Surfactant Update

December 9, 2005

The good news is that there's a lot of good news to report in this all-important category which can have such a big impact on household and personal care formulations.

Surfactant Update

The good news is that there's a lot of good news to report in this all-important category which can have such a big impact on household and personal care formulations.

Tom Branna - Editorial Director

Things are picking up for many suppliers of surfactants to the household and personal products industry. When putting together our annual look at the surfactant market, we found that most industry executives had nothing but positive responses to our wide-ranging questions on product trends, sales growth and expanding regions around the world. It's a completely different picture from just a couple of years ago, when many suppliers were grappling with over-capacity and dwindling profit margins. Yes, rising energy costs continue to plague the segment, but most suppliers have been able to pass at least some of those rising costs on to their more understanding customers. By product group, several suppliers singled out wipes as a source of gains, along with traditional growth categories such as hair care and body washes.

Where in the world is all this growth coming from? Most observers are bullish on Asia and the U.S. For instance, Pascal Juery, vice president, home and personal care, Rhodia, insisted Asia has been on fire for the past 18 months. "We experienced double-digit growth last year and for the first six months of 2005," he told Happi. "Consumers from India to China want quality personal care products and that's driving growth for surfactants throughout Asia."

In recent years, Asian consumers have come to appreciate sophisticated Western-style formulas that European and Americans have come to expect from marketers of personal care and household products. Good news for industry suppliers is that products offered in developed markets are getting even more sophisticated.

"The demand for surfactants (ethoxylates) has been at an all-time high due to the general upturn in world economies and economic growth in Asia," said Keith Wiggins, global commercial director, Dow polyglycols and surfactants. "Dow is working to meet this demand by providing lower cost solutions and working with key customers on new innovations for better performing products."

Christopher Tarletsky, general manager, Jeen Chemical noted that several product development efforts are focusing on traditional target consumer benefits such as high-foaming clear body wash products that offer improved skin after-feel and higher active concentrations of surfactants that offer improved mildness.

Some of these products are even making their way into Latin America.

"We see increased performance in select South American countries where the product development teams are aggressively trying to better understand and utilize specialty-based systems," said Mr. Tarletsky. "Our marketing efforts indicate that there seems to be an increased awareness of specialized benefits that can be offered through cleansing systems."

High-foaming surfactants are a must when creating liquid dishwash detergents.

A Boost from Skin Care

Back in the U.S., specialties have provided a lift for several surfactant suppliers as well. Henk de Jonge, sales manager of Care Chemicals-NAFTA Region at Cognis, said demand for surfactants for specialty applications, such as wipes and hard surface care, has been very strong.

"The U.S. skin care market has been a growth area as well, driven by innovation and 'lighter' sensory preferences," he observed. "From a global perspective, we have seen good growth in all regions. Europe has been exceptionally strong. We have invested in all regions with an emphasis on the U.S. and Asia. The U.S. is, and will remain, a focus area."

More specifically, Mr. de Jonge said mildness and moisturization remain important claims. In North America, Cognis reported growth in base surfactants as well as a trend toward high active lauryl ether sulfate. At the same time, Mr. de Jonge reported increasing demand for alternative sulfate-free surfactant systems; in particular, personal care applications, such as shampoo and body washes.

Executives at Pilot also reports strong demand from shampoo and body wash customers. And while this demand slowed a bit during the summer, Glynn E. Goertzen, VP-commercial at Pilot Chemical said he expects demand to pick up later this year.

Rick Hanson, VP-sales, Uniqema, said products that deliver higher performance benefits and consumer satisfaction are driving growth. Typically, these are products that make use of the elevated performance of specialty surfactants and also use surfactant formulating techniques to deliver "actives" better and to help them perform longer.

"At the same time, we are helping customers to take costs out of formulations with our HLB system and experimental product design programs," he explained.

Sean T. Moriarty, business manager-North America, personal care at Stepan noted that liquid cleansing products-body washes in particular-have been the fastest growing segment for his company.

