Innovations Drive Surfactant Market

November 22, 2005

Margins appeared to be on the mend earlier this year, but the recent spike in feedstock prices has crimped profits. Despite economic conditions, demand for multifunctional, mild surfactants remains high.

Innovative new ideas such as Mr. Clean Auto Dry help companies maintain market share despite the popularity of private label products.
Got a dirty bowl? High-tech formulations, such as Lysol Powerons Gel, rely on unique surfactant systems to get the job done.
Relief, when it finally arrived, was short-lived. After years of functioning in a business environment plagued by lower margins, surfactant manufacturers finally regained some pricing power earlier this year as signs of inflation began to creep into the U.S. and other economies.

Unfortunately, for them, as well as many other raw material suppliers to the household and personal products industry, the dramatic spike in oil prices has wiped out many of those gains in recent months. In fact, in a recent online poll at Happi.com, by a margin of 4:1, readers said that higher production costs are outpacing price increases. At press time, prices had topped $48 a barrel—a new record high for crude oil futures.

“Price increases were implemented solely in response to increased raw materials. On average, these price increases did not recover the full cost increases,” observed Neil Burns, vice president, marketing, Pilot Chemicals. “The trend is driven by the fundamentals in the petrochemical and oleochemical markets. Oil, gas and natural oils are still trending up. This effect is partially offset by increased levels of competition between global suppliers of surfactant intermediates like LAB and detergent alcohols.”

Other suppliers too, have been forced to raise prices in the face of rising feedstock costs.

“We have found it necessary to move prices upward recently because of increasing raw material prices and unsustainable levels of profitability,” said Dan Howe, vice president, product marketing, Uniqema. “Most of the industry has not had reinvestment economics in the past several years. This has resulted in capacity rationalization and lack of investment that is now translating into tightness in product availability. I cannot comment on future trends, but we have continued to see raw material availability and pricing fluctuations and as an industry. I think investment is still very selective.”

A Slowdown in Mature Markets
As energy prices surge, growth has slowed in several key regions. The once red-hot U.S. economy has lost a bit of its luster in the past quarter, with key economic indicators dropping in July and August. Meanwhile, demand in Europe remains stagnant.

“There hasn’t been any big bang in 2004,” observed Dr. M. Levent Yüksel, vice president, care surfactants and alcohols, Cognis Care Chemicals. “Economies in Western Europe are not picking up and Japan is struggling.”

Still, there are some bright spots for surfactant suppliers. The emerging markets of Eastern Europe and especially Russia hold promise and novel household cleaning systems and personal care formulations are proving to be popular with consumers.

“The Russian economy is more stable,” observed Dr. Sven Abend, global product manager, primary surfactants, Cognis. “Individual wealth is rising and there is interest in Western brands too. Home care is growing in Russia as well.”

High Demand for Innovative Ideas
While surfactant suppliers search the globe for growth, some insist that innovative ideas can still provide a big lift for the surfactant market. For example, Procter & Gamble has revitalized the auto care market via the introduction of Mr. Clean Auto-Dry, its novel car care system.

“The success of Auto-Dry proves that if the right convenience product comes along, consumers will buy into it,” said Rita Köster, director global marketing, home care/I&I, Cognis. “Products that can make special claims of convenience or solve an unmet need, will also grow.”

For example, in Europe, where hard water can be a big problem, Ms. Köster noted that consumers are eager to try auto dish detergent tablets that combine detergent, rinse and softener in one.

According to Mr. Burns of Pilot Chemical, trends from Europe and North America are beginning to converge. He noted that in North America there is a growing interest in surfactants that are low in color (water white) and have low impurity levels—characteristics that have been popular in Europe for a number of years.

“The idea is to have an ‘empty canvas’ on which the formulator can work,” explained Mr. Burns.

To meet its customers’ demands for that empty canvas, Pilot is focusing on production upgrades to ensure the availability of low color, low impurity ether sulfates for the personal care formulator.

