South african surfactant market forecast

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  • Surfactants MarketA South African Perspective

  • Executive Summary

    Analysis of the South African surfactants market

    Key areas of household detergents and cleaning surfactants are analysed

    Opportunities in the market exist

    Research & development is moderate to low mostly a case of companies

    using tried and tested methods from external markets

    Competition in the market it low room for improvement exists

    Key players in the market are addressed

    End user usage analysis with environmental regulations and general

    legislation addressed

    Current surfactants market in SA growing slowly Loadshedding has

    affected manufacturing industry with a knock-on effect

    Most surfactants are imported, with downstream products being

    manufactured locally

    Introduction Market Overview Market Structure Key Findings

  • Executive Summary

    Slowdown in manufacturing sector across the board

    Economic growth which is slowing as a result of frequent power outages is

    affecting industry growth

    Growth will remain steady in the medium term (2015-2019) until energy crisis

    is effectively remediated

    Specialty end user sector (mining) is decreasing as a result of lower global

    commodity prices

    Construction industry is experiencing moderate growth (~2% p.a)

    Household detergent and cleaning market will experience highest growth as a

    result of increasing urbanization and demand for improved hygiene (~4% p.a)

    Introduction Market Overview Market Structure Key Findings

    2015 2016* 2017* 2018* 2019*

    4% 4.1% 4.1% 4.5% 4.8%

  • Executive Summary

    Introduction Market Overview Market Structure Key Findings

    Anionic

    Cationic

    Nonionic

    Amphoteric

    Market

    Segment and

    Area of

    Application

    Household

    Detergents

    Industrial and

    Institutional

    Personal Care

    Specialty

    Product

    TypeApplication

  • Executive Summary

    SA surfactants market generated revenues of $188.2 million in 2014

    Anionic account for majority of the market share of which household detergents

    and cleaning accounted for 60% of the total market

    In 2014 personal care products and I&I accounted for 19 and 15%, respectively

    Introduction Market Overview Market Structure Key Findings

    66%

    18%

    13%

    3%

    SA Surfactants Market Share (2014)

    Household detergentsand cleaning products

    Personal care

    Industrial &Institutional

    Other (mining, paints,construction etc) 0

    0.5

    1

    1.5

    2

    2.5

    3

    3.5

    4

    4.5

    2015 2016 2017 2018 2019

    % g

    row

    th p

    er

    ye

    ar

    Year

    Household detergentsand cleaning products

    Personal care

    Industrial &Institutional

    Other (mining, paints,construction etc)

    Annual Surfactants Growth Rate (Predicted)

  • Aim & Objectives

    The aims and objectives of this report are as

    follows:

    To provide a brief overview of the South African

    surfactants market with a focus on household

    detergents and cleaning (key trends, market

    segmentation, drivers and restraints)

    To estimate the market size (demand) in US dollars for

    2014

    To project market growth (%) up to 2019

    To provide a competitive overview (current participants,

    structure, trends and other relevant information)

  • Scope & Definitions

    Real GDP growth rate in SA

    Rapid urbanization will lead to

    increased demand in FMCG

    sector

    Home and personal care

    manufacturing sectors

    expected to increase by 4% p.a

    Significant opportunity in

    Southern African region

    Geographic

    ScopeProduct Scope

    Application

    ScopeDefinitions

    2015 2016* 2017* 2018* 2019*

    2% 2.1% 2.2% 2.5% 2.9%

  • Scope & Definitions

    Anionic Surfactants

    Commercially most significant

    Household cleaning

    Institutional cleaners

    Cationic, amphoteric and non-ionic are less prevalent in

    the market

    SABS compliant

    Mature FMCG industry able to absorb supply

    Location of manufacturing facility

    Geographic

    ScopeProduct Scope

    Application

    ScopeDefinitions

  • Scope & Definitions

    Geographic

    ScopeProduct Scope

    Application

    ScopeDefinitions

    National Programme

    Steering Committee

    National

    Implementing Agency

    Coordination Team

    Implementing Partner Frost &

    Sullivan

    Surfactants Producer

    Customers FMCG Manufacturers

    Credit

    Providers

    Programme

    Advisory

    Committee

    Business

    Development

    Research &

    Development

    After Sales

    Service

  • Scope & Definitions

    BBBEE Broad Based Black Economic Empowerment An initiative by

    the South African government in response to criticism against Narrow

    Based Empowerment instituted in the country during 2003/2004 with the

    aim of uplifting ethnic groups marginalised by the apartheid regime

    LCA Life Cycle Assessment This is an environmental model to

    evaluate the effect a product has on the environment from cradle to crave

    (acquisition of raw materials to end of product life)