"Growth of body wash products is driven by consumers upgrading from soap bars to body wash," he noted. "Additionally, body washes are offering increased value added benefits, like moisturization, improved skin feel and aromatherapy."

There's been robust demand for specialty surfactants, according to Art Pavlidis, marketing and sales manager, Chattem Chemicals.

"We see a very big opportunity for the use of sarcosinates in sulfate-free formulations for shampoos and body washes, which are much less irritating to the skin," he said.

Mr. Pavlidis said that sarcosinates provide some unique properties to give good foaming that can't be found in other surfactants in these types of formulations.

"Interestingly, while the focus on 'sulfate-free' has gathered force over the past year, Hamposyl surfactants have always been sulfate-free," he noted. "In addition, they are compatible with other surfactants used to make sulfate-free formulations, such as sulfosuccinates and APGs."

In the household products segment, growth areas include products serving the "healthy homes" trend based on more environmentally-friendly ingredients and the high performance products that help surfaces stay clean longer, most often based on polymeric surfactant technology. Another home product category that is driving growth for Uniqema is air fresheners, where new formulation approaches and more stable emulsions based on specialty derivatives, such as the Hypermer range of polymeric surfactants, are improving the shelf-life of these products.

Like several other suppliers, Mr. Hanson singled out wipes as a growth segment. "Our products are being used both in the manufacture of the fibers themselves and in the formulations that they carry. By applying our surfactant technology on both the 'solid' and the 'liquid' phase of these projects, we've been able to deliver optimal results."

Over at RITA, there's been a steady increase in demand for naturally-derived surfactants. Specifically, customers are interested RITA's two new patented surfactant classes of raw materials-Eucarols and Ritafactants. Both compounds are naturally-derived and provide superior cost effective performance to sulfated products, said Tom Goode, VP-sales.

Similarly, Mr. Pavlidis pointed out that Hamposyl surfactants have applications as "green" adjuvants with glyphosate formulations for pesticides, herbicides and weed killers. Chattem has patented the use of Hamposyl surfactants in these formulations. They are "green" by virtue of being readily biodegradable, non-toxic and, in general, environmentally friendly, he said.

Of course, no matter what product trends are reshaping the surfactant market, service still counts for something and Manny Balsamides Jr. insisted that Protameen's surfactant sales are on the rise because his company can offer competitive pricing and better service than major multinationals.

"Protameen reacts much quicker than our competition," he insisted. "There has also been an increase in custom blending requests. Many of our large customers are looking to integrate raw materials so they can speed up batching processes making them more reactive to market forces."

The High Cost of Business

Most suppliers contacted by Happi agreed that rising costs have forced them to pass these increases on to their customers-but a few saw a silver lining in the price hikes.

"These pricing moves enable Huntsman to continue providing its customers with a steady supply of innovative, high quality and performance products, as well as a high level of service in a competitive environment," insisted Janice Mabe, director of base surfactants, Americas region, Hunts- man.

"The rising cost of materials has opened up a dialogue with our customers as they take a new look at their formulations," explained Mr. Hanson. "They are asking how to take costs out of formulations and/or how to make them more effective. We're finding that materials that deliver better cost/performance or higher effectiveness-even though they are higher priced than traditional ingredients-are getting a longer look."

He said that specialty surfactants, such as Uniqema's Mona line of hydrotropes, can deliver 25% better performance or 25% lower total formulation cost-without costing 25% more than the products they replace.

Dow Chemical executives insist that the company's price increases have only covered the rising cost of feedstocks. The company continues to focus on increasing operating efficiencies, which can help toward long-term sustainable margin improvements, but Dow executives called for more equity in the value chain. They noted that commodity costs rely a great deal on the ethylene market and when ethylene costs were at their peak, costs increased. Although ethylene costs are lower and the industry is recording better capacity utilization due to strong demand and better business performance, recouping some of that cost has been below investment levels.

