripping floors. More durable coatings and new low-maintenance floor substrates allowing fewer floor-maintenance requirements have reinforced the trend.

High sales in the hand care category have helped carry the industry during the past couple of years. Stoked by health concerns following the H1N1 virus outbreak, and by the heightened awareness of the importance of effective hand hygiene, the market has seen a surge in demand for instant hand sanitizers. Hand care is projected to continue in a steady growth over the next five years, however, at rates lower than those of peak growth in 2009.

Sustainability is a preoccupying theme in the industry, leading to increased marketing of environmental lines. Nowadays, end users demand that products be cleaner, greener, and safer, as well as affordable. More than half of the respondents in Kline’s study reported having green cleaning programs, indicating that green cleaning is a widely embraced practice. Many of these programs utilize dilution and dispensing systems. Regarded as environmentally friendly, and ensuring that chemical manufacturers’ ship concentrates, not water, in the right sized packages, these programs have been on the market for decades.

Contract cleaners are the leading end-use segment on the market. Other major segments are retail hosts, industrial facilities, healthcare, education, and lodging.

There is notable merger and acquisition activity in the market. However, despite advancing consolidation, the market remains less contracted than other related cleaning chemicals markets.

“The market for janitorial chemicals is large, and the supplier and distributor bases are variegated, which infuses the market with strong competitive dynamics,” explains Bruce Boynick, Senior Associate at Kline. There are major suppliers like Diversey, Ecolab, GOJO and Spartan, but the industry overall exhibits only moderate concentration, affording ample opportunities for a broad array of competitors, including full-line suppliers, commercial marketers of household brands, and private brands of distributors.

Janitorial and Housekeeping Cleaning Products USA 2010: Market Analysis and Opportunities provides a complete qualitative and quantitative analysis of janitorial and housekeeping product categories and end-use markets, industry dynamics, and key trends. It includes data on all end-use segments, including industrial facilities and office buildings, hospitals, lodging establishments, nursing homes, schools, recreational facilities, fast food restaurants, full-service restaurants, colleges and universities, and government facilities. The study also covers building service contractors, on-site dilution/dispensing systems, private labeling, and distribution channels.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.

Nonprescription Drugs Cost Structures Fluctuate with Increased Cost of Goods, according to Kline

Nonprescription Drugs Cost Structures Fluctuate with Increased Cost of Goods, according to Kline

--Advertising expenses were reduced to offset higher cost of goods costs; however, other nonprescription drug manufacturing and marketing costs increased. --

Parsippany, NJ, October 20, 2010 –A number of costs associated with nonprescription drug manufacturing and marketing have increased over the past two and a half years. Certain material costs for plastic bottles and blister packs have risen by double digits during this time, increasing packaging expenses. Advertising and marketing expenses continue to represent the largest cost components, although the majority of marketers reduced advertising costs in 2009, and in the first half of 2010, according to data from recently published OTC Drugs: U.S. Competitor Cost Structures 2010 by worldwide consulting and research firm Kline & Company.

In 2008 operating margins declined as many marketers increased advertising expenses, in 2009, advertising spending decreases to improve the operating margins for most marketers. The average advertising expenses, excluding Perrigo, are estimated at 25.1% and 21.0% of net sales in 2008 and 2009, respectively.

On average, marketers in the OTC industry spend about 32.7% of net sales on cost of goods (COGS), 41.9% on marketing, and 8.8% on other expenses including R&D and administration, leaving an operating margin of about 16.6% in 2010. The average gross margin for the first half of 2010 is estimated at 67.3% of net sales, with Novartis and Merck registering the highest gross margins in the industry. Taking all line items and costs into account, Pfizer, Novartis, and Procter & Gamble register the highest operating margins of the profiled companies.

“Essentially, over the past few years COGS are up. So companies have reduced marketing expenses as a way to try and offset increased COGS; however, not by enough to maintain margins of the past” notes Laura Mahecha, Industry Manager at Kline’s Healthcare Practice. In 2005, COGS was at approximately 28%, and in 2010, COGS are estimated at nearly 33% of net sales and much of this was driven by higher raw material and packaging costs.

