Saudi Arabia Formic Acid Market

Saudi Arabia Formic Acid Market Analysis

The Saudi Arabia Formic Acid Market is expected to register a CAGR of 4.26% during the forecast period.

The outbreak of COVID-19 did not have a vast impact on the demand for formic acid in Saudi Arabia as the major industries consuming it, like animal feed and pharmaceuticals, did not witness much fluctuation in terms of its demand. However, the demand from the leather and textile industry did witness a slump. However, the situation substantially improved in 2021 with the easing of pandemic-related restrictions.

• One of the major factors driving the market studied is the growing demand for formic acid from the animal feed and sillage additives industry, owing to the increased focus on food security and animal safety.
• On the flip side, the increasing usage of urea sulfate as an alternative in the tanning industry will likely negatively impact the market demand.
• Growing inclination toward the usage of formic acid in fuel cells, with the increased emphasis on sustainability, is expected to offer various opportunities for market growth over the forecast period.

Saudi Arabia Formic Acid Market Trends

Growing Demand for Formic Acid from Animal Feed

• Formic acid is used as a preservative and anti-microbial agent in animal feed. The demand for animal health products is growing in Saudi Arabia due to increasing animal diseases.
• As per the Agri-Agri-Food Outlook 2023 report by Alltech, Iran and Saudi Arabia are two major compound feed producers in the Middle East. The average annual compound feed production in Saudi Arabia is around 7 million tons, of which broiler feed accounts for the most produced feed type, with an average annual production of 4.5 million tons.
• Saudi Arabia is a net importer of animal feed preparations, indicating that more than the production in the country is needed to cater to domestic demand. As per the data from the International Trade Centre, Saudi Arabia imported 136.3 kilotons of preparations used for animal feeding in 2022, showcasing a surge of over 163% concerning the previous year.
• Several companies in Saudi Arabia have been collaborating and investing in the feed market owing to the robust demand. For instance, in November 2022, Calysseo announced plans to develop a new alternative protein facility in Al Jubail, Saudi Arabia, in partnership with Food Caravan. The facility will include a 100-kiloton fermenter to produce Calysta's novel protein ingredients. The facility is expected to become operational by the end of 2026.
• All such factors stated above positively drive the demand for formic acid from the animal feed and silage industry in Saudi Arabia.

Increasing Investments in the Pharmaceutical Industry

• Formic acid is prominently used in the pharmaceutical industry as an intermediary and for synthesis. For instance, this acid is widely used to synthesize insulin. Increasing demand for healthcare services to support the aging population and treat chronic diseases has fuelled the government's and global firms' interest in investing in the Saudi Arabia pharmaceutical industry.
• The government of Saudi Arabia is highly inclined towards expanding the pharmaceutical industry to achieve health and pharmaceutical security. In line with its goals, it has been working on organizing and developing vital medicines, setting and implementing a strategy for regulating the vaccines and vital medicines industry, implementing rules and standards for building factories for vaccines and vital medicines, and taking all necessary procedures concerning the construction of those factories.
• In October 2022, the Chairman of the Saudi Minister of Industry and Mineral Resources announced the launch of several investment opportunities in the vaccines and vital medicines industry worth USD 3.4 billion. As per the Chairman, the investment will be made in stages; the first stage will focus on vaccines and vital medicines, followed by insulin production and plasma collection centers in the long run.
• Moroever, in November 2022, Saudi Pharmaceutical Industries & Medical Appliances Corporation (Spimaco) commenced its new plant in the Qassim region with a total investment of SAR 272 million (USD 73 million) to manufacture several hazardous drugs.
• Therefore, such factors above are expected to positively influence the demand for formic acid from the pharmaceutical industry in Saudi Arabia.

Saudi Arabia Formic Acid Industry Overview

The Saudi Arabian formic acid market is consolidated by nature. Some of the major players (in no particular order) in the market include BASF SE, Petroliam Nasional Berhad (PETRONAS), Shandong Acid Technology Co., Ltd., Huanghua Pengfa Chemical Co., Ltd, and Gujarat Narmada Valley Fertilizers & Chemicals Limited, among others.

Saudi Arabia Formic Acid Market Leaders

Saudi Arabia Formic Acid Market News

October 2022: Petroliam Nasional Berhad (PETRONAS) announced the acquisition of Perstorp, a specialty chemical company and also a producer of formic acid based in Sweden, in order to expand its global specialty chemicals business. As Perstorp also catered to the demand in the Saudi Arabia market, the strategic acquisition will also help PETRONAS to increase its customer base in the country through this acquisition.