Need to Reduce Reliance on Petrochemicals Stimulates Southeast Asian Bioethanol Market, Finds Frost & Sullivan

Singapore - September 8, 2009 - The Southeast Asian bioethanol market is brimming with opportunities following the recent industry growth, rising number of entrants, and intense competition for best market positioning. The expansion of current producers, backed by the influx of new participants, has dramatically increased local production over the last three to seven years. The governments have also laid strong emphasis on bio-based fuels to lower dependency on petrochemicals, assuring the Southeast Asian market of steady demand in future.

New analysis from Frost & Sullivan (, Southeast Asian Bioethanol Market, finds that the market earned revenues of $529.7 million in 2008 and estimates this to reach $6.17 billion in 2015 due to its potential as a next-generation biofuel and the pushing up of production within the region.

The volatility of fossil fuel prices and their impact on the economy have pushed governments to promote the use of various renewable energy sources using locally available feedstock. They have implemented policies such as the National Energy Policy or National Biofuels Programs to encourage the use of alternative energy sources.

The usage of bioethanol in gasoline formulation is nearly untapped and holds great potential, especially considering the current high domestic demand of fossil gasoline across Southeast Asia. Governments are promoting energy diversification efforts, particularly because bioethanol programs will offer a chance for rural development in Southeast Asia's poorer regions. Bioethanol will fare better as a gasoline additive than an energy fuel.

"A standard electronic fuel injection gasoline engine will typically tolerate up to 10 percent ethanol and 90 percent gasoline," says Frost & Sullivan Research Analyst Ratneswary Balasingam. "Should higher ethanol ratios be used, larger-volume fuel injectors or higher fuel rail pressure will be required to deliver energy content equal to that obtained from pure gasoline."

Despite its potential, there are few R&D activities in gasohol formulations for reducing the effects of engine suitability and component issues. The lack of awareness of the benefits of bioethanol restrains the market from growing rapidly.

Bioethanol producers are also under immense pressure to acquire appropriate feedstock, as it must be a competitive source of bioethanol and should not compete for cultivation space with food. Generally, Southeast Asian companies produce molasses from sugar cane, which is the primary feedstock used in most bioethanol production. Molasses are also exported and used by other food-based industries such as in amino acid, rum, spice flavoring, feed, and ketchup.

"However, cassava is being seriously considered by government officials and local producers due to its potential to offer employment in poorer areas and reduce competition between raw materials for bioethanol and food," notes Balasingam. "A liter of bioethanol can be produced directly from 6.5 kilograms of cassava compared to a liter of bioethanol produced directly from 15 kilograms of sugar cane and 4 kilograms of molasses, respectively."

As bioethanol holds great promise as a new energy fuel, it is gaining popularity among both foreign and local producers, fostering competition. To milk its potential, local governments and bioethanol producers can educate the consumers on the 'green' and product-enhancing qualities of bioethanol as fuels and select better feedstock to ensure continuous production.

"Governments can offer tax reductions or subsidies for the use of bioethanol at the implementation stage to end users," observes Balasingam. "Producers can resort to strong product branding, better quality standards, and provision of trial products to gain control of market share."

Most producers pass on the development costs to the end users, unless they are aided by government funds and regional development programs. They can implement extensive product logistics and promotions to gain an edge over competitors and acquire new customers.

If you are interested in a virtual brochure, which provides a brief synopsis of the research and a table of contents, then send an e-mail to Donna Jeremiah, Corporate Communications, at, with your full name, company name, title, telephone number, company e-mail address, company website, city, state and country. Upon receipt of the above information, a brochure will be sent to you by e-mail.

Southeast Asian Bioethanol Market is part of the Chemicals & Materials Growth Partnership Services program, which also includes research in the following markets: Southeast Asia Oleochemicals Market, Southeast Asian Market for Construction Chemicals, Southeast Asia Plastic Flexible Packaging Market for Food, Indonesian Bio-Ethanol Market, Southeast Asia Thermoplastic Elastomers Market, and Global Methyl Ester Sulphonate Market. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants.

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 35 offices on six continents. To join our Growth Partnership, please visit

Southeast Asian Bioethanol Market


Donna Jeremiah
Corporate Communications – Southeast Asia
P: +603 6204 5832
F: +603 6201 7402

Carrie Low
Corporate Communications – Southeast Asia
P: +603 6204 5910
F: +603 6201 7402



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