Most branded marketers continue to increase promotional spending and the frequency of activities and adopt different promotional techniques such as in-store promotions, in-store radio advertising, and customized displays. Many companies have spent less on advertising and more on promotions as a way to attract cost-conscious consumers. “During the recession, when consumers are so cost conscious, these promotions can help to close the price gap between national brands and private-label OTCs,” adds Mahecha.

Prices of oil and other raw materials and packaging components have increased, driving up production and distribution costs for OTC marketers significantly. The decreased availability of resins has caused costs of packaging materials to increase by 10-15% since 2007. There is little room for improvement in cost structures of most branded companies, apart from international sourcing of raw materials from countries including China and India. Marketers are now trying to consolidate the presence of their suppliers outside the United States to realize cost savings.

Over the next five years, market leaders will continue to support their most important brands with line extensions and extensive promotional support. Advertising support through widely accepted Internet media will be required for any new product introductions. Major OTC marketers will focus on the introduction of innovative products, with targeted marketing and advertising, and efficiencies that will lead to reduced costs. Positioning brands globally will maximize efficiency, reduce costs, and increase profit margins.

Kline's OTC Drugs: U.S. Competitor Cost Structures 2010 report presents information on the financial performance, profitability, and costs structures of the ten leading OTC companies in the United States for 2008, 2009, and the first half of 2010. It is designed to help OTC pharmaceutical companies benchmark their cost structures with those of their competitors.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.

India Holds the Potential for Becoming a Major Consumption Market for Personal Care Ingredients, Anticipates Kline

India Holds the Potential for Becoming a Major Consumption Market for Personal Care Ingredients, Anticipates Kline

PARSIPPANY, NJ, October 14, 2010 – In 2009, the market size for specialty personal care ingredients in India was estimated at over 33,000 tonnes. Price sensitivity of the Indian personal care consumers contributed to the slow industry growth in the past; however, thriving demand for products with better functional benefits is expected to bring about a significant change. The personal care ingredients volume growth rate between 2010 and 2014 is expected to reach 9.6% over the four-year period, according to the research Personal Care Ingredients 2010: India Market Analysis and Opportunities, by worldwide consulting and research firm Kline & Company.

As steadily increasing disposable income levels continue to change the spending habits of the country’s sizable population, and awareness for new formulations grows, India has the potential to become one of the major consumption markets for personal care ingredients. The highest volume growth is expected for emollients, with a projected 11.3% increase by 2014. The addition of UV protection to skin products has also seen a popularity boost, establishing UV absorbers among the most rapidly expanding product categories.

India’s personal care industry is characterized by high volumes and low prices of cosmetic products. Many traditional commodity chemicals, including sodium lauryl sulfate and sodium lauryl ether sulfate, are used in formulations. There has been less demand for specialty chemicals and the majority of existing demand remains satisfied through imports. However, an increasing number of personal care products now incorporate specialty ingredients in their formulations. Among specialty ingredients, specialty surfactants are the leading product category, followed by conditioning polymers, accounting for a combined volume market share of over 40%.

Most of the personal care ingredients segments in India are dominated by few companies. In the case of surfactants, the top three competitors hold nearly three-quarters of the total market volume. In contrast, segments which focus on applications in skin and hair care are fragmented because of the required expertise and different compositions pertaining to the chemicals.

Galaxy Surfactants emerged as a key player in the Indian personal care ingredients industry. The overall market is divided among six main players accounting for about 44% of the market. The remainder comprises smaller regional players and imports from other countries.

A series of mergers and acquisitions have been shaping the market. In June 2010, BASF announced the acquisition of German cosmetics ingredients major Cognis. While Cognis does not operate manufacturing plants in India, the company contributes an appreciable customer base, particularly for emollients and surfactants. Furthermore, Galaxy Surfactants has acquired Tri-K Industries and its subsidiary Maybrook in the United States.

“The impact of the recession on Indian personal care ingredients companies has been minimal,” says Anna Ibbotson, Industry Manager of the Chemicals & Material practice at Kline. “This is because domestic suppliers have been focusing on the Indian market and did not have significant exposure to U.S. and EU markets,” she explains. The competitiveness factor has, nevertheless, increased, as several global players including ISP, Clariant, DSM, Croda, and BASF have tapped in on the market.

