Detergent makers continue to show interest in obtaining a larger percentage of their ingredients from natural plant sources, as alternatives to the more traditional—and costly—petroleum-based feedstocks, but the long-term outlook is not clear.

Until recently, ingredients obtained from coconuts, palms, soybeans and other plants seemed to have a strategic cost advantage as world oil prices soared. But oil has moderated in recent months, supplies of some petrochemical feedstocks for detergents are plentiful, and some new plant-derived detergent facilities have not started up on schedule. As a result, petrochemicals are still very much part of the detergent mix, and are likely to remain so for the immediate future.

While detergent makers, most notably Procter & Gamble, have taken steps to increase their access to natural sources for surfactants (the main cleaning agents in detergents), they have kept their formulas flexible enough to use either petroleum-sourced or natural surfactants. At Huntsman Corp., a large buyer of long-chain alcohols used to make detergent surfactants, Janice Mabe, director of base surfactants, says that the company purchases both petrochemical and plant-based alcohols. The proportions of each type, she adds, depend at least partly "on their relative economics."

Rising petroleum prices have created opportunities for oleochemicals (ingredients derived from the fats and oils of plants), particularly in Southeast Asia, where much of the new oleochemical capacity for detergents is located. According to Colin A. Houston & Associates, a Brewster, N.Y. consulting firm, capacity additions at about a dozen oleochemical plants, capable of churning out an additional 960,000 tons/year detergent-grade long-chain alcohol products, are slated to go onstream in 2007. The expanded units are located in Indonesia, Malaysia, Thailand, the Philippines, China and India. One facility is sited in Brazil.

The buildup of renewable and potentially cheaper sources of ingredients has attracted the attention of detergent makers, most of whom express interest in tapping these resources. One of the most enthusiastic advocates of natural sourcing of detergent ingredients has been Procter & Gamble, which has a supply agreement with an Indonesian company that produces oleochemicals. At that time, P&G said it had signed contracts "in excess of $1 billion" with Indonesia's Domba Mas Group to purchase the output of a new oleochemicals facility to be built in Indonesia by Domba Mas. A P&G spokeswoman says the Domba project is on track, and the first phase of the facility, with a capacity of 40,000 tons/year of detergent-grade oleochemicals, is expected to run "soon." A second phase, with a capacity of 120,000 tons/year is expected to start up in the second half of 2007, she adds.

Huntsman too is banking heavily on natural-based sources for detergent ingredients and other chemicals. In April, 2006, the company set up a strategic business unit to develop bio-based chemical feedstocks. According to Mabe, the company will soon commercialize a proprietary technology to convert plant-derived methyl esters into long-chain alcohol ethoxylates that can serve as detergent ingredients.

Rising feedstock costs are also spurring efforts to replace costly petrochemical surfactants with nonsurfactant cleansers. New classes of enzymes with enhanced lipid breakdown capabilities are among the emerging lower cost challengers to traditional surfactants, according to Per Falholt, executive vice president at Novozymes, a Denmark-based enzyme producer.

The gradual shift to plant-based sourcing of detergent ingredients, which seemed a likely scenario as recently as a year ago, is not a sure bet, points out Joel H. Houston, president of Houston and Associates. For one thing, he says, oil rates have come down in the past few months, easing upward price pressures on petrochemical-based surfactants. He further notes that two new "major plants" capable of producing LAB have just started up in Qatar and Saudi Arabia, which may contribute to an existing "surplus capacity" of LAB. This, he adds, could make synthetic detergent ingredients more price competitive with natural ones.

Meanwhile, some of those dozen oleochemical plant expansions are behind schedule, says Houston. A few units slated for completion in 2006 may not open until 2007, or even 2008. And even when the new facilities do go on-stream, he adds, their output is likely to go preferentially to Asia, where markets for detergents are booming. Markets aside, says Houston, "transportation and logistics will hinder the spread of [Asian-produced] oleoalcohols outside Asia," although he believes these ingredients will eventually find their way to the West.

At this stage, most analysts believe the petrochemical vs. natural ingredients rivalry will produce no clear-cut winners. Given the volatile price and supply situation for both petrochemical and natural detergent chemicals, says Neil A. Burns, vice president for U.S. operations for VVF, a Mumbai, India-based global soap and detergent supplier. "Over the long term I don't think you can count either one out of the picture."

Another trend is the continuing growth of liquid detergents at the expense of powders. According to market researcher Information Resources Inc. (IRI), liquid laundry detergents in the U.S. garnered some 7.5% more in sales in 2006 than they did a year earlier. Meanwhile, powdered detergent sales were down 11% over the same time span, the IRI data show.

Other ongoing trends in detergents include a shift to formulas that work at lower water temperatures, more combination products such as dual cleaning and fabric softener formulas, and the rise in private label brands.

Large retailers especially like private label brands, notes Burns. First, he says, margins are usually higher for a store's own brand than for "name" brands. Secondly, the private label brands typically sell for less than the better known brands, which attracts cost-conscious customers. Private label products are "growing very fast," says Burns, particularly in Europe.

The Colgate-Palmolive retrenchment has benefited VVF, which has acquired Colgate's Kansas City, Kan. soaps and detergents manufacturing facility. According to Burns, VVF will use the plant to expand its U.S. businesses in soaps and shampoos for hotel chains, and private label detergents for supermarket chains and mass merchandisers.

The relatively low margins Colgate-Palmolive cited as the reason for selling its detergent brands are pervasive throughout the industry and have become worse as oil prices have reached record highs. Petroleum is the source of one of the most common group of surfactants used in laundry detergents—linear alkyl benzene sulfonates (LAS)—which is made by sulfonating a petrochemical product, linear alkyl benzene (LAB). Other key surfactants for detergents such as alcohol ethoxylates, alcohol sulfates and alcohol ether sulfates have also long been obtained from petroleum-based starting materials.