May 21, 2024

The Middle East Bio-chemicals Market is Driven by Increasing Food Processing Industry

The Middle East bio-chemicals market includes various types of chemicals that are derived from renewable feedstock through fermentation or other biological processes. Key product types include bio-alcohols, bio-organic acids, and biopolymers. Bio-alcohols such as bioethanol are widely used as biofuels and fuel additives to increase octane and reduce vehicular emissions. Bio-organic acids find application in various industries such as food & beverages, personal care, pharmaceuticals, among others. Biopolymers are increasingly being utilized as an eco-friendly alternative to plastics. With growing environmental consciousness, many countries in the Middle East are encouraging the adoption of renewable sources of energy and bio-based chemicals to reduce dependence on fossil fuels. This is expected to drive the demand for bio-chemicals over the forecast period.

The global Middle East bio-chemicals market is estimated to be valued at US$ 1,998.5 KT in 2024 and is expected to exhibit a CAGR of 6.5% over the forecast period 2024 to 2030, as highlighted in a new report published by Coherent Market Insights.

Market Dynamics:

The growing demand for renewable sources of energy referred to in the heading is a key driver propelling the Middle East bio-chemicals market. Many Middle Eastern countries, especially Saudi Arabia, are targeting sustainable development through initiatives such as the Saudi Vision 2030 plan. This involves diversifying the economy away from oil dependence and promoting the use of green energy and bio-based alternatives. Another major driver is the rising environmental concerns around conventional petrochemicals. There is increasing regulatory pressure on players to reduce emissions and adopt bio-based feedstocks. This is encouraging Middle East market players such as Saudi Biodiesel, Saudi Bio-Acid Company, and Neutral Fuels to ramp up production of various bio-chemical products through organic and cost-effective methods.

Segment Analysis

The Middle East bio-chemicals market is dominated by the food and beverage segment, which holds around 35% share of the market. Being an agricultural economy, the food and beverage industry forms the backbone of the Middle East economy. The growing population and per capita income has led to an increase in demand for packaged and processed food items. This is expected to drive the demand for bio-chemicals such as emulsifiers, ph stabilizers, and preservatives from the food and beverage industry in the region.

PEST Analysis

  • Political: The governments in the Middle East region are supporting the growth of domestic bio-chemicals industry through various policies and initiatives. For instance, Saudi Arabia has launched vision 2030 to diversify its economy and reduce dependence on oil. This is expected to boost investment in the bio-chemicals sector.
  • Economic: The strong economic growth in the Middle East backed by rising income levels and consumer spending has increased demand for wide range of consumer products. This is positively impacting the bio-chemicals market which finds application in industries such as food and personal care.
  • Social: The population in the Middle East is predominantly young and brand conscious. There is growing health awareness among consumers regarding use of natural and organic ingredients in personal care and food products. This is generating demand for bio-based chemicals in the region.
  • Technological: Key players in the Middle East bio-chemicals market are focusing on development of innovative and sustainable production technologies to remain competitive. For example, companies are investing in fermentation technology to produce bio-chemicals from agricultural waste.

Key Takeaways

The global Middle East bio-chemicals market is expected to witness high growth over the forecast period driven by rapid industrialization and expansion of end-use industries. The food and beverage industry is predicted to remain the major consumer of bio-chemicals due to growing population and urbanization in the region.

Regional analysis: Gulf Council countries such as Saudi Arabia and UAE are expected to be the fastest growing markets for bio-chemicals in the region. This is due to robust economic growth along with initiatives by governments to diversify economy and reduce dependence on oil. The government of Saudi Arabia under its vision 2030 aims to boost non-oil industries including speciality chemicals.

Key players analysis: Key players operating in the Middle East bio-chemicals market are BASF SE, Clariant A.G., Evonik Industries A.G., Total S.A., Cargill Inc., Biolive, Saudi Biodiesel, Saudi Bio-Acid Company, Sain Bag, and Neutral Fuels. These players are focusing on expansion of production facilities as well as development of new application areas to strengthen market position.