Complementing our Global Personal Care Ingredients Database, Personal Care Ingredients 2010: India Market Analysis and Opportunities focuses on the Indian market and is designed to assist suppliers to understand key dynamics operating within each key product segment. The base year for this program is 2010 and it also includes forecasts to the year 2015.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.

Disparities in Regional Growth Characterize the Recovery Outlook for European Synthetic Latex Polymers, According to Kline

Disparities in Regional Growth Characterize the Recovery Outlook for European Synthetic Latex Polymers, According to Kline

PARSIPPANY, NJ, October 12, 2010 – Although the market for synthetic latex polymers in Europe is expected to grow at a modest CAGR of 0.9% through 2014, it continued to demonstrate a declining trend in 2009 due to significant contraction in major end-use markets. The total market was estimated at 2.5 million dry tonnes in 2009, according to latest report Synthetic Latex Polymers 2009-2010 Global Series: Business Analysis and Opportunities from worldwide consulting and research firm Kline & Company.

The impact of the recession on key end-use markets has sent the demand for synthetic latex polymers into an overall decline; however, regional response to the financial downturn has not been uniform. Whereas the effects of the crisis have been more severe among the economies of Western Europe, several new Eastern European EU member states have seen less negative impact.

The largest consumers of latex polymers in Europe are paper and paperboard applications, followed by paints and coatings. Together, they represent approximately 49% of the overall market. Highest in demand are acrylics and SB latex, constituting about 66% of sales in terms of volume.

“Among actions taken to overcome the protracted recession were capacity utilisation rate reductions and plant closures that have cut supply, while the most agile suppliers have worked to improve efficiency and economies of scale,” comments Anna Ibbotson, Industry Manager at Kline’s Chemicals & Materials practice.

Industry activities such as Dow’s acquisition of Rohm & Haas in Europe boosted Dow’s sales capacity by about 30%, mostly in the paints/acrylics line. BASF doubled its styrene butadiene production with the acquisition of CIBA, a move that not only added to BASF’s capacity, but also consolidated supply to the paper industry. This acquisition activity is expected to significantly reshape the competitive landscape in the future.

Also pertinent are environmental and safety regulations, which will become increasingly stringent. The Biocide Product Directive and low-VOC regulation promote the use of water-based formulations, and aldehyde-free and plasticizers-free latex. Regulations favor VAE-based products, since this polymer type satisfactorily meets prescribed performance and environmental criteria. Applications utilizing these polymer types, including printing inks, construction, paints, and coatings, are likely to expand faster than other end-use applications, averaging annual growth rates of around 2% over the next four years.

With much of the synthetic latex polymers end-use markets tied directly to GDP through the manufacturing and construction industries, the outlook is promising. The International Monetary Fund (IMF) predicts a 1% growth in European GDP through 2012. Therefore, demand for synthetic latex polymers is expected to recover and reach 2007 levels before 2012. Faster recovery rates are expected in the Eastern Europe region. However, the outlook for the demand for synthetic latex polymers in some end-use industries is uncertain and even negative.

For example, the European paper and paperboard industry has suffered overcapacity issues, raw material price volatility, and increased pressure from Asian competitors. “If overcapacity levels remains high and paper demand continues to decline, further capacity curtailments can be expected to take place in 2011, negatively affecting overall demand for synthetic latex polymers,” adds Sharbel Luzuriaga, Kline’s senior consultant for synthetic latex polymers European research.

Synthetic Latex Polymers 2009-2010 Global Series: Business Analysis and Opportunities provides a detailed, independent appraisal of the global market for synthetic latex polymers. The reports include current and forecast demand by major product and end-use industry, product grades and prices, applications, distribution channels, supplier sales, and technical and market trends. Manufacturing economics will also be analyzed for selected synthetic latex polymers.

Shell Leads Global Finished Lubricant Market Four Years Running, According to Kline

Shell Leads Global Finished Lubricant Market Four Years Running,According to Kline

PARSIPPANY, NJ, September 23, 2010 – Despite the negative impact of the 2008-2009 recession on the global consumption of lubricants, Shell has managed to retain its position as the global market share leader for the fourth consecutive year. The energy market front-runner accounts for 13.4% of all finished lubricant sales, according to latest study Global Lubricants 2009: Market Analysis and Assessment from worldwide consulting and research firm Kline & Company.

