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Product Profile: Ethyl Acetate

Introduction

Ethyl acetate (systematically ethyl ethanoate, commonly abbreviated EtOAc or EA) is the organic compound with the formula CH3–COO–CH2–CH3, simplified to C4H8O2. This colorless liquid has a characteristic sweet smell (similar to pear drops) and is used in glues, nail polish removers, decaffeinating tea and coffee, and cigarettes. Ethyl acetate is the ester of ethanol and acetic acid; it is manufactured on a large scale for use as a solvent.

Ethyl acetate is a colourless liquid with a fruityodour, having a molecular weight of 88.10. Itis slightly soluble in water and soluble in mostorganic solvents, such as alcohol, acetone, ether andchloroform. It finds use as a solvent in a wide range ofapplications, across many industries.

Applications

Surface coating and thinners: Ethyl acetate is oneof the most popular solvents and finds wide use in themanufacture of nitrocellulose lacquers, varnishes andthinners. It exhibits high dilution ratios with both aromaticand aliphatic diluents and is the least toxic ofindustrial organic solvents.

Pharmaceuticals: Ethyl acetate is an important componentin extractants for the concentration and purificationof antibiotics. It is also used as an intermediatein the manufacture of various drugs.

Flavours and essences: Ethyl acetate finds extensiveuse in the preparation of synthetic fruit essences,flavours and perfumes.

Flexible packaging: Substantial quantities of ethylacetate are used in the manufacture of flexible packagingand in the manufacture of polyester films and BOPPfilms. It is also used in the treatment of aluminium foils.

Miscellaneous: Ethyl acetate is used in the manufactureof adhesives, cleaning fluids, inks, nail-polishremovers and silk, coated papers, explosives, artificialleather, photographic films & plates.

Manufacture

Ethyl acetate is produced by the esterification reactionof ethyl alcohol and acetic acid using catalysts suchas sulphuric acid, para toluene sulphonic acid or ionexchange resins. Most of the production in India is basedon sulphuric acid catalysis; very little acid is required,though corrosion is a problem if material of constructionis not appropriate.

There are small producers using batch process for manufacture, but the larger ones use continuous columns with a reboiler for the reaction. The waterformed in the reaction (and also from the 95% alcoholused as raw material) is removed continuously. Conditions are such as to ensure maximum conversion ofacetic acid, which is costlier than ethyl alcohol.

Industry status

There are 9 units in the organized sector engaged in making ethyl acetate with the combined capacity of 5 lakh tons (see Table 1). Laxmi Organics, GNFC, Godavari Bio Refineries, Jubilant Life Science and IOL Chemicals are the major players having combined share of 73 percent of the total capacity.

Table 1: Installed Capacity for Ethyl Acetate in India in Tons per annum

Table 2 provides trend in production, exports and consumption of ethyl acetate since 2010-11. As can be seen from Table 1 and Fig.1 while production and consumption has been witnessing upward trend, exports have shown a declining trend. Exports peaked from 96 thousand tons in 2010-11 to 190 thousand tons in 2013-14 before dropping to 93 thousand tons in 2016-17. Exports during eleven months of 2017-18 were also around 93 thousand tons worth Rs. 535 crores in value.(Rs. 478 crores in previous year). Production has registered CARG of 17% while consumption has grown at 30% p.a. during the period of last 7 years.

Table 2: Production Trend for Ethyl Acetate

Source: Ministry of Chemicals and DGCIS

Table 3 provides major destinations of exports of ethyl acetate from India. Bangladesh, Belgium, Egypt, Italy, Netherland, Nigeria, Russia and Turkey are the major importers of Indian ethyl acetate.

Table 3: Destination of exports of ethyl acetate from India

Export potential not fully tapped

There still exist vast potential for exports of ethyl acetate from India as can be seen from Table 4. India has been mainly exporting ethyl acetate to Italy, Belgium, Turkey and Netherland. Even in these countries India’s share in total imports of ethyl acetate by these countries is between 5 to 13%. In South East Asian countries India’s presence is almost negligible.