“This will be of particular value to formulators of personal care products,” noted Mr. Burns. “This (new quality standard) will become the minimum quality level for all alcohol sulfates and ether sulfates produced by Pilot for any application.”

In addition, Pilot is rolling out specialty surfactants to complement the workhorse anionic surfactants LAS, AOS and AES. These specialty surfactants include amine oxides under the tradename Caloxamine sulfosuccinates (Calinate), amphoacetates (Caloteric) and quats (Calquat).

Today’s hair care products provide a multitude of benefits, such as cleaning, conditioning and anti-dandruff properties, in a single formulation. One example is the new Vitalis shampoo from Idelle Labs.

Multifunctionality is Key
According to executives at Rhodia, surfactant suppliers continue to be challenged by demands to cost-effectively enhance the properties of detergent systems, such as detergency emulsification, foaming, wetting and dispersion.

“These improvements are primarily achieved either through combinational synergies or improved purity of existing surfactants rather than through the development of new
surfactants,” observed Stewart Warburton, Rhodia’s market innovation director.

Demand for multifunctional surfactant systems will continue as long as consumer products are focused on consolidating multi-stage rituals into a single step such as cleaning and conditioning of hair, skin, fabrics and hard surfaces. According to Mr. Warburton, these multi-functional products offer two major product development challenges:

• Developing stable products where the surfactant system is compatible with performance actives such as cationic polymers, hydrophobic oils, silicones, antimicrobials and

• Enhancing the deposition of the performance actives from the aqueous environment in which they are applied. enzymes and

Improving Deposition
One way to improve deposition is based on the surfactant-polymer interaction of high purity alkyl amphoacetates and cationic guar conditioning polymers.

“On dilution, they form a complex that precipitates to trap and deposit other actives present inthe formulation,” said Herman Mihalich, vice president and general manager, Rhodia. “This enhances the deposition of the cationic guar itself and other functional components such as silicone droplets or anti-dandruff actives.”

During the rinse stage, the surfactant-cationic guar complex breaks, leaving the performance actives to complete their task.

Mr. Mihalich also told Happi that the incorporation of sensory triggers to enhance the consumer’s experience and provide an emotional connection to the product’s performance has led to the need for surfactant systems.

“This has led to the need for surfactant systems that can deliver unique in-use and/or dry-feel sensorial benefits,” he observed.

Croda Fills a Gap
Although most surfactant suppliers are diligently at work in the lab, developing new products, they’re also keeping an eye on their competitors and are eager to capitalize on new developments.

“Certainly, the closure of Dow (Hampshire) Chemical’s sarcosine/sarcosinate facility in June will affect the industry,” observed Barbara Woldin, marketing specialist at Croda.

“This site was the only U.S. production operation for sarcosines and sarcosinates. Dow’s departure from the scene creates a real market need which Croda is prepared to meet.”

Croda has been manufacturing sarcosines and sarcosinates under the Crodasinic trade name for years. But until now, the company offered only a limited number of products in the U.S.

“We’ll be expanding our line and importing many Crodasinic surfactants which were previously not a part of our U.S. offerings, although they were being actively produced at our Rawcliffe Bridge manufacturing site in the UK,” insisted Ms. Woldin, who also noted that Croda operates the largest and most modern sarcosine/sarcosinate facility in the world.

“Our production facility has ample capacity to fill the void created by Dow’s departure,” said Ms. Woldin. “We have been assured that the Rawcliffe Bridge facility has all the necessary capacity to take on any of the business that Dow is abandoning.”

Paris D’Yves Saint Laurent is a new bath line which promises to gently cleanse, tone, refine and moisturize the skin.

Keeping Close to the Customer
To succeed in this rapidly changing market, suppliers must stay one step ahead of marketers and consumers, according to Cognis executives.

“Suppliers must be more innovative and they must understand the customer more than ever,” said Dr. Abend.

To stay close to the customer, Cognis recently revamped its organizational structure by creating strategic business units (SBUs). The move to SBUs gives Cognis personnel all the support they need to focus on the customer.

