Vietnam Furfural Market Outlook to 2028

Vietnam Furfural Market Overview

The Vietnam Furfural Market has shown a notable growth, as evidenced by the global furfural market reaching a valuation of USD 547.56 Million in 2023. This growth is driven by increasing demand from industries such as pharmaceuticals, agriculture, and biofuels. The expansion of these industries, alongside the growing emphasis on sustainable and renewable resources, has significantly boosted the furfural market.

The key players in the Vietnam Furfural Market include Central Romana Corporation Ltd., Illovo Sugar Africa (Pty) Ltd., Lenzing AG, Penn A Kem LLC, and Tanin Sevnica. These companies are influential in shaping the market dynamics through their extensive distribution networks and continuous innovation in production technologies.

Some of the major challenges in Vietnam Furfural Market include raw material price volatility, stringent environmental regulations, competition from synthetic alternatives, and supply chain disruptions. These factors affect the profitability and operational stability of furfural producers.

In 2023, Ho Chi Minh City is dominating the Vietnam furfural market, due to its advanced industrial infrastructure, strategic location, and proximity to major ports, facilitating easy export of furfural. Additionally, the presence of major chemical manufacturing companies in this region enhances its dominance in the market.

Vietnam Furfural Market Segmentation

The Vietnam Furfural Market can be segmented by various factors like by application, by end-user industry and by region.

By Application: The Vietnam furfural market is segmented by application into solvents, furfuryl alcohol, and others (flavor enhancers, pharmaceuticals, and agrochemicals). In 2023, furfuryl alcohol segment was dominant due to its attributed to the extensive use of furfuryl alcohol in the production of resins, which are crucial in the foundry industry for manufacturing molds and cores.

By End-User Industry: The Vietnam furfural market is segmented by end-user industry into petrochemical, agricultural, and other industries (food and beverage, pharmaceutical, and textile). In 2023, the petrochemical industry was dominating due to the extensive use of furfural as a solvent in the refining of lubricating oils and as an intermediate in the production of other chemicals.

By Region: The Vietnam furfural market is segmented by region into North, South, East, and West. In 2023, the Southern region of Vietnam furfural market was dominating due to its advanced industrial infrastructure, strategic location, and proximity to major ports. The region's strategic location and access to major ports facilitate easy export of furfural, further enhancing its market share. The industrial infrastructure in the South supports large-scale production and distribution, making it a hub for the furfural market.

Vietnam Furfural Market Competitive Landscape

Company Name

Establishment Year

Headquarters

TCI Chemicals

1968

Tokyo, Japan

Central Romana Corporation

1912

La Romana, Dominican Republic

Illovo Sugar Africa

1891

Durban, South Africa

Pennakem LLC

1946

Memphis, USA

Fortum

1998

Espoo, Finland

Hongye Holding Group Corporation Limited: The company is a leading global producer of furfural, recognized for its technological innovation and expansive market reach. Hongye Holding Group Corporation Limited operates on a global scale, supplying furfural to diverse industries including pharmaceuticals, chemicals, and agriculture, thereby strengthening its competitive edge. Hongye specializes in producing a range of chemical products, including furfural, furfuryl alcohol, thiourea dioxide, and sodium percarbonate. By 2023, its production capacities reached a significant, with the ability to produce 20,000 tons of furfural annually and 100,000 tons of furfuryl alcohol.

Fortum's Biorefinery Project: Fortum, in collaboration with Numaligarh Refinery Limited (NRL) and Chempolis, announced a new biorefinery project in Assam, India, expected to start production in 2024. The facility will produce approximately 50,000 tonnes of ethanol, 16,000 tonnes of furfural, and 11,000 tonnes of acetic acid annually, marking a significant step in the global trend towards bio-based chemical production.

