sea opportunities for specialty lubricants for food grade and subsea sector - how viable is it?
TRANSCRIPT
SEA Opportunities for Specialty Lubricants for Food Grade and Subsea Sector- How viable is it?
Sushmita Mahajan Research AnalystChemicals Materials & Food
1st June 2011
2
Agenda
Market Overview
Market Drivers and Restraints
Market Trends in Specialty Lubricants
Opportunities and Challenges
What is Food Grade Lubricant
Role of Local association like MPOB
3
What is Food Grade Lubricant
• Food-grade lubricants perform the same technical functions as any other lubricant:
• It’s function is to provide protection against wear, friction, corrosion and oxidation, dissipate heat and transfer power
• It has to be compatible with rubber and other sealing materials, as well as provide a sealing effect in some cases
• The Food Grade Lubricants currently used in Southeast Asia are Ester-based lubricants without any renewable raw material content.
4
Overview of Specialty Lubricants for Food Grade
While we regularly see processed food products in the supermarkets.
Hardly ever do we think of a scenario where the fresh products come in close contact with the processing machineries.
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Overview of Specialty Lubricants for Food Grade
•Merits of Food Grade Lubricants•Provide the food manufacturer with an effective tool to control the risks caused by contamination of lubricants (chemical hazards)•Food manufacturers can select lubrication points as Critical Control points (CCPs) in their Hazard Analysis and Critical Control Points (HACCP) plans.
Food Grade Lubricant Categories
• H1 lubricants are food-grade lubricants used in food-
processing environments where there is the possibility of
incidental food contact.
• H2 lubricants are nonfood-grade lubricants used on equipment
and machine parts in locations where there is no possibility of
contact.
• H3 lubricants are food-grade lubricants, typically edible oils,
used to prevent rust on hooks, trolleys and similar equipment.
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Opportunities and Challenges of Specialty Lubricants
• The market for food grade lubricants and lubricants for subsea applications was estimated as US$39.2 million in 2009.
• There is a very good potential for growth as traditionally the market is dominated by mineral oil based lubricants.
• There is potential for bio-lubricants in the future because of the assured source of feedstock supply from palm oil, which is produced abundantly in Southeast Asia. However, this is a long-term prospect and will need a strong push from the government and regulatory bodies to put regulation in place to mandate the usage of bio-lubricants. 64.6%
0.7%
23.5%
11.2%
Hydraulic Fluids Gear Oil
Greases Chainsaw
$39.2 million
Specialty Lubricants For Food Grade and sub-sea application Market : Percent of Revenues by Segment (Southeast Asia), 2009
Note: All figures are rounded; the base year is 2009. Source: Frost & Sullivan
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Opportunities and Challenges of Specialty Lubricants
Challenge
1-2 Years 3-4 Years 5-7 Years
Cost Concerns
Lack of Support from OEMs
High Medium Low
Specialty Lubricants Markets for Food Grade and Subsea Applications: Impact of Top Three Industry Challenges (Southeast Asia), 2010-2016
Source: Frost & Sullivan.
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Opportunities and Challenges of Specialty Lubricants
Countries in Southeast Asia
GDP ($ Million) (2009) GDP growth
rate in 2009
Lubricant (mineral oil-based and synthetic) market growth rate (2009)
Specialty Lubricants market growth rate (2009)
Singapore 163.1 -2.0% 5-7% 3-4%
Malaysia 207.3 -1.7% 4-5% 2-3%
Indonesia 514.9 4.5% 10% 5-6%
Thailand 266.4 -2.3% 8-10% 2%
The Philippines 158.7 0.9% 5-7% 3%
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Market Drivers and Restraints
Drivers
Restrain
ts
Drivers
Restrain
ts
Denotes long-term Impact Denotes short-term impact
Food manufacturing industry growth
complemented by proactive effort of
lubricant manufacturers
Safety concerns by the leading food manufacturing companies drives the need
Source: Frost & Sullivan.
Specialty Lubricants (Food Grade and Subsea oil & Gas Sector) Market: Drivers and Restraints (Southeast Asia ), 2010-2016
Higher price restrains the market growth
Absence of proper regulation prevents bio-lubricants to be
accepted widely
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31.0
32.0
33.0
34.0
35.0
36.0
37.0
38.0
39.0
40.0
2006 2007 2008 2009
Rev
enu
es (
$ M
illi
on
)
Revenues ($ Million)
Market Trend
Specialty Lubricant Market Trend in Southeast Asia
Source: Frost & Sullivan
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Current Research Initiatives in Southeast Asia Done by Malaysian Palm Oil Board
Advanced Oleochemical Technology Division of Malaysian Palm Oil Board (MPOB), Malaysia, has developed six types of palm esters using palm-based material. The resulting palm esters could be used on its own as a base fluid to formulate a bio-lubricant or blended with other esters, mineral oil, or synthetic oil to produce the desired lubricants.
Role of Associations Like MPOB
Food-grade
Lubricant ISO VG
15
Food grade
Lubricant ISO
VG 22
Food grade
Lubricant ISO
VG 22
Food grade
Lubricant ISO
VG 46
Food Grade
lubricant ISO
VG 68
Food grade
lubricant ISO
VG 100
Food-Grade Lubricant Patented by Malaysian Palm Oil Board
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For Additional Information
Donna JeremiahCorporate CommunicationsAsia Pacific+603 6204 [email protected]
Carrie LowCorporate CommunicationsAsia Pacific+603 6204 [email protected]
Sushmita MahajanResearch AnalystChemicals, Materials & Food+65 6890 [email protected]
Jessie LohCorporate CommunicationsAsia Pacific+65 6890 [email protected]