Levulinic acid market to grow at 5.7% CAGR from 2014 to 2020

Global levulinic acid market demand was 2,606.2 tons in 2013 and is projected to be 3,820 tons by 2020. The increasing application of levulinic acid, especially in pesticides, solvents, pharmaceuticals, and cosmetics industries are anticipated to boost growth in the coming years.

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Over the past few years, the chemical industry has continually been striving towards attaining a sustainable growth, with a focus on the development of renewable biotechnological and bio-based products. The production technology for bio-based levulinic acid has been simplified by dehydration of biomass or carbohydrates with acid. Levulinic acid is being increasingly used as a substitute to its synthetic counterparts in industrial usage.

The global levulinic acid market is anticipated to reach USD 19.65 million revenue, with a growing CAGR of 4.8% by 2020. Increasing usage of the acid in niche applications including plastics, nylons and rubbers are expected to drive demand in the coming years. Increasing R&D expenditure, mainly to diminish production costs of levulinic acid to competitive levels is a critical factor for market players.

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Agriculture and pharmaceutical together accounted for over 66% of the overall volume in 2013. Demand for levulinic acid in the agricultural sector and its related applications is expected to grow at a CAGR of 6%, whereas the market is anticipated to grow at 5.4% CAGR from 2014 to 2020 in the pharmaceutical sector.

Apart from these applications, levulinic acid is also moderately used in the production of cigarettes to enhance delivery of nicotine in smoke, making it more receptive to neurons. Methyltetrahydrofuran (MTHF), a critical component of levulinic acid acts as a fuel additive. MTHF is commercially used in automotive segments as fuel extenders and is projected to have a potential demand of 20,000 kilo tons by 2020.

North America dominated the levulinic acid market contributing to more than 41% of the overall demand in 2013. Levulinic acid demand in the region is anticipated to be 1,598.3 tons by 2020, growing at a CAGR of 5.6% over the forecast period, owing to the presence of the prominent application players in the region.

Europe and Asia Pacific are emerging markets for levulinic acid. China, being one the major suppliers, manufactures, and sells the product at a relatively lower price to companies present in the U.S. and Europe which produce downstream products of the chemical. Europe, being the second largest consumer, accounted for 31% of the overall market volume in 2013.

Major market players include Segetis, Biofine, and DuPont. China has large an unorganized manufacturing base with major suppliers being Ouyi Pharmaceutical Co Ltd. and Shijiazhuang Pharmaceutical Group. Biofine has been one of the prominent manufacturers in the industry, with a key focus on MTHF and DALA applications.

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