Dow executives noted, too, that specialties are used for different functions and applications and deliver a particular feature to a formulation that is needed by the customer. "In most cases, customers understand the need and are willing to pay for the specialty product that is designed just for them," they said.

Dow is working to meet the demand of global and local customers around the world. Customer requirements vary with the markets they serve. Dow works with key customers on new innovations for better performing products, products with an improved environmental profile, and/or how to provide lower cost solutions. Rising costs can create opportunities, they suggested.

Mr. Goode acknowledged that feedstock costs, including energy, transportation and packaging costs, have had a major impact on the raw materials RITA produces. Unfortunately, many value brand manufacturers simply can't afford any price increases due to their position that has already been established at the point of sale.

"Ultimately, we, suppliers and marketers, must work together to solve this dilemma and reach an equitable solution for both parties mutual benefit," insisted Mr. Goode. "As the trend continues for non-sulfated and EO adjunct surfactants, opportunities exist where customers are accepting higher cost raw materials to deliver the performance and provide product plus than they were traditionally accustomed."

Mr. de Jonge of Cognis noted that, in some instances, price increases were supported by limited availability of key raw materials.

"It was interesting to see that, after quite a few years, the true character of commodities was noticeable," he said. "Commodities can be very cheap if there is abundant supply but also very expensive if there is no material available."

This availability, he said, also was the determining factor in the willingness to pay more for any particular raw material.

It's all about the hair. Surfactants make hair soft and touchable.

Mr. Tarletsky agreed that cost factors have put enormous stress on the market, but he suggested that specialized systems, when combined with a good customer relationship, have helped manage the total cost equation.

"This approach has forced our sales team to better understand where additional economic gains can be realized with our customers that allow us to balance the total cost equation with the manufacturers," he noted.

With demand growing in Asia and North America and Western European markets holding their own despite a mature consumer base, several surfactant suppliers who spoke to Happi said they were expanding their surfactant offerings in 2005.

Cognis, for example, is putting particular emphasis on the U.S. and Asia. The company's high temperature reactor in Mauldin, SC, comes on-stream this month. In addition, Cognis has expanded its U.S. operations, R&D, marketing and sales staff to support its growth strategy.

"We have been harmonizing products and will continue to support our customer base with identical products that can be sourced from multiple plants around the globe," explained Mr. de Jonge. "At the same time, we have seen a need for a robust, short supply chain. The ability to forecast fluctuations varies per customer, especially where orders are generated directly from retail sales. Flexibility and security of supply are key competitive advantages."

In order to offer global grade alkyl poly glucoside (APG), Cognis recently started production of coco glucoside in its U.S. plant. This 100% vegetable derived sugar surfactant is used in multiple personal care applications where mildness is an important requirement, according to Mr. de Jonge.

RITA has expanded capacity for eucarols which are APG esters manufactured by Lamberti Spa. According to Mr. Goode, these unique surfactants offer a wide range of product applications in the personal care sector and well as I&I markets. They impart mildness, degreasing and biodegradability properties without sacrificing foam, if desired, to address the new challenges presented in today's world of surfactants.

"The success of these raw materials has led to new research and will undoubtedly bring us into new markets," insisted Mr. Goode.

Chattem Chemicals is constantly looking for new areas of opportunity for growth, said Emil Litwin, vice president. From its roots as an industrial products company making aluminum-based specialty additives for industrial applications and for use in antacids, and glycine for a variety of human applications, such as taste modifiers and IV solutions, Chattem has evolved into a producer and supplier of bulk active pharmaceutical ingredients, which it manufactures at its FDA- and DEA-inspected facility in Chattanooga, TN.

"We have been looking to enter the personal care market as an adjunct to our pharmaceutical business and to extend our capabilities as a specialty chemicals manufacturer," he said. "With Dow's exit from the specialty surfactants business, coupled with a growing demand we perceive for domestically manufactured surfactants, the Hamposyl product line presented an excellent opportunity to enter the personal care market the right way, in keeping with our basic mission to supply valued-added specialty chemicals of the best quality to the highest standards."