Table 4 Export Potential for EA

Source: *UN Statistics

Consumption Pattern

Paints & inks and flexible packaging are the major endues segments consuming 50% of the total consumption, followed by pharmaceuticals, adhesives and aluminum foils. (see Fig 2)

Global scenario

The global ethyl acetate market is estimated to witness a CAGR of 5.8% during the forecast period. Asia-Pacific is expected to lead the market in both production as well as consumption during this period. Increasing investments and strong growth in the end-user industries, such as food & beverage, paints & coatings, cosmetics, pharmaceutical, plastics, packaging, etc. in the region is expected to drive the market.

Growing Demand for Flexible Packaging

Flexible packaging has established itself as the most sought after form in the packaging industry, owing to the benefits, such as greater flexibility, comparatively low cost, light weight of the products, different sizes, shelf life, and ease of recycling. All such benefits of flexible packaging have been increasing its application in various industries. In the past few years, it has been noticed that industries have started preferring flexible packaging, to rigid packaging. Ethyl acetate is used as solvent for high-resolution printing inks and laminated adhesives in all kind of flexible packaging and plastic films, owing to its fast evaporating properties. Therefore, the rising demand for flexible packaging is driving the demand for ethyl acetate market. The trend is expected to continue during the forecast period, as the demand for flexible packaging has been increasing with the emerging e-commerce and e-retail business.

Global Market Outlook on Ethyl Acetate

The global demand of ethyl acetate is estimated at 3.7 MMT in 2016, expected to grow at a CAGR of 4.5 percent until 2021.Asia has excess capacity, whereas North America and Europe are dependent on imports from Asia to cater the domestic demand.Capacity–demand gap during 2016–2021 is expected to narrow down, as the capacity additions announced may not cater to the expected increase in demand. Global capacity is 4.7 MMT in 2016 indicating capacity utilisation of 79%.

Market by region

Asia-Pacific Dominates the Market

Asia-Pacific dominates the market 81.5% followed by Europe 6.9% and North America1.7%. Asia-Pacific has become one of the attractive markets for investment, owing to the presence of emerging economies, such as China, India, Indonesia, etc., in the region. The industries, such as food & beverage, pharmaceutical, plastics, paints & coatings, packaging, and automotive, have been witnessing substantial investments and have also been attracting foreign investments into the sectors. With growth in such industries, the demand for ethyl acetate is projected to increase noticeably in the region. Besides this, the demand for ethyl acetate in other regions, like Europe, Middle-East & Africa, and others, is expected to be driven by the growth in demand from food & beverage, automotive, pharmaceutical and other industries in the region.

Major Players - INEOS Group Limited, Celanese Corporation, Eastman Chemical Company, Jiangsu Sopo (Group) Co., Ltd. and Jinyimeng Group Co. Ltd, amongst others.

Market by endues segment

Food & Beverage serves as the Largest End-user

Among various end-user industries, food & beverage is expected to dominate the demand for ethyl acetate, owing to its wide application as flavor enhancer in the food & beverage industry. It is extensively used for providing various flavors, such as pineapple, bananas, strawberries, and others, to food products. Strong growth of food & beverage industry, especially in Asia-Pacific because of increasing trend of online food deliveries and e-retail business in the region, is projected to drive the demand for ethyl acetate market during in the years to come.

Major Demand Drivers

Major demand drivers are the increasing downstream demand from paints and coatings, printing inks, and adhesive segments in Asia and other developing economies China and India would be the maximum demand-generating region until 2021, due to high growth rates in construction and automobile industries, which consume paints and coatings and adhesives

Market Outlook

Increasing demand for paints and coatings and adhesives in the developing regions, like China, India, LATAM, etc., due to rising construction sector and increasing auto sales, is expected to drive the demand for ethyl acetate Capacity–demand gap in ethyl acetate market is expected to reduce during 2017–2021, due to lesser capacity additions compared to the demand growth, reducing the buyer power.

Concluding remarks

There still exists enough potential for increasing exports of ethyl acetate from India. There are several countries where our presence is almost negligible while in the countries where we have been exporting our share is below 15% of the total potential.

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