“The product cycle is shorter than ever,” observed Dr. Abend. “Suppliers need to be fast and flexible to meet the needs of their customers.”

To keep ahead of consumer demands, Rhodia recently introduced a range of new surfactant systems. The new Miracare performance concentrate product range includes blends developed for specific market segments.

“Rhodia can develop performance concentrates for existing formulations to provide the logistical benefits of consolidating multiple components into a single concentrate,” explained Mr. Warburton of Rhodia. “We also provide in-house formulated concentrates so customers can take advantage of Rhodia’s R&D resources and expertise.”

Miranol Ultra products are high purity amphoacetates that provide superior mildness, foaming and enhanced deposition of actives when used in combination with cationic guar.
Rhodia recently secured a patent on this new high-purity amphoteric.

Finally, the Dermalcare MAP product range is based on Rhodia’s patented phosphation process that allows for the synthesis of alkyl phosphate esters with varying ratios of monoalkyl and dialkyl phosphate ester.

“This process can provide high monoalkyl phosphate esters that provide unique skin feel, high foam and ultra mildness characteristics,” said Mr. Warburton.

Earlier this year, Uniqema expanded its Promidium line of products with the launch of Promidium LTS, a liquid thickener system that is said to provide optimum viscosity build and rheology control in personal care formulations. According to Uniqema, many of the consumer products that incorporate Promidium LTS will utilize milder or lower levels of surfactants, an approach that presents viscosity- and rheology-formulating problems. To address these issues, the new technology offers five to 10 times the viscosity-building performance compared to liquid thickening products currently on the market and a much higher degree of control and predictability than traditional thickening approaches, according to Uniqema executives.

In a sample amphoteric formulation, at only a 2% actives level, Promidium LTS was able to achieve over 25,000 cps viscosity. At this same level, other competitive alternatives yielded 3,000-7,000 cps. Benefits to formulators in this instance include the ability to enhance viscosity efficiently and predictably, lower cost in use and highly shear thinning flow.

Uniqema is expanding its facility at Atlas Point in New Castle, DE. The Atlas Point plant is one of Uniqema’s key manufacturing operations producing a wide range of products for numerous global markets. Products to be produced at this facility include the Arlasilk phospholipid series of multifunctional biomimetic ingredients that provide conditioning and other performance attributes; the Monamid series of surfactants based on fatty acid alkanolamides; the Arlatone MAP series of mild, high-performance surfactants; the Monateric series of amphoteric surfactants offering low- or no-foaming and the Monasil series of organosilicones, in addition to other surfactants.

What the Consumer Wants?
As suppliers roll out new surfactant ranges and marketers develop novel solutions for personal and household care dilemmas, Shyam Gupta, president of consulting firm Bioderm, Inc., noted that more consumers are demanding products that are based on safe, natural and high-performance specialty surfactants.

“Many higher end marketers are forsaking the use of common surfactants, such as ammonium lauryl sulfate (ALS), sodium lauryl sulfate (SLS), ammonium lauryl ether sulfate (ALES), sodium lauryl ether sulfate (SLES) and ubiquitous foam-boosting cocamides due to negative publicity associated with those ingredients,” he insisted.

Dr. Gupta also suggested that marketers are playing “INCI name games” in an effort to hide surfactants currently suffering from bad publicity.

“For example, the use of sodium cocoyl sulfate instead of SLS takes the attention away from the ‘SLS’ name and focuses the naturalness of ‘coco’ name,” he told Happi. “In terms of real consumer benefit, is there a real advantage in such a shift?”

In this environment, he expects surfactants that sport less tongue-twisting names and signal natural origin will gain ever increasing popularity among consumers who are getting wiser in understanding the importance of ingredients listings.

As a result, high-foaming, clean-rinsing, non-irritating, plant-derived and easy-to-formulate surfactants will gain market share, Dr. Gupta said.

Looking for a new surfactant system? A list of them starts on p. 68 in the print version of Happi.