Desiccants

Desiccants Global Market Outlook

• In 2023E, the global desiccant demand is valued at about $2 billion and is expected to grow at a CAGR of 6–6.5 percent from 2023E to 2027F

• The key growth drivers are:

• –Growing end-use demand from the food and pharmaceuticals

• –Consumer goods

Industry Overview

• Increasing use of desiccants in the packaging industry, especially to enhance product protection in food and pharmaceutical products, coupled with the rising use of desiccants in the chemical industry, and in air conditioning systems are expected to fuel the growth of the desiccants market

• Desiccants will be more in demand in the future as electronics manufacturers make great efforts to lessen the impact of moisture on their products. Desiccants like silica gel and zeolites are in high demand on the market

Global Desiccants: Industry Trends

• Recyclable packaging materials and process optimization are the major trends that will impact desiccants demand in 2023. Companies are restructuring their supplier engagement policies to include payment terms and KPIs more explicitly, so that losses can be minimized in case of adversities.

Cost Structure Analysis – Desiccants

• APAC is dominated by supply from China, as it exports the raw material to the other neighboring APAC countries. The prices majorly depend on the China’s output.

Desiccants – Drivers and Constraints

Drivers

• Increasing Market Share of Complex Drugs in Pharma

• The market share of complex pharmaceutical drugs, such as biopharma drugs and lyophilized drugs, has been increasing consistently, especially in the western markets. Such drugs require higher moisture protection driving demand

• A number of small to medium sized biopharma drugs have emerged in the Asian market, to leverage patent expiry to manufacture biosimilars and to drive innovation in biopharma market. This has further strengthened growth

• Increasing use of desiccants in food, consumer goods, electronic packaging industry in order to reduce moisture effect on the product packaged while transportation is likely to foster desiccants market growth in the next 3–5 years

Constraints

• High machinery set up cost for manufacturing of desiccants is a major constraint across industries, like food, consumer goods, pharma, electronics, etc.

• Higher adoption of blister packaging in pharmaceutical segment. Adoption of rigid packaging options for OSDs remained low in the APAC, Middle East and Africa markets, owing to high penetration of blister packaging in these regions. As blister packs do not require desiccants, it has hindered growth in these markets Temperature and Humidity Requirements

• Many newer drug segments, such as biopharma and end-uses, such as clinical trials, have highly varying temperature and humidity requirements that cannot be provided by standard desiccants. Therefore, these segments often decide to use more complex humidity monitoring solutions which cuts into the overall market demand