Vietnam Furfural Market Analysis

Vietnam Furfural Market Growth Drivers

Increasing Demand for Bio-Based Chemicals: The growing emphasis on sustainability and eco-friendly chemicals has led to a surge in demand for bio-based chemicals, including furfural. The expanding global focus on reducing carbon footprints and promoting green chemistry drives this demand, as industries like agriculture and petrochemicals seek to replace traditional chemicals with bio-based alternatives. This shift is particularly evident in the increasing use of furfural in producing sustainable resins and solvents.

Expanding Agricultural Sector: In 2024, the country has set a growth target between 3.2-4%, with the Ministry of Agriculture and Rural Development (MARD) aiming for a total export turnover of around USD 54-55 billion. The sector's growth is fueled by the rising need for efficient and environmentally friendly pesticides and fertilizers, which utilize furfural as a key ingredient. As Vietnam aims to become a leading exporter of agricultural products, the demand for high-quality, sustainable agrochemicals is expected to rise, thereby driving the furfural market.

Industrial Applications and Technological Advancements: The technological advancements in furfural production processes for making it more economically viable for various industrial applications. Innovations such as energy-efficient production methods and improved biomass conversion technologies have enhanced furfural's competitiveness in the market, encouraging its adoption in sectors like petrochemicals and pharmaceuticals.

Vietnam Furfural Market Challenges

Raw Material Price Volatility: The furfural market faces significant challenges due to the volatility in the prices of raw materials like biomass. In 2024, the cost of biomass rose by USD 20 per ton, affecting the profitability of furfural producers. This volatility makes it difficult for manufacturers to maintain consistent pricing and impacts their overall financial stability. The unpredictable fluctuations in biomass prices can be attributed to varying agricultural yields, climatic changes, and supply chain disruptions, making it challenging for companies to plan long-term strategies effectively.

Supply Chain Disruptions: Supply chain disruptions, particularly in the wake of global economic uncertainties, have impacted the furfural market. In 2024, logistical issues led to delays in the supply of raw materials, resulting in a production backlog worth USD 10 million. Factors such as transportation delays, geopolitical tensions, and trade restrictions can significantly affect the steady flow of raw materials and finished products. These disruptions create challenges in meeting delivery timelines and maintaining production schedules, thereby affecting market stability and growth.

Vietnam Furfural Market Government Initiatives

Vietnam Chemicals Agency and UNDP Workshop: The Vietnam Chemicals Agency (VINACHEMICA) and the United Nations Development Programme (UNDP) organized a virtual workshop on “Review and integration of Green Chemistry principles into proposals for the revised Chemical Law”. This workshop aimed to support green growth and reduce the use and release of POPs/Harmful Chemicals. The revised Chemical Law will integrate the 12 principles of Green Chemistry to develop a sustainable chemical industry in Vietnam.

Vietnam's Industrial Development Strategy through 2025: This strategy document outlines Vietnam's plans for industrial development, including the processing and manufacturing industries. It mentions prioritizing the development of pharmaceutical chemistry industries after 2025.

Vietnam Furfural Market Future Outlook

By 2028, the Vietnam furfural market will continuously grow by factors such as the rising demand for sustainable and bio-based chemicals, advancements in production technologies, and increased industrial activities driving this growth. Additionally, government initiatives promoting eco-friendly chemicals and the growing focus on sustainable industrial processes will further bolster market expansion.

Future Trends

Rising Demand for Bio-Based Chemicals Over the next five years, the demand for bio-based chemicals, including furfural, is expected to increase significantly. By 2028, the market is projected to developed sustainable chemical solutions, driven by global environmental concerns and regulatory pressures. Industries will be likely to adopt bio-based chemicals to meet sustainability targets and consumer demand for green products, enhancing the market's growth trajectory.

Technological Innovations in Production Technological advancements in furfural production are expected to continue annually in research and development. Innovations such as energy-efficient production processes, advanced biomass conversion technologies, and waste reduction methods will improve production efficiency and reduce costs. These technological improvements will make furfural production more sustainable and economically viable, driving further market expansion by 2028.Â
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