Chitosan Market Poised for Strong Profits but New Entrants are Eating Substantial Shares

A recent business intelligence study on chitosan market by Transparency Market Research (TMR) has notified that owing to the easy availability of raw materials and expanding application scope will ensure a prosperous future. The analyst has foreseen removal of pollutants across industries and municipal wastewater management facilities to open vast new opportunities in the near future. As per the projections of the TMR report, the global chitosan market will be worth US$4.20 billion by the end of 2020, with the demand growing at an impressive CAGR of 17.70% during the forecast period of 2014 to 2020.

Abundance of Raw Materials Inviting New Players

Chitosan, being a natural biopolymer that is second most abundant polysaccharide in the World behind cellulose, which means it easy for new players to make a foray and consume substantial chunk of shares. However, the TMR report has identified and profiled a few prominent players of the chitosan market, including Xianju Tengwang Chitosan Factory, GTC Bio Corp., PT Biotech Surindo, Golden-Shell Pharmaceutical Co. Ltd., Biothera, Primex ehf, Panvo Organics Pvt. Ltd., Heppe Medical Chitosan GmbH, MC Health and Nutrition, and KitoZyme S.A. The value chain of the chitosan market includes a number of raw material suppliers, followed by manufacturers who process and supply the finished products to the end use industries.

Since chitosan is procured from shrimp shell waste, which is a by-product from the fishery industry, patching up with those players is turning into a profitable strategy for the major players of the chitosan market. This integration ensures consistent supply of raw materials. For a long time, Japanese Companies have held the pole positions in the chitosan market but now, players from other Asian countries such as China are making a mark.

Application-wise, the TMR report segments the chitosan market into agrochemical, cosmetics, food and beverages, industrial, biomedicine and pharmaceuticals, water treatment, and others such as fuel cells and photographic products. Among these, water treatment continues to be the leading application segment, leveraging the coagulation and flocculation properties as well as low cost of chitosan. Chitosan is capable of absorbing substantially big metal ions. Geographically, Asia Pacific is anticipated to remain the most lucrative region, dominated by leading chitosan producers – China and Japan.

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Wastewater Treatment Applications Driving Demand

Unique and useful properties of chitosan, abundant availability of raw materials, and growing awareness regarding its health benefits are some of the key factors driving the demand in the global chitosan market. On the other hand, stringent regulations pertaining to shrimp farming, striking disadvantages of the products in drug delivery systems, and instability in some of the other applications are obstructing the chitosan market from attaining greater profitability. The analyst of the report has anticipated production of chitosan from non-aquatic sources as an opportunities that will add new revenue avenues in this market.

Chitosan Market – Predicted Analysis and Forecast by 2025

Global Chitosan Market: Snapshot

Chitosan is a kind of carbohydrate with number of sugar molecules bonded closely. It consist of chitosan and chitin are two renewable and naturally abundant polymers having significant properties such as biodegradability, nature-friendly, adsorption, and non-toxicity. This compound has several usage in the industry such as cosmetics, water treatment, and agrochemicals. Chitosan is extracted from the outer shell of crustaceans for example shrimps, lobsters, crabs and others. The major reason for the growth in global chitosan market is the rise in demand for the products used for the treatment of contaminated water treatment, in order to remove pollutants such as heavy minerals, oils, and phosphorous which are responsible for the deterioration of the water quality. Moreover, in the recent times, there has been a scarcity of fresh water available because of rapid industrialization and rise in population. This factor also contributes in the growth of global chitosan market. This has encouraged firms and government to work on water treatment worldwide.

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The vendors and producers are anticipated to gain high profits by imposing high margins as the pure form of the product is not available easily in the market. Japan has been a dominant region among all others, owing to early acceptance of the product for the usage of water treatment. There are certain manufacturers that have insufficient high quality product in terms of volume, which is likely to pull the down the market growth. Over the past few years there has been a noticeable surge in the demand for waste water treatment in the sectors such as paper & pulp, textile, and metal cutting, which as a result have stirred the global chitosan market.

Global Chitosan Market: Overview

Chitosan is a sugar that is extracted from the hard outer skeleton of shellfish such as crab, lobster, and shrimp. It finds application as a medicine to cure obesity, high cholesterol, and Crohn’s disease. Chitosan also helps to cure complications resulting from dialysis in kidney failure patients. Those complications include high cholesterol, anemia, insomnia, etc. Some people apply chitosan directly to their gums to treat inflammation that can cause loss in tooth and some chew gum containing chitosan to thwart cavities.

Global Chitosan Market: Key Trends

One factor majorly boosting the global chitosan market is the acute shortage of fresh water on account of a burgeoning urban population and rapid pace of industrialization. This has led to substantial investments by governments and private players in water treatment worldwide, particularly in high and middle income countries. Chitosan flocculant, a unique composite, is used in water treatment. It is way more effective and costs less than conventional flocculant in water treatment.

Besides, the booming personal care industry is also propelling the global market for chitosan. This is because chitosan is used in formulation of hair care, skin care, and dental care products. Chitosan has excellent skin moisturizing properties that deters dehydration. Although the global cosmetics industry is expanding at a moderate pace, the growth of the segment containing organic ingredients is slated to have a positive impact on the global chitosan market.

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Countering the growth in the market is the high cost of manufacturing chitosan from raw materials. This has been on account of little progress in the manufacturing technique.

Global Chitosan Market: Market Potential

The global chitosan market is poised for good growth and holds out a strong promise on account of the easy availability of raw materials and emerging applications in different end use segments. The ongoing research and development activities focused on uncovering unique applications of chitosan as well as development of the existing technology is also predicted to promote the market.

Chitosan finds application in cosmetics, water treatment, pharmaceutical and biomedical, and food and beverage, among others. Among them, the water treatment section is slated to outpace all other segments in terms of growth owing to its strong demand for removal of metals and chemicals from wastewater, including pesticides, surfactants, phenol and polychlorinated biphenyls.

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However, the cost of treating environmentally-hazardous waste resulting from the manufacturing process is high. Further, since animal feed manufacturers source the same raw materials, manufacturers of chitosan need to compete with them as well.

Global Chitosan Market: Regional Outlook

From a geographical standpoint, Asia Pacific will likely outpace all other regions in terms of growth. Powered by Japan, which manufactures maximum chitosan, Asia Pacific leads. Indian and China are other key markets in the region. North America is another crucial market with its large cosmetics segment driving demand.

Global Chitosan Market: Competitive Analysis

Stiff competition characterizes the global chitosan market, particularly in Asia Pacific. Further, the industry is price sensitive. Some of the key players in the market are KitoZyme S.A., GTC Bio Corporation, Panvo Organics Pvt., Ltd., and Xianju Tengwang Chitosan Factory.

The industry is integrated with manufacturers producing both chitosan and the end products. However, certain pharmaceutical companies, food supplement makers, cosmetics and biomedical product makers, cosmetic manufacturing companies, and natural diet supplement manufacturing companies buy chitosan from manufacturers to produce end products.