Pilot Chemical is undergoing several changes during the next few months in order to fuel its continued growth and become a world leader in the global market for surfactant chemicals.

By Jan. 1, Pilot will relocate its corporate offices to Cincinnati, OH. Included in this move will be all executive, operations, commercial, technical, and finance and administration functions. According to company executives, the improved communication, coordination and efficiency resulting from these changes will lead to improved processes across all functions and move Pilot closer to its goal of world class customer satisfaction.

Cincinnati is the logical location for the company headquarters as Pilot's two largest plants are located in the Cincinnati area. The city is also centrally located for service to a majority of Pilot's customers and coordination with its suppliers. The company will also benefit by having its laboratories and technical facilities located closer to its largest production facilities.

In addition to relocating its corporate offices, Pilot will reorganize its management structure. Paul Morrisroe will remain as president and CEO. The corporate functions will be organized into three groups. Susan Leslie has been named VP-operations, encompassing the manufacturing, technical and quality functions of the company. Glynn Goertzen is VP-commercial, responsible for sales, marketing, business development, supply chain, customer service and production planning. Matthew Bray is VP-finance and administration, responsible for accounting, finance, human resources and IT.

But not all companies are making big moves in surfactant expansion. Dow Chemical, for example, has not opened any new tech centers nor expanded capacity within the past year, but the company continues to evaluate many new opportunities.

"In general, the surfactants industry is not in the invest mode, rather a growth mode," said a Dow Chemical spokesman. "In addition to utilizing Dow's products within our existing markets, we continue to investigate innovative and creative uses for surfactants."

Huntsman has restructured its surfactants manufacturing assets this year. With the closure of the Guelph, Canada facility, Huntsman consolidated North American manufacturing at its three remaining plants in Texas. According to Ms. Mabe, the investments made in Texas enable Huntsman to make its product range more efficiently and flexibly. Huntsman is also consolidating its surfactant assets in Europe.

Both moves have been in response to the need to lower cost of service to the surfactants industry, she told Happi.

"We intend to be more focused and capitalize on our strength as a large scale, yet flexible, ethoxylator with back integration all the way to ethylene. To that end, we are redirecting our marketing efforts in personal care to build on our existing capabilities and technical expertise, for instance in ethoxylate and isethionate production."

In July, Huntsman opened an advanced technology center in The Woodlands, TX. The facility allows the company to bring together North American technical groups from all five of its major businesses.

"With this strong focus on our R&D resources, we will increase our ability to share process, application and basic chemistry expertise in a number of related fields. By facilitating the link between technical teams and their related business centers, we can continue our commitment to providing differentiated and innovative solutions to customers and the marketplace.

In North America, Uniqema has been expanding capacity at its Atlas Point, DE facility to replace older, less efficient capacity. A program is underway to address manufacturing excellence at Atlas Point and to add new products previously made at other facilities to this site.

"This significant investment will allow us to produce more cost effective, higher quality ingredients that will help our customers take cost out of their own products, and will position us to be the best supplier of specialty surfactants in the years to come," insisted Mr. Hanson.

The Atlas Point site, which is designed to service specialty surfactant and derivative markets, is already producing some of these relocated products and the expansion of this highly efficient, state-of-the art facility will be completed by the end of 2005.

A year ago, Stepan acquired sulfonation assets in Brazil. According to Mr. Moriarity, this acquisition is a key milestone in Stepan's globalization strategy. This facility will allow Stepan to better serve the growing Brazilian market with local production. It will bring opportunities to establish new relationships in Brazil and to supply existing Stepan customers from a new location near Belo Horizonte.

Elsewhere, a new polyol plant by Stepan's joint venture in Nanjing, China was also completed during the second quarter of 2005.

Looking for a new surfactant? Check the list below.

