Steady Demand for Use in Timber Preservation Applications to Drive Africa Creosote Oil Market
Creosote oil that is primarily obtained from coal tar or wood tar is mainly used as a wood preservative. While the global steel consumption continues to grow at a rapid pace, the production of creosote (a byproduct derived from the coking of the coal) has witnessed a steady growth. Creosote oil is predominantly used for timber preservation particularly across terrestrial regions and applications in the marine industry. In addition, as creosote oil offers exceptional long-term protection against a host of organisms, the demand is expected to witness steady growth during the forecast period, thus driving the Africa creosote oil market.
For several decades, the highly toxic nature and persistence of polycyclic aromatic hydrocarbons have been a major environmental and health concern due to which, multiple nations have increasingly imposed several restrictions pertaining to the use of creosote oil. Despite receiving criticism, creosote oil continues to gain traction as an effective wood preservation ingredient particularly in several regions across Africa. In addition, as creosote oil is extensively used to treat marine piling, railroad ties, and utility poles, the demand is likely to grow at a steady pace in the upcoming years. At the back of these factors, the Africa creosote oil market is expected to reach a value of ~US$ 44 Mn by the end of 2027.
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Continual Adoption of Oil-based Preservation Systems to Fuel Market Growth
Oil-based preservation systems wherein metal naphthenates, pentachlorophenol, bis-oxide, and creosote have been deployed for several decades and the adoption of such systems is expected to witness moderate growth in the upcoming decade. As per the analysts at Transparency Market Research, the uptake of pentachlorophenol and creosote oil is projected to continue over the next few years. Timber impregnation activities across Africa have increased at a rapid pace due to which, the demand for creosote oil is on the rise. In addition, as creosote oil has a high tolerance to insects, marine borers, and fungi, the adoption continues to move up the ladder.
The automotive sector does not directly contribute to the growth of the creosote oil market. However, carbon black, which is primarily utilized as a reinforcing material to improve the abrasion resistance of rubbers used to make automotive tires are developed using creosote oil. The growing demand for creosote oil to produce carbon black is anticipated to directly impact the expansion of the Africa creosote oil market. In addition, the growing demand for carbon black to make photocopier toners and inks is estimated to directly impact the growth of the Africa creosote oil market.
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Advent of New Protection Technologies and Alternatives to Hinder Market Growth
Although the demand for creosote oil for timber preservation continues to witness steady growth, government restrictions pertaining to its application are likely to hamper the growth of the Africa creosote oil market. For instance, the European Commission has laid down new regulations that restrict the use of creosote-based applications due to the toxic nature of the ingredient. Although creosote oil is included in the European Biocidal Products Directive’s list of approved substances, several controversies have stirred up revolving around the use of creosote oil. Bio-based alternative solutions are increasingly being investigated as a potential replacement for creosote oil due to the lower greenhouse gas emissions in comparison to the fossil-based creosote. The surge in the number of sustainable, safe, and environment-friendly alternatives is likely to hamper the demand for creosote oil, particularly during the latter half of the forecast period.
COVID-19 Pandemic: Market Players to Address Supply Chain Challenges
The ongoing COVID-19 pandemic is expected to impact the growth of the Africa creosote oil market in 2020 and the first half of 2021. While uncertainty around the timeline of when operations are likely to resume in full swing continues, players operating in the current Africa creosote oil market are expected to focus on addressing the supply-side bottlenecks during the COVID-19 pandemic. In addition, while the demand for creosote oil is likely to take a major hit during the ongoing health crisis, market players should focus on product diversification to generate revenues.
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The Africa creosote oil market is expected to grow at a moderate CAGR of ~3% during the forecast period. The market growth can be primarily attributed to the application of creosote oil in timber preservation and more, such as latex filling, utility poles, etc. While government regulations are projected to restrict the use of creosote oil in the near future, adoption is likely to remain steady in the first half of the forecast period. Market players should focus on product diversification and addressing the supply chain challenges amidst the COVID-19 pandemic to gain ground.
