Lactic acid is a chemical compound which is used in various biochemical processes, and is also known as milk acid. Polylactic acid, commonly referred to as PLA, is renewable thermoplastic polyester derived from corn starch, sugarcane and tapioca roots in various parts of the world. PLA represents the largest application segment for lactic acid. Traditionally, lactic acids were being used in the food and beverages industry, which accounted for the maximum lactic acid produced globally. But owing to a demand for sustainable plastic materials in a bid to reduce the impact on the environment, PLA has replaced food and beverages as the largest application of lactic acid. As per ResearchMoz, some of the major factors that are driving the growth of the global market include the growing demand for biodegradable plastic materials. Gaining cost competitiveness against its synthetic counterparts remains a major challenge for the major players. North America is the leading market for lactic acid, which accounted for approximately 35% of the global market in 2011. North America is followed by Europe and Asia-Pacific with almost an equal market share in 2011. Packaging represents the largest application for PLA primarily from the food and beverages industry. Europe is the leading market for PLA owing to stringent regulations imposed on the use of synthetic plastic materials for packaging.

The global Polylactic Acid (PLA) market is expected to reach US$5.2 bln by 2020 growing at a CAGR of 19.5% from 2013 to 2020. Asia Pacific will be the fastest growing market at a CAGR of 21.6% during this period, whereas Europe will maintain its lead in terms of revenue till 2020, despite having a comparatively slower growth, as per Allied Market Research. Governments across the globe have been instrumental in imposing a ban on the use of fossil fuel-based products such as plastic bags and are also providing incentives for bio-based PLA production. Moreover, the rising petrochemical prices in association with growing awareness for environment safety have been the prime contributors towards the growth of Polylactic Acid market. As per AMR analysts Sarah Clark and Ranjan Singh, "The ongoing research on reinforcement of PLA with other materials would bring opportunities for PLA with much improved products in future." Low-cost and easy availability of raw materials are key factors that are contributing to the cost-effectiveness of PLA. The production costs are however, expected to further reduce with research focused on identifying alternative sources of raw materials. Certain restraining factors exist which will restrain the growth of PLA market. Need for industrial composting to completely degrade PLA, will act as an important restraint. PLA is thermoplastic polyester derived from renewable feedstock such as corn starch, sugarcane, wheat, tapioca roots. PLA has wide application such as in packaging, textile, agriculture, transportation, bio-medical and electronics industry. Due to environmental concerns and scarcity & volatility of prices of fossil fuels, many companies and government regulatory bodies are focusing to find substitute to oil-based products. Moreover, bio based plastics has huge potential to reduce the consumption and dependency on petroleum based feedstock and lessen negative impact on environment by reducing carbon footprints. Thus, PLA has emerged mainly as source of biodegradable plastics available in the market in recent years