New Surfactants

Here is a list of new surfactants introduced by suppliers during the past 12 months.

For more information about the ingredients listed here, contact the supplier directly.

Bio-Botanica Inc

Hauppauge, NY
Tel: (632) 231-7332
Website: www.bio-botanica.com

INCI name: Saponins
Applications: Toothpaste
Use levels: 0.5-5%
Attributes: All natural surfactant, high foaming index.

Cognis Corporation

Ambler, PA
Tel: (800) 831-0815
Website: www.cognis.com

Plantacare 818 UP
INCI name: Coco Glucoside
Applications: secondary surfactant for mild shampoo, body washes and liquid soap
Use levels: 2-5%
Attributes: 100% vegetable origin, Mildness, foam boosting.

Plantapon LC 7
INCI name: Laureth-7 Citrate
Applications: secondary surfactant with additional performance benefits for shampoos and body washes
Use levels: 2-5%
Attributes: Mildness, Moisturization, Skin and hair conditioning.

Dehypon 3697 GRA M
INCI name: Modified fatty alcohol polyglycolether
Applications: Rinse aid for solid multifunctional automatic dish detergents, like "2in1" concepts
Use levels: Recommend 2% to 5% replacing nonionic currently in a formulation
Attributes: Granular low foaming surfactant with a high antifoam capacity and excellent wetting behavior, functions as a wetting agent and detergent in the wash cycle and as a rinse aid in the rinse cycle of a dishwasher. It is chemically stable in alkaline formulations and in the presence of acids, e.g. phosphoric acid or citric acid.


Edison, NJ
Tel: (973) 644-4900
Website: www.crodausa.com

Crodaquat DGR
Description: Proprietary
Applications: Non-bleach based hard surface cleaners, car and truck washes, pressure wash cleaners, general purpose degreasers, d-limonene and pine oil based degreasers, acidic lime scale removers.
Use levels: 5-50%
Attributes: Degreaser concentrate that produces extremely low interfacial tensions allowing for exceptional oil and grease removal. Works in a broad range of pH, temperature and builder concentrations. Formulated concentrates can dilute to high levels. Offers a means to make low VOC degreasers.

RITA Corporation

Crystal Lake, IL
Tel: (815) 337-2500
Website: www.ritacorp.com

Eucarol AGE/SS
INCI name: Disodium cocoglucoside citrate
Applications: Body wash and facial cleansers, make up removers, wipes, shampoos, hard surface cleaners, degreasing agents, feminine washes, soaps both illiquid and bars, irritation reducing agent.
Use levels: 1-40%, application dependent.
Attributes: Materials are derived from natural, renewable resources, mild to the skin and non-irritating to the eyes, able to reduce irritation level of traditional anionic surfactants, readily or inherently biodegradable and free from dioxane, ethylene oxide and nitrosamine precursors.

Eucarol AGE/ET
INCI name: Sodium CocoGlucoside Tartrate
Applications: Body wash and facial cleansers, make up removers, wipes, shampoos, hard surface cleaners, degreasing agents, feminine washes, soaps both illiquid and bars, irritation reducing agent.
Use levels: 1-40%, application dependent.
Attributes: Materials are derived from natural, renewable resources, mild to the skin and non-irritating to the eyes, able to reduce irritation level of traditional anionic surfactants, readily or inherently biodegradable and free from dioxane, ethylene oxide and nitrosamine precursors.

Eucarol AGE/SS
INCI name: disodium cocoglucoside sulfosuccinate
Applications: Body wash and facial cleansers, make up removers, wipes, shampoos, hard surface cleaners, degreasing agents, feminine washes, soaps both illiquid and bars, irritation reducing agent.
Use levels: 1-40%, application dependent.
Attributes: Natural, renewable resources, mildness, nonirritating, reduce irritation from traditional anionic surfactants, inherently biodegradable and free from dioxane, ethylene oxide and nitrosamine precursors.