What exactly is Alkyl Ketene Dimer?
Alkyl ketene dimer (AKD) is generally utilized as a sizing agent in the paper industry. This chemical is less susceptible to hydrolysis and reacts less cellulose of fibers or paper. Thus, to make it easily react with cellulose, AKD is hydrolyzed and thereby water-based AKD is used in the industry. Water-based AKD provides sufficient hydrophobicity to the fibers that improves paper and board runnability during the coating process.
AKD is produced by synthesizing saturated or unsaturated fatty chloride with a cyclic tertiary amine in the inert solvent with temperature up to 75°C. Hereafter, tertiary amine hydrochloride salts are separated from AKD in the solvent and it is further separated with the help of distillation process. This is the most common process of obtaining AKD in the industry.
Some versatile compound can also be produced by the reaction of acid halides with tertiary amines in the base of inert organic solvents. Following this, the dimerization process of alkyl ketene is done. In the dimerization process, alkyl ketene forms with four-ring compounds, which immediately produces AKD products. AKD is usually available in solid and liquid form. Amongst the two, the solid type is more efficient, which makes it a preferable option in the production of paper and paperboard products.
What is driving the demand for AKD across the globe?
Growing awareness about sustainable packaging
Plastic has been the prime choice in the packaging industry. However, the rising usage of plastic has increased the waste on land and ocean. Plastic are less biodegradable materials that take over thousands of years to decompose. This encourages the use of AKD paper in the packaging industry.
The rise in the e-commerce activities in the emerging economies has further surged the demand for paper-based packaging solutions. Amidst the pandemic, the e-commerce industry witnessed an unprecedented growth across the globe. Rising awareness about paper and paperboard use in the packaging industry owing to environmental concerns is driving the growth of the alkyl ketene dimer market.
Stringent government regulations
Government state bodies are implementing stringent regulations and policies regarding the usage of plastic usage. Moreover, various companies are utilizing paper products to curtail the impact of plastic on the environment. In March 2021, South Australia banned the usage of single-use plastic while Metro Atlanta City in the US has taken the same initiative to ban single-use plastic products. Thus, the steps taken by several government bodies are anticipated to boost the growth of the market in the coming years.
Replacement of conventional sizing agents with AKD
Earlier, rosin was utilized as a neutral sizing agent in the paper making industry. However, paper making industry is opting for AKD due to several reasons. For example, AKD plays a major role in the paper production industry, as it reduces the impact of water contamination by facilitating recycling process of paper-based products.
The technological advancements and innovations in the manufacturing industry are anticipated to spur the demand for AKD products in the near future. The advent of Industrial 4.0 revolution has resulted in the deployment of automated machines. Moreover, the integration of Internet of Things (IoT) is expected to streamline the manufacturing process of AKD.
3 Major Challenges Faced by the Alkyl Ketene Dimer (AKD) Market
Digitization & COVID-19 Pandemic
Increasing penetration of smartphones and Internet has led the sharing of documents or images in form of digital media. This, in turn, has declined the demand for paper across the globe. In 2019, Beroe Inc., a market intelligence company, projected that the paper demand was anticipated to decline by 2.2% to 2.9% in 2020. The company added that, the newsprint industry would witness a decline of 4.5% of the business operation.
The COVID-19 pandemic had derailed the global economy. Government state bodies had imposed lockdown on the manufacturing facilities, which in turn, plummeted the production of paper across the globe. The work from home trend declined the use of paper across the offices and academic instutions. Students and employees are utilizing laptops and smartphones to write documents while restaurants and hotels are discarding bills are sending the invoice in the mail form.
Impact of the Paper Industry on Environment
Paper is made from trees and the increasing demand for paper frequently raise the issues around deforestation. Thus, to save trees, various private and government organizations have been implemented several initiatives across the globe. The drastic changes in the climate condition owing to the increasing hazardous waste disposal is encouraging consumers to move toward digitization. Even though paper is recyclable, it accounts for 26% of the landfills and releases harmful gases.
Lack of technological advancements
The paper industry is witnessing lack of innovations, which in turn, acts as a restraining factor for the growth of the AKD market. This industry requires intensive capital investment to boost the development of advanced technology in the market. The rapid digitization across the globe has further persuaded the industry players to abstain from investing heavily in R&D activities. Moreover, the rising price of pulp is creating challenges in the market growth.
Alkyl Ketene Dimer (AKD) Market Dynamics
As per the detailed report published by Growth Market Reports, the global alkyl ketene dimer (AKD) market was valued at USD 294.6 Million in 2019 and is anticipated to reach USD 348.2 Million by 2027, expanding at a CAGR of 3.6% during the forecast period, 2020-2027.
The market is segmented into types, applications, and regions. The types segment is divided into wax and emulsion. In this segment, the wax segment accounted for a large share of the market in 2019, as it improves the surface condition of paper and reduces the water recycling difficulties. The applications segment is divided into printing and writing papers, newsprint papers, and paperboard. In this segment, the paperboard segment is anticipated to exhibit a high CAGR owing to the rapid rise in the e-commerce activities.
On the basis of regions, the market is classified as North America, Europe, Asia Pacific, Middle East & Africa, and Latin America. Asia Pacific accounted for around 40% of the market in 2019 and is anticipated to dominate the market during the forecast period. Moreover, the market in Asia Pacific is expected to expand at a CAGR of 3.9% in the projected timeline. In this region, China is the major producer of paper and paperboard products.
Major Companies and Their Developments in the Market
The Finland-based company is a chemical company, which serves paper & pulp and water industries. To expand its portfolio in the paper industry, the company acquired BASF’s alkyl ketene dimer emulsion business. This move was to strengthen its foothold in Europe. In December 2018, Kemira entered into a joint venture with Shandong Tiancheng Wanfeng Chemical Technology, a China-based AKD player. This joint venture was to secure its supply for AKD wax.
The Asia-based company has its own AKD product in the Wilmar AKD. The product goes through its patented Toluene-free process. Wilmar International had signed a joint venture (JV) with Kemira for the manufacturing of AKD wax in China. The former company is one of the leading producer of stearic acid, which is a key raw material used in the production of AKD. This JV was expected to enhance Wilmar’s footprint in Asia Pacific.
Other prominent players of the market include Arakawa Chemical Industries, Ltd., Harima Chemicals Group, Inc., SEIKO PMC Corporation, Solenis LLC, Aries Chemical, LLC., and Finor Piplaj Chemicals Limited. Some of these key players of the market are engaging in partnerships, mergers, collaborations, and long-term agreements to expand their market share. Moreover, they are focusing on increasing their profit margins by developing advanced manufacturing process.
Alkyl ketene dimer (AKD) market is anticipated to grow at a sustainable rate during the forecast period. However, the declining demand for printing paper is expected to inhibit the market growth. On the other hand, the steady rise in the demand for coated papers owing to the increasing spending of companies on advertising and other purposes are expected to propel the market growth in the projected timeline.