Shell outperforms ExxonMobil and BP, which rank in second and third place with 11% and 7% of global market share, respectively. Chevron, Total, and Petro-China follow. Kline’s report estimates global lubricant demand in 2009 at 35 million tonnes. This significant decline of 8.4% over the previous year follows the 2.6% decline the industry experienced between 2007 and 2008.

As predicted by Kline, the impact of the global recession has been less severe in the Asia-Pacific region. This region has continued to show the most robust growth on a volumetric basis, and now accounts for 39% of the total global market. This trend, which has seen Asia-Pacific become an increasingly significant global market player, is likely to prevail as China and India are expected to continue to be the growth engines for the lubricants industry in the future.

On the other hand, the United States is among those markets most severely curtailed by the economic downturn, experiencing a double-digit decline in 2009. With a 22% share of global lubricant sales, it maintains the position of leading country market. However, maintaining this position will depend heavily on the ability of the United States to stabilize and recover from the effects of the economic downturn and adapt to the changing dynamic in the market.

A range of developments will be shaping the global demand for lubricants. Integral to any robust market revival is the pace of recovery from the recession. Also crucial will be the ability of market players to adapt to evolving demands for lubricant performance levels and specifications dictated by original equipment manufacturers; technological expertise has, and will increasingly be a key differentiator. The changing competitive landscape, channel shifts, and raw material availability will require effective strategies from participants at all levels of the supply chain to ensure consumer loyalty.

“There is an ancient Chinese proverb which translates as, ‘May you live in interesting times,’” recalls Geeta Agashe, vice president of Kline’s Energy practice, when assessing the situation in the global lubricants market. “In this industry, there is no shortage of significant changes that we are blessed with.”

Global Lubricants 2009: Market Analysis and Assessment provides a detailed analysis of the global automotive and industrial lubricant industry segments and the players who participate in them. It combines regional market analyses into a comprehensive program to provide finished lubricant formulators, additive and basestock suppliers, and end users with the latest information on products, services, applications, and trends.

Re-refined Basestocks Reach Par with Virgin Basestocks, but Many Issues Still Hinder Industry Growth, Reveals Kline

Re-refined Basestocks Reach Par with Virgin Basestocks, but Many Issues Still Hinder Industry Growth, Reveals Kline

PARSIPPANY, NJ, September 21, 2010 – Globally, about 69% of the finished lubricant demand is converted into used oil. Of the total used oil collected, 78% is consumed as industrial fuel and 16% is re-refined, finds recently released study Global Used Oil 2009: Market Analysis and Opportunities from global consulting and research firm Kline & Company.

Following significant technological advances in the last 10 years, the re-refining industry has reached a stage where it can produce re-refined basestocks on par with virgin basestocks. Awareness of the quality of re-refined lubricants is spreading among a growing band of end users; however, this perception is not nearly universal and customer hesitance due to perceptions of poor quality and inconsistent supply still prevents a larger-scale industry growth.

Used-oil collection and disposal rates differ significantly across countries, and even by states and municipalities. Although used oil collection regulations exist in most countries, varying levels of enforcement and incentives mean that, globally, of the total used oil generated, only about 74% is collected. The remaining 26% is combusted, re-used without appropriate treatment, or discarded.

The front runner of the re-refining industry is Europe. Thanks to strong regulation and enforcement, nearly 90% of all used oil is collected, and 50% of this is sent to re-refining. As a result, re-refined basestocks at present account for 13% to 15% of the overall basestock supply in the region.

Influencing the utilization of used oil are the economic values of different disposal options. North America’s collection rates are comparable to those of Europe; however, more than 80% of the used oil collected is used in various fuel applications, while only about 12% is sent to re-refining. It is considerably cheaper and less complicated to prepare used oil for fuel applications.

With the exception of Brazil, where strong regulation favors re-refining, collection rates are low in other parts of the world—about 60% to 70% of the total, in comparison to 85% to 90% in Europe and North America. Furthermore, of the total oil collected, a significant portion is used as fuel, whereas re-refining accounts for a small percentage.

There are three key drivers for growth in the re-refining industry. First, growing virgin basestock prices due to high costs of crude oil have increased interest in re-refined basestocks. Second, improvements in re-refining technology have dramatically enhanced the quality of re-refined basestocks, allowing them to be used in blending of a growing range of lubricants. Third, regulation in Europe, and increasingly in North America, favors re-refining.