Africa Creosote Oil Market: Overview
- Creosote is a group of oil-like liquids manufactured from sources such as coal tar, wood tar, and creosote bush. Creosote oil is used in various applications in a wide range of industries.
- Coal tar creosote is used as a preservative for timber poles. Wood tar creosote can also be used for the same purpose; however, it is not as effective as coal tar creosote for wood preservation applications. Creosote oil-based on creosote bush is employed in medical applications.
- Based on source, the creosote oil market in Africa can be bifurcated into coal tar creosote and wood tar creosote. The coal tar creosote segment is expected to dominate the market in Africa during the forecast period. Growth of the segment can be attributed to properties of coal tar creosote such as weather resistance and termite resistance. In addition, the excellent cost-to-performance ratio of coal tar creosote is expected to drive the demand for coal tar creosote in wood preservation applications in the near future.
Key Drivers of Africa Creosote Oil Market
- Characteristics of creosote oil, such as its excellent weather resistance and termite resistance are expected to drive the demand for creosote oil in the building & construction sector in Africa in the next few years. Countries in the Sub-Saharan Africa are anticipated to be highly lucrative markets for investors and construction companies across the globe in the near future. Furthermore, the construction sector in countries such as Ethiopia, Tanzania, and Zambia is anticipated to expand at the maximum rate of more than 6% in the next five years. This growth of the construction sector is expected to drive the demand for treated wood poles. Treated wood poles are significantly used for a wide variety of applications in the building & construction industry such as structural wood, exterior fencing, and livestock fencing. This, in turn, is expected to drive the demand for creosote oil, owing to its excellent ability to treat wood poles used in the building & construction industry. Thus, increase in the demand for treated poles from the building & construction sector is estimated to drive the demand for creosote oil in Africa during the forecast period.
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Potential Effects of Creosote Oil on Health and Environment to Hamper Market
- Creosote oil is largely manufactured by the distillation of crude coal tar, which makes it highly toxic in nature. Due to this toxic nature, creosote oil can cause serious damage to the environment, if it is mixed with domestic water sources. Furthermore, wood-treated creosote oil faces issues, such as bleeding, due to which, creosote oil can leak from poles and contaminate nearby water sources.
- Bleeding issues in the wood treated with creosote oil and toxic nature of creosote oil are major factors restraining the creosote oil market in Africa. Additionally, exposure to creosote oil can lead to serious skin irritation and allergic skin reactions among humans.
South Africa to Hold Major Share of Africa Creosote Oil Market
- The creosote oil market in South Africa is dominated by manufacturers such as ArcelorMittal South Africa Ltd., FFS Refiners (Pty) Ltd, and Industrial Distillers & Refiners. Furthermore, South Africa is the leading country in the creosote oil market in Africa, as the country has facilities for the treatment of timber. On the other hand, the creosote oil market in Rest of Africa is expected to expand at a sluggish pace during the forecast period, owing to lack of manufacturing facilities in the sub-region. However, growth of the building & construction sector led by economic growth is projected to provide lucrative opportunities to creosote oil manufacturers in Africa during the forecast period.
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Leading Players in Africa Creosote Oil Market
- Usage of creosote oil has increased across Africa, due to the presence of manufacturers of sophisticated creosote oil products and high performance of these products. Key manufacturers of creosote oil in Africa include FFS Refiners (Pty) Ltd, ArcelorMittal South Africa Ltd., and Industrial Distillers & Refiners. These manufacturers are highly focused on entering into exclusive agreements, strategic mergers & acquisitions, and joint ventures in order to increase their share in a diverse range of industries.
- FFS Refiners (Pty) Ltd is a leading supplier of heating fuels and wood preservatives based in South Africa. The company manufactures and markets products for usage in various applications such as glass making, baking, incineration, brick making, billet re-heating, steam raising in boilers, laundry, road-mix heating, lime kilns, sand and stone drying, and wood preservation. The company manufactures creosote oil at its Evander facility in South Africa. The company’s production capacity stands at approximately 60,000 tons of creosote oil per annum.