The growing cosmetic products market and the increasing demand for 1,3-butylene glycol in the pharmaceutical industry are the major growth drivers for the 1,3-butylene glycol market. Due to the aforementioned factors, the industry is projected to generate $269.1 million revenue by 2030, advancing at a CAGR of 5.9% during 2021–2030.
The implementation of strict measures, such as lockdowns and social distancing, by governments in 2020, to tackle the COVID-19 pandemic, resulted in a lower production of chemicals compared to 2019. Manufacturing operations of chemical companies were scaled down due to labor shortages and disruptions in the supply of raw material. According to the National Bureau of Statistics of China, chemical manufacturing in China slumped by around 20% in 2020 compared to last year, with profits declining by 66%.
As a result, the demand for 1,3-butylene glycol decreased; however, the market is expected to recover due to the growing demand for cosmetic products and booming pharmaceutical industry.
The 1,3-butylene glycol market is categorized into pharmaceutical grade and industrial grade, on the basis of product. Of these, the pharmaceutical grade category dominated the market during the historical period (2017–2021), and it is expected to retain its dominance during the forecast period (2022–2030). This is because pharmaceutical-grade 1,3-butylene glycol is used more as a chemical solvent in the cosmetics & personal care, food, and pharmaceutical industries than the industrial grade. Thus, the higher the demand for the base chemical from the cosmetics & personal care, food, and pharmaceutical industries, the higher the consumption of its pharmaceutical grade.
The market is categorized into cosmetics & personal care products, food products, and others, on the basis of application. Among these, the cosmetics & personal care products category dominated the market in 2021, and it is expected to retain its dominance till 2030. This will be because this chemical acts as a barrier to prevent the drying out of or loss of moisture and also stabilizes the volatile compounds used for fragrance and flavor, to retain aroma.
Globally, Asia-Pacific was the largest contributor to the 1,3-butylene glycol market in 2021, with an estimated 47.2% revenue share. This was on account of its vast population, booming e-commerce industry, and growing consumption of cosmetic and personal care products. China, India, and Japan are the largest markets in APAC, accounting for more than 90% of the regional share in 2021. The increasing appearance concerns and rising popularity of hair and skincare products in China and India are driving the APAC personal care products market, which is further propelling the demand for 1,3-butylene glycol.
Additionally, during the forecast period, the market is expected to witness the fastest growth in the APAC region, attributed to the improving healthcare infrastructure, increasing disposable income, and growing cosmetics industry, especially in India and China.
Players in the industry have been involved in product launches and other developments to remain competitive. For instance, in July 2019, Godavari Biorefineries Ltd. earned the U.S. Department of Agriculture (USDA)’s bio-based product label. The company’s products, namely NaturoBG (1,3-butylene glycol), glacial acetic acid, and crotonaldehyde, received the USDA label that highlights the percentage of bio-based content.
Moreover, in March 2017, KH Neochem announced the expansion of its Yokkaichi Plant’s capacity, to strengthen the supply framework of 1,3-butylene glycol.
The major players operating in the 1,3-butylene glycol market are Daicel Corporation, KH Neochem Co. Ltd., Genomatica Inc., Godavari Biorefineries Ltd., OQ Chemicals GmbH, and Haihang Industry Co. Ltd.