However, to achieve its potential, the re-refining industry will have to deal with a number of challenges. Chief among these are negative customer perceptions. End users who have no experience with re-refined basestocks equate them with poor quality, sub-standard, and adulterated products. They also tend to club all re-refining technologies and re-refined basestocks into one category. This hurts re-refiners who use advanced technologies to produce high quality basestocks. “Therefore, these companies need to set themselves apart from other re-refiners,” notes Milind Phadke, industry manager at Kline’s Energy practice. “This issue is particularly important in Asia, Africa, and in other low-cost markets where re-refined basestocks are equated with sub-standard, adulterated, and spurious products.”

Another challenge is the industry’s lopsided regional development. Re-refining has a significant presence in Europe and a growing presence in North America. In other parts of the world, however, it is practically non-existent. As the re-refining capacity in Europe has grown, the competition for the purchase of used oils and sales of re-refined basestocks has increased, much to the detriment of the industry. Also, to be able to market to global lubricant marketers, re-refined basestocks need to be available in a few standard specifications in all parts of the world. At present, this is not the case.

Global Used Oil 2009: Market Analysis and Opportunities is a comprehensive analysis of the global used oil market. It helps to understand the drivers in the used oil market and the opportunities and threats represented in this market to participating businesses.

To hear more about the global used oil market, listen to Milind Phadke’s Global Used Oil 2009: Market Analysis and Opportunities Webinar. Please contact Vera Sandarova at vera.sandarova@klinegroup.com to access this recording.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries for over 50 years. For more information, visit www.KlineGroup.com.

Personal Care Ingredients Market in the United States Forecast to Grow at a CAGR of 2.2% through 2014, According to Kline

Personal Care Ingredients Market in the United States Forecast to Grow at a CAGR of 2.2% through 2014, According to Kline

LITTLE FALLS, NJ, AUGUST 24, 2010 – Demand for personal care ingredients in the United States is driven by a stable consumption of personal care products, and increased consumer awareness of products with skin protection benefits such as anti-aging and sun care. The market posted 3% growth since 2005, and is forecast to grow further at a CAGR of 2.2% through 2014 according recently released study Global Personal Care Ingredients 2010: Market Analysis and Opportunities, by worldwide consulting and research firm Kline & Company.

The total market for personal care ingredients in the United States is estimated at 355 million lb in 2009. It is the second largest market for personal care ingredients behind Europe. Conditioning polymers are the leading product category followed by surfactants constituting a market share of about 32% and 23%, respectively, by volume. Alkyl polyglucosides (APG) or so-called “green” surfactants that are plant-derived augmented by increasing environmental awareness and consumer demand exceeded the growth of traditional surfactants by over 2% in 2009.

Spurred by growing consumer awareness, the natural personal care end product market has persevered through the recession registering a healthy 8% sales gain in 2009 in the United States. Natural ingredients benefited from a strong demand for natural products, capturing a small but increasing growth in their sector. “Although there is still perceived issue with performance of natural ingredients prohibiting their usage in many formulations,” notes Anna Ibbotson, Industry Manager, Chemicals & Material practice at Kline,” the opportunities for growth surpass those more traditional ingredients, creating a forum for innovation.”

Hair fixative polymers and conditioning polymers are the most consolidated categories with the top three players constituting for more than 75% of the overall market. The top 10 players in the U.S. market account for about 65% of the total market across all product categories covered in the report.

The overall market share is split among the leading five players accounting for about 43% of the market. Due to various levels of consolidation, this figure may soon change.

In June 2010, BASF announced plans of acquiring Cognis which would enable BASF to become the leading player in the personal care market, globally. The acquisition is an ideal fit for BASF as Cognis is strong in emollients, emulsifiers, and surfactants markets where BASF has had limited exposure. Some of the other recent M&A activity in the personal care industry has been Dow’s acquisition of Rohm and Haas, BASF’s acquisition of Ciba, Rhodia’s acquisition of McIntyre, and Galaxy Surfactants’ acquisition of Tri-K Industries.

