‘Analysis of the Brazilian Surfactants Market’ reveals that the segment earned revenues of over US $1.31 billion last year and that between 2009 and 2011, 10 million people joined the 'new middle class', which is currently said to account for more than 55 percent of the total population in Brazil.
Surfactants are used in many industrial applications, such as agrochemicals, photo chemicals, oil field chemicals, construction materials, foodstuffs, and adhesives, with body care products and cosmetics holding a 9.5 percent market share.
As well as a growing middle class, the report also highlights an aging population, higher incomes and an increasing concern towards health and beauty issues as fuelling the adoption of surfactants, with personal care and household products being the most popular.
"Consumers demand additional utilities from these products, including cosmetic and health benefits, and this has encouraged the development of multifunctional surfactants, which have significantly added value to the market," says Lisse de Oliveira, Frost & Sullivan industry analyst.
Established companies dominating the market
The market researcher also found established companies to be dominating the personal care sector in Brazil, and that several small manufacturers producing and selling poor-quality products are affecting the whole surfactants value chain.
De Oliveira says that without the burden of the high taxes usually imposed on regular companies, these informal producers distribute their minimally-packaged and unbranded products door-to-door or in small groceries.
"They gain an imprecise but considerable share of the market, reducing the potential sales of high-quality surfactants and this highlights the urgent need for fiscals and the government to educate end-users on illegal commodities, and raise awareness on the ill-effects that the informal market can have on the economy."
And added that; "Fueled by increasing recognition in the market, popular brands and private labels that offer superior products at competitive prices will fare well, especially among the lower income class."
Call for investment in R&D areas...
Thus, Frost & Sullivan is urging raw material suppliers to invest in R&D to develop innovative surfactants will lower costs to appear to the lower income class in the country.
"Companies should invest more in the research and development of new raw material solutions. Offering products with better benefits and lower costs will enable participants to win market share, achieve high growth, and stay competitive,” De Oliveira concludes.