    SABS South African Bureau of Standards - leading global provider of

    standards, management systems, business improvement and regulatory

    approval information and is responsible for regulating the quality of South

    African goods and services

    Geographic

    ScopeProduct Scope

    Application

    ScopeDefinitions

  • Industry Best Practices

    Manufacturing processes are clearly defined and controlled

    Manufacturing processes are controlled, and any changes to the process are

    evaluated

    Instructions and procedures are written in clear and unambiguous language

    Training Ongoing and targeted training on issues ranging from allergen control,

    cleaning and sanitation procedures, incoming ingredient receipt protocol, and

    monitoring for employees, management, as well as suppliers

    Audits Periodic audits and inspections of facility and raw material suppliers either

    in-house or by third-party firms

    Documentation Documentation of training activities, raw material handling policies

    and activities, cleaning and sanitation, receiving records, and use of sign-off logs

    Validation/Evaluation Evaluation of training effectiveness and establishment of

    accountability, validation of cleaning through testing

    Processes are compliant with the necessary environmental (LCAs) and labour

    legislation

  • Market Analysis

    Manufacturing Production

    Introduction &

    Overview

    Industry

    Challenges

    Supply &

    Demand

    Drivers &

    Restraints

    Strengths

    -moderate growth rate

    -barriers to entry -high profitability and

    revenue -existing distribution and sales networks

    Weaknesses

    -high loan rates-investments in research and development

    -small business units-competitive market

    Opportunities

    -growing demand-income level is at a constant increase

    -new markets-new products

    -new acquisitions-growth rates and

    profitability

    Threats

    -government regulations

    -increasing costs-increase in labour

    costs-financial capacity

    2014 2015 2016* 2017* 2018* 2019*

    2.4% -2.4% -0.8% 2.1% 3.0% 3.2%

    Manufacturing Sales Growth

    2014 2015 2016* 2017* 2018* 2019*

    0.8% -3.1% -1.1% 0.5% 2.0% 2.9%

    Producer Price Inflation (PPI)

    2014 2015 2016* 2017* 2018* 2019*

    9.3% 3.4% 3.5% 3.9% 4.8% 4.8%

  • Market Analysis

    Perennial constraints regarding the

    security of electricity supply and

    increased costs incl. water

    Influx of incentivised and cheap

    imports

    Labour unrest

    Fluctuating exchange rates and

    weakening Rand

    Slowdown in manufacturing sector

    Disjointed trade policy and

    administration

    Introduction &

    Overview

    Industry

    ChallengesSupply &

    Demand

    Drivers &

    Restraints

  • Market Analysis

    Introduction &

    Overview

    Industry

    Challenges

    Supply &

    Demand

    Drivers &

    Restraints

  • Market Analysis

    Introduction &

    Overview

    Industry

    Challenges

    Supply &

    Demand

    Drivers &

    Restraints

    Driver/

    Restraint

    Micro Trends Short term

    (1-2 years)

    Medium term

    (3-5 years)

    Long term

    (6-10 years)

    Driver Consumer market growth is being spurred on by:

    - Economic growth

    - Retail expansion

    - Middle class growth & income

    - Population growth

    Driver Limited availability of ingredients (Raw materials are mostly

    imported)

    Driver Mature end user product manufacturing industry

    Restraint Increased contract manufacturing as a result of increasing

    manufacturing costs

    Restraint Environmental and health concerns

    Restraint Multifunctional product base (Large divide between rich and

    poor in society)

    ModerateHigh Low

  • Financial Analysis

    Revenue

    ForecastMarket Forecast

    Supply Chain

    Analysis

    Competitor

    Activity