Arabic Gum Processing Industry. Investment Opportunities in Production of Gum Arabic

Gum arabic, also known as gum acacia, chaar gund, char goond, meska or E414, is harvested from two types of  wild Acacia trees  found in the African Sahel from Senegal/Sudan to Somalia. A gum exuded by the African acacia trees Acacia Senegal and A. seyal, used as a thickener, emulsifier, and stabilizer in food, pharmaceutical, and industrial products.

Gum arabic is most often presented to industry in a spray-dried form. So some final products are also dried like flakes and milled and some are spray dried. Spray drying is a process where a liquid material such as milk or liquid eggs, or a concentrated aqueous (water) solution of a solid material, such as gum arabic, is heated and passed through a nozzle atop a heated chamber.

Uses

Acacia gum has been used in pharmaceuticals as a demulcent. It is used topically for healing wounds and has been shown to inhibit the growth of periodontic bacteria and the early deposition of plaque.

Arabic gums are widely used in the food, pharmaceutical, cosmetic, adhesive and paint textiles industries, for their unrivalled technological properties. Acacia gum has long been used for its functional properties. Thanks to its very low viscosity and its absence of taste and odor, Acacia gum can be incorporated in large amount in foodstuffs without disturbance of their organoleptic properties. Acacia gums are widely used in the food industry for their technological and nutritional properties.

Market Outlook

Gum arabic is a natural emulsifier and a stabiliser made from the branches of acacia Senegal and acacia seyal trees. Commercial gum farms are most popular in Sudan, Chad and Nigeria. It is an oligopoly market where Sudan accounts for about 80 percent of global gum arabic production. Trade of gum Arabic is one of the vital importance to Sub-Saharan African countries’ economic environment. There is a high demand in North America, Western Europe and Eastern Europe while North America is the largest importer of gum Arabic. In Western Europe France, U.K. and Germany are the major re-exporter of processed gum. Gum Arabic consist of soluble dietary fiber, it also acts as probiotics in food and beverage industry. Gum Arabic has a higher demand in each year owing to wide industrial uses ranging from food industry to painting industry.

On the basis of type, the market has been segmented into Senegalia Senegal gum and Vachellia Seyal gum. On the basis of application, the gum arabic market has been segmented into confectionery, sauces and dressings, bakery products, dairy products, and beverage products, among others. According to functions, the gum arabic market has been categorized into thickener, fat replacer, stabilizer, gelling agent, coating agent, and texturant.

The gum arabic market is fueled by rising demand in end-user industries, especially food & beverages, pharmaceuticals, and textiles. Additionally, major shift from synthetic chemicals and materials toward naturally sourced products is anticipated to increase demand for gum arabic in the food & beverages industry.

Food and beverages segment expected to register a high CAGR in the APAC Gum Arabic market over the forecast period

The Global Gum Arabic market is segmented into North America, Europe, Asia Pacific, and rest of the world (ROW). Rest of the world mainly North African region has the major market share followed by Asia Pacific. Majority of gum arabic produced in Sudan which is located in North African region. Gum arabic is the second export commodity and playing major role in economy of Sudan. Gum arabic from Sudan is produced from Acacia Senegal species. Plantations and naturally regenerated stands are owned by individuals, government or cooperative bodies in Sudan. From last few years gum production in India and China has increased at significant rate which is supporting the market growth in Asia Pacific region.

Increasing demand for easily soluble Gum Arabic among consumers in the global market is encouraging manufacturers to develop and produce new formulations such as instant soluble Gum Arabic. Instant soluble Gum Arabic solution is used in dry spray preparations for powder encapsulation, which is a technique that helps in the encapsulation of flavors, aromas, and colors. This increasing use of soluble Gum Arabic in beverages is anticipated to boost the food and beverages segment during the period of assessment.

·         The market's revenues, split into acacia senegal and acacia seyal (Vachellia), exhibit that the former type of gum arabic will dominate with greater revenue share, while consumption of the latter gum arabic will remain higher throughout the forecast period

·         By 2025-end, over US$ 270 Mn worth of acacia senegal will be sold in the world, while acacia seyal will witness consumption of more than 90 thousand tons

·         Food and beverage will remain the largest application of gum arabic throughout the forecast period; procuring close to 60% share over global revenues

·         Demand for gum arabic in pharmaceutical applications is also expected to gain traction, registering revenue growth at 5.6% CAGR

·         North America's gum arabic market will witness impressive growth, registering a value CAGR of 6%

·         In terms of revenues, Europe will be the largest market for gum arabic in the world, raking in more than US$ 170 Mn by end of 2025

·         Asia-Pacific, on the other hand, will showcase fastest revenue growth at 6.1% CAGR, accounting for sales of over 50 thousand tons of gum arabic towards the end of 2025

Demand for Gum Arabic for application as a natural binder in the bakery and confectionery industry is moderately high, and it represents no harm if consumed, unlike artificial or synthetic binders. Gum Arabic is broadly utilized in the food and beverages industry as an emulsifier in various product applications. Gum Arabic is steady in low pH conditions and is a moderately essential element for refreshments. Likewise, it displays low consistency properties in water and different fluids without evolving mouthfeel, flavor or texture of the original beverages. These advantages are encouraging key players in the global food and beverages industry to receive and increase applications of Gum Arabic in different food products.

Consumption of gum arabic has increased owing to its high dietary fiber content which aids in healthy digestion and bowel movement. Gum arabic could benefit patients suffering from constipation and irregular bowel movement. Moreover, increasing number of gum arabic manufacturers are focusing on securing regulatory clearance for inclusion of this emulsifier as an ingredient in food products. Powder encapsulation, which will remain to be one of the most instrumental production procedure in pharmaceutical industry. Colorless, tasteless, odorless, and high water-solubility are key properties of instantly-soluble gum arabic, which are benefiting the encapsulation of flavors, aromas and colors in powdered form.

Global Gum Arabic Market is projected to grow at the CAGR of 5.6%. Growing demand for gum arabic from food industry is driving the growth of gum arabic market.

The changing consumer demands and preferences have influenced the food and beverage industry in terms of product differentiation, especially in the choice of food ingredients. Gum arabic manufacturers experience intense competition because of low product differentiation. Manufacturers in the market compete based on price, distribution, and quality or grade of gum arabic. The global gum arabic market is highly fragmented due to the presence of large global players that have a vast geographical presence with huge production facilities. The demand for gum arabic is increasing rapidly because of factors such as the growing demand for vegetarian alternatives to food additives and growing application of gum arabic in bakery and confectionery products.

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