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Johannesburg - The local market for bio-renewable chemicals is expected to reach $118.4m in revenue in 2016, from $75.7m in 2009, growth partnership company Frost & Sullivan said on Thursday.
New analysis from Frost & Sullivan said the South African bio-renewable chemicals industry is in an emerging market stage, with a number of local end-user companies such as paper and pulp investing in biomass-to-energy projects.
This, it said, is expected to stimulate investment and growth in the industry.
Currently, the local market is dominated by imports from multinationals or local subsidiaries of international companies, it said.
"The global market for bio-renewable chemicals has been drastically transformed by the influence of environmental restrictions from the Stockholm and Rotterdam Conventions," said Frost & Sullivan's chemicals, materials and food industry analyst, Laura Peinke.
"This has had a knock-on effect on the local market, even as looming deadlines for environmental change are set to impact the South African market."
The change has come about quickly, particularly since South Africa has a large abundance of natural feedstocks from the sugar and paper and pulp industries.
These feedstocks include cellulose, starch and glycerol, all byproducts of manufacturing and agro-processing industries, the group said.
Since the South African market is still considered young, it is classified as an emerging market. It is therefore projected to experience intermediate to high growth of about 6% until 2016.
The firm said that the biggest restraint in the local market for bio-renewable chemicals is the dominance of long-established multinationals that have made imports into South Africa.
This, coupled with the high capital requirements of the bio-refinery infrastructure, has discouraged local companies from entering the market, it said.
"Evidence of this is that the only local investments in biomass-to-energy have been in conjunction with government projects and with multinational subsidiaries in the local market," said Peinke.
Frost & Sullivan said that the government and major chemical companies such as Sasol [JSE:SOL] and Omnia Holdings [JSE:OMN] are essential in supporting local market development and promoting the uptake of bio-renewable chemicals.
Companies - including Tongaat Hulett [JSE:TON] and Illovo Sugar [JSE:ILV] - have already started producing downstream products in the bio-renewable chemicals industry, it said.
"Suppliers and industry regulators - such as the Chemical and Allied Industry Association and development finance corporations - will be crucial to local market development, especially if interventions are enforced," Peinke said.
New analysis from Frost & Sullivan said the South African bio-renewable chemicals industry is in an emerging market stage, with a number of local end-user companies such as paper and pulp investing in biomass-to-energy projects.
This, it said, is expected to stimulate investment and growth in the industry.
Currently, the local market is dominated by imports from multinationals or local subsidiaries of international companies, it said.
"The global market for bio-renewable chemicals has been drastically transformed by the influence of environmental restrictions from the Stockholm and Rotterdam Conventions," said Frost & Sullivan's chemicals, materials and food industry analyst, Laura Peinke.
"This has had a knock-on effect on the local market, even as looming deadlines for environmental change are set to impact the South African market."
The change has come about quickly, particularly since South Africa has a large abundance of natural feedstocks from the sugar and paper and pulp industries.
These feedstocks include cellulose, starch and glycerol, all byproducts of manufacturing and agro-processing industries, the group said.
Since the South African market is still considered young, it is classified as an emerging market. It is therefore projected to experience intermediate to high growth of about 6% until 2016.
The firm said that the biggest restraint in the local market for bio-renewable chemicals is the dominance of long-established multinationals that have made imports into South Africa.
This, coupled with the high capital requirements of the bio-refinery infrastructure, has discouraged local companies from entering the market, it said.
"Evidence of this is that the only local investments in biomass-to-energy have been in conjunction with government projects and with multinational subsidiaries in the local market," said Peinke.
Frost & Sullivan said that the government and major chemical companies such as Sasol [JSE:SOL] and Omnia Holdings [JSE:OMN] are essential in supporting local market development and promoting the uptake of bio-renewable chemicals.
Companies - including Tongaat Hulett [JSE:TON] and Illovo Sugar [JSE:ILV] - have already started producing downstream products in the bio-renewable chemicals industry, it said.
"Suppliers and industry regulators - such as the Chemical and Allied Industry Association and development finance corporations - will be crucial to local market development, especially if interventions are enforced," Peinke said.