Global Personal Care Ingredients 2010: Market Analysis and Opportunities includes a comprehensive database, as well as market reports on specific product categories across all major regions. These reports will provide key trends by application, market developments, and highlight business opportunities, while the online database will provide:

  • Consumption of key personal care ingredients by application and region
  • Supplier sales by ingredient type, application, and region
  • Average market pricing of ingredient by region
  • Forecast consumption of ingredients within a five-year timeframe

The European Personal Care Ingredients Market Shows Recovery in Sales in the First Half of 2010, according to Kline

The European Personal Care Ingredients Market Shows Recovery in Sales in the First Half of 2010, according to Kline

LITTLE FALLS, NJ, AUGUST 17, 2010 – The European personal care ingredients market experienced continued growth in the last few years despite the negative effects of the slow economy, reveals Global Personal Care Ingredients 2010: Market Analysis and Opportunities, a recently published study by worldwide consulting and research firm Kline & Company.

The personal care ingredients market outperformed most other end-use industries in which specialty chemicals suppliers are active. Fueled by a relatively stable consumption of cosmetics and toiletries during the crisis, the market is expected to recover quickly, as indicated by a sharp rebound in sales in the first half of 2010, and is anticipated to continue to increase at an annual volume growth rate of 2.6% until 2014. While traditional ingredients will take advantage of this upturn, the largest growth expected is in the “green” product area.

Specialty surfactants, conditioning polymers, and emollients are the leading product categories in the market, representing 23%, 18%, and 16%, respectively, of a $1.74 billion total. Furthermore, boosted by increased consumer awareness about sun exposure side effects, the use of UV absorbers has extended to an increasing number of skin care products, and they now rank among the most rapidly growing markets.

Most of the personal care ingredient segments are dominated by a few large companies. This is particularly evident in the case of hair fixative polymers, where the top three competitors hold 87% of the total market volume. In contrast, in segments which cover a broader range of applications, such as skin and hair care, the supplier base is more fragmented as the ingredients are widely varied.

The personal care ingredients supplier basis is continuously concentrating, and the recent acquisition of Cognis by BASF confirms this trend of convergence in the industry. Key suppliers are trying to be present in most market segments to represent a one-stop-shop for cosmetics and toiletries formulators.

“After a difficult period when price was the key purchasing criteria, the return of innovation as a key buying factor for formulators will create an opportunity for suppliers to develop more added values and take market shares from established products,” comments Anna Ibbotson, industry manager at Kline’s Chemicals & Materials practice.

Global Personal Care Ingredients 2010: Market Analysis and Opportunities includes a comprehensive database, as well as market reports on specific product categories across all major regions. These reports will provide key trends by application, market developments, and highlight business opportunities. The online database will provide the following:

  • Consumption of key personal care ingredients by application and region
  • Supplier sales by ingredient type, application, and region
  • Average market pricing of ingredient by region
  • Forecast consumption of ingredients within a five-year timeframe

The Market for Synthetic Latex Polymers Shrank, but is Expected to Grow at a CAGR of 2.4%, Suggests Kline’s FutureView Scenario

The Market for Synthetic Latex Polymers Shrank, but is Expected to Grow at a CAGR of 2.4%, Suggests Kline’s FutureView Scenario

LITTLE FALLS, NJ, August 3, 2010 – North America consumed nearly 6 billion pounds of synthetic latex polymers in 2009 following a double-digit decline from 2008, according to latest report Synthetic Latex Polymers 2009-2010 Global Series: Business Analysis and Opportunities from worldwide consulting and research firm Kline & Company. The U.S. market accounted for 92% of the volume. The total number for synthetic latex polymers in the United States is estimated at 5.3 billion dry pounds in 2009.

All-acrylics and SBR account for the major share in North America, with over 75% of latex consumption. Paints and coatings, followed by paper and paperboard, are the leading applications in North America, constituting about 49% of the overall market. The recession has affected the housing and building industry, which has changed the demand for synthetic latex polymers in key end-use applications.

Dow, BASF, and Omnova are the leading players for synthetic latex polymers in North America, with a combined market share of about 54%. “Although only three companies account for just over half the volume share, there is still potential for manufacturers to grow in this market through targeting specific applications,” notes Anna Ibbotson, industry manager at Kline’s Chemicals & Materials practice. “For example, gloves or developing technology for more niche sub-segments of the major applications.”

The synthetic latex usage, especially in paints and coatings applications, is driven by the regulations and mandates such as low VOC or aldehyde content. Additionally, there is an increasing awareness among end users with regards to “green” and “sustainable products.” For instance, vinyl acetate-ethylene (VAE) has benefited from the trend due to good environmental credentials as phthalate plasticizers are not needed in VAE-based formulations. VAE has also a reduced need for co-solvents in the formulation of water-based emulsions for the paints, coatings, adhesives and sealants industries.

The acquisition trend has been ongoing since the early 2000s. Synthetic latex polymer manufacturers are seeking economies of scale as margins weaken due to key industries moving to Asia, or other emerging markets in a bid to reduce costs. Dow’s acquisition of Rohm and Haas in Europe boosted Dow’s sales capacity by about 30%, mostly in the paints/acrylics line. BASF doubled its styrene butadiene production with the acquisition of CIBA. Some of the most recent cases are Hexion Specialty Chemicals, Inc., and Shanxi Sanwei Group Co., Ltd. announcing the formation of a joint venture in April 2010. In January 2010, Arkema completed the acquisition of Dow’s acrylic monomers and acrylic latex polymers in North America.

With much of the synthetic latex polymer end-use markets tied directly to GDP, the market for synthetic latex polymers is expected to grow at a CAGR of 2.4% through 2014. The markets for synthetic latex polymers are expected to recover and reach 2007 levels no earlier than 2011-12.

Synthetic Latex Polymers 2009-2010 Global Series: Business Analysis and Opportunities is a detailed, independent appraisal of the global market for synthetic latex polymers that includes current and forecast demand by major product and end-use industry, product grades and prices, applications, distribution channels, supplier sales, and technical and market trends. Manufacturing economics will also be analyzed for selected synthetic latex polymers. This edition will include extended coverage of the European market, and an online database containing historic data from 1978.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries over 50 years. For more information, visit www.klinegroup.com.

Kline’s New Research on the Implications of Climate Change on Agribusiness

Kline’s New Research on the Implications of Climate Change on Agribusiness

LITTLE FALLS, NJ, July 19, 2010 – Kline & Company, a worldwide consulting and research firm, announced a groundbreaking new research initiative designed to gather research on climate change and its implications for agribusiness companies in the U.S. region.

The first edition of Implications of Climate Change on Agribusiness 2010: U.S. Analysis is designed to help marketers with the essential long range planning in today’s investment-heavy agricultural sector. Whether one believes that climate change is man-made or naturally occurring, it is clear that climate is changing and if it continues, agricultural production will be affected. For example:

  • The 10 years between January 2000 and December 2009 were the warmest since records began 130 years ago.
  • The incidence of extreme events such as droughts and storms has been much more frequent.
  • At the same time, it is predicted that agricultural output will have to increase by 70% to feed the 9.1 billion global population by 2050, putting added pressure on existing crop land.

If the current trends continue, climatic factors will alter where crops are produced and perhaps what crops are produced. The effects of these changes will vary regionally, but warmer temperatures, longer growing seasons, and higher carbon dioxide levels are likely to favor certain pathogens, insects, and weeds.

These changes could in turn affect suppliers to agriculture in many ways: land use may change, weed and pest complexes could be altered, seed attributes or use patterns are modified, and fertilizer and equipment are translocated.

“It is not axiomatic that these trends will continue, but constructing scenarios as if they were, and perhaps making strategic investments at a low risk level as if they were, should be part of every Ag input company’s strategic planning process,” notes Dennis Fugate, Industry Manager, Specialty Pesticides at Kline.

This report will help business planners and executives think through potential problems and opportunities inherent in climate change. It is an invaluable resource for crop-based research presentations and implications to develop a deeper understanding of potential crop geographic shifts and qualitative scenarios that can be drawn from the information.

Implications of Climate Change on Agribusiness 2010: U.S. Analysis will focus on the potential results suggested by the research and the implications for agribusiness if the observed trends continue. It will take a closer look at the impact of changing temperature on insect pests, plant pathogens, and weeds.

About Kline
Kline is a worldwide consulting and research firm dedicated to providing the kind of insight and knowledge that helps companies find a clear path to success. The firm has served the management consulting and market research needs of organizations in the chemicals, materials, energy, life sciences, and consumer products industries over 50 years. For more information, visit www.klinegroup.com.