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Developing guar gum alternatives

The blog is still working on a post about Ovation Biotech as well as updates on biobased adipic acid developments. Meanwhile, let’s visit the guar gum market as I’ve been hearing about how tight this market has become since last year because of its increased use in hydraulic fracturing (“fracking”), the process where hard-to-get natural gas is extracted from shale.

Guar beans

Guar gum, an extract from guar beans principally grown in India and Pakistan, acts as a food and water store and therefore is considered one of those hydrocolloids (a substance that forms a gel in the presence of water). I used to cover some of this market back when I wrote articles for Chemical Market Reporter (the predecessor of ICIS Chemical Business) about hydrocolloids such as gelatin, xanthan, carrageenan, pectin, alginates, functional starches and of course guar gum.

According to market research firm Pike Research, India produces over 1m tonnes of guar beans and exports nearly half a million tonnes annually. The drought-resistant guar bean can be eaten as a green bean, fed to cattle or used in green manure while the guar seeds are dehusked, milled and screened to obtain the guar gum. The product is mostly used in food as texturizer and thickener, as pharmaceutical additives and in oil and gas extraction.

Recently, however, increased fracking activities has made guar gum an economic alternative to other gelling agents, which keep cracks open as water and natural gas are pumped back out. Guar gum is also more environment friendly and therefore over the past two years, demand for guar gum rose from 250,000 tonnes to 480,000 tonnes per year worldwide, according to Pike Research.

Between December 2011 and April 2012, guar prices almost quadrupled forcing the Forward Markets Commission (FMC) of India to close physical guar contracts for that season to drastically reduce exports. In May 2012, prices rose as high as $25,000 per metric ton, according to US-based PacWest Consulting. This caused inflation in food prices especially in parts of India where guar is used as a primary protein source.

Since the FMC’s intervention, price of guar seeds has fallen 7% and the price of guar gum went down 6%.  As of December 2012, guar price fell to as low as $3,000/tonne. The FMC has already reopen the guar market again, but consumers of guar gum have been spooked with the volatility in prices and unstable supply that companies are now exploring alternative gelling options such as natural polymers and other carboxymethyl cellulose (CMC)- and xanthan-based formulations.

In the oilfield sector, North American oilfield service (OFS) companies, which are primary buyers of guar these days, such as Halliburton and Schlumberger announced last year their extreme concerns about the guar market and future possibility of guar seed shortages. Although they are still working on their stockpiles of guar purchased in March/April, and that guar harvest this year is expected to be 30% larger, according to PacWest, a repeat of the 2012 seedstock hoarding could still potentially drive up seed and powder prices.

Guar demand is also expected to increase in the next 3-5 years as international shale exploration and development activities will contribute to new guar demand increases. Over the next 1-3 years, guar demand is expected to be small to moderate as North American fracking activity has leveled out according to PacWest.

Last year, Halliburton, the single largest consumer of guar, announced that it has deployed its alternative to guar-based fracturing systems called PermStim. The new fracking fluid is based on a derivatized natural polymer that reportedly exhibited 94% regained permeability compared to derivatized guar fluid that exhibited 70% and only 40% for the native guar-based fluid.

The PermStim fluid system is said to have been successfully used in over 40 wells at temperatures up to 300 degree Fahrenheit last year.

Pike Research noted other companies experimenting with guar substitutes such as OFS companies Baker Hughes, Nabors Industries, and Trican Well Service as well as specialty chemical firm Ashland. The latter has already been marketing guar substitutes for food application such as its cellulose gums under the trademarks Aquacel and Aquasorb for beverage, bakery and dairy products.

Food ingredient firm TIC Gums have also introduced its Ticaloid Guar Replacement (GR) last year as a 100% replacement for guar gum in certain applications such as edible films, health food and beverages.

Another specialty chemical company, Solvay, has instead decided to expand its production of derivatized guar products by 40% in China and the USA. The company recently its expanded Vernon, Texas, US derivatized guar facility will serve customers in the North American oil and gas market, while increased capacity at Solvay’s Zhangjiagang, CHina will help its home and personal care customers meet growing demand for high-end hair care products in the region.

Solvay said it has a 50-year joint venture partnership with an Indian-based leader in guar gum and guar extracts that helps the company secure its raw material supply.

According to PacWest, one of the biggest obstacles in deploying alternative formulations was “the difficulty of developing crosslinkers and breakers that would work in combination with those formulations.”

“There has been significant progress in developing zirconium-based crosslinkers that enable CMC-based substitutes, as well as chemical and enzymatic breakers that are far more effective in cleaning out wellbores post-frac.” – PacWest

Enzyme company Verenium responded to that problem with the commercial launch this month of its Pyrolase HT cellulase, which is used as a biocatalyst to break down guar-based gel, and even carboxymethyl cellulose used in hydraulic fracturing.

Verenium estimates the addressable market in the U.S. for guar breakers in hydraulic fracturing is up to $250m, of which currently marketed enzyme products address approximately 10% or $25m. The Company believes its Pyrolase® HT can expand the share of this market addressable by enzymes beyond the current estimated ten percent.

PacWest estimates that guar substitutes in hydraulic fracturing will not capture much more than 20%, likely around 10%, share from guar especially if guar prices stay below $8,000-$10,000 per tonne.

“The substitutes do have the effect of providing a new ceiling on guar pricing, the point at which it becomes more economic to switch if guar prices escalate dramatically. With prices where they are today, the incentives for significant new investments on guar substitutes have fallen off, but several players will continue to fund their programs as a hedge against future price shocks.” – PacWest

About Doris de Guzman

Will Green Chemistry save the world or is it hype? Doris de Guzman examines alternative processing, new technology, R&D and other sustainability initiatives aimed at preventing pollution; replacing ingredients; and using renewable feedstocks in Green Chemistry. She has been covering the oleochemicals market for 12 years and spread her beat to inorganics, biofuels and green chemistry.

Discussion

9 Responses to “Developing guar gum alternatives”

  1. Dear Doris, thanks so much for the intuitive feedback on the Guar Gum markets. Will it be possible to foward me some more information on this product and how it is doing on the market since prices have soften & in relation to it’s substitutes?

    Thanks, Neil Ross

    Posted by Neil Ross | November 13, 2013, 4:05 am
    • Hi Neil,
      I do not actually follow this market too much and these are all the information I have. If you want current updates, you might like to check out this consulting firm called IMR International (http://www.hydrocolloid.com/).

      This is the last info I had (as of late October) about guar from IMR International:

      “Guar split prices are down a little at INR 145-150/kg. Arrival of the crop in India is ramping up. Demand is good but supply likely to keep prices under pressure. Guar replacement is no longer the hot topic it was in 2012 but research efforts continue.”

      Best Regards,
      Doris

      Posted by Doris de Guzman | November 14, 2013, 9:11 pm
    • There are many alternatives of guar gum in the market such as psyllium fiber, china seeds, flax seeds, gelatin, Agar Agar. These entire alternatives are useful in the different industries. This blog offers useful information about guar gums alternatives.

      Posted by Martin | May 20, 2014, 2:04 am
  2. Dear Neil Ross

    Are u interested in doing gaur business, i am from India

    Regards
    Lalit

    Posted by Lalit | December 7, 2013, 1:01 am
  3. Dear Doris De Guzman,

    Guar Gum is feeding thousands of Poor Farmers in the arid regions of India.The Oil Industry is wealthy enough to support these farmers who would otherwise lead poverty stricken lives.In fact the Oil Industry should support foundations that directly procure from Farmers and avoid middlemen who would exploit.

    Posted by Rajagopalan Murari | March 25, 2014, 9:00 am
  4. Dear sir/ Madam.
    Greetings

    WE LIKE TO INTRODUCE OUR COMPANY PROFILE & PRODUCTS. CAN WE START OUR
    BUSINESS DEAL WITH REASONABLE PRICES & BEST QUALITY.

    We are from ATB Group, Jodhpur (Raj.) Our company is one of the best quality manufactures of Guar gum powder, Food grade ,Industrial Grade, oil & drilling grades , Cosmetic grade ,
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    In case of any enquiry & requirements pls contact on below given numbers.

    Mobile no-1. Mrs.Samitha Goswamy (Sales Head) (9828066771)

    2. Mr. Saurabh Gupta (Sales director) (9828795555, 9783940005)

    Awaiting for reply.

    Skype Id:-samithagoswamy

    Please log in: – http://www.atbguargum.com

    Reference E-mail id: – sales@atbguargum.com, samitha.goswamy@atbguargum.com

    Thanks & Best Regards.

    Mrs. Samitha Goswamy
    (Sales Head)
    All that Glitters ‘is’ Gold!
    ATB GROUP,
    Paota “B’ Road, Plot No: – 226, OPP. RAJASTHAN PATRIKA OFFICE
    MAN JI KA HATTHA JODHPUR – 342001
    T:-0291-5155519, 9828066771, 9828795555, 9783940005

    Posted by atb group | May 30, 2014, 5:22 am

Trackbacks/Pingbacks

  1. Pingback: * Beans means bonanza as oil frackers turn demand for guar into gold rush | The Times | CHINDIA ALERT: Hidden Dragon, Crouching Tiger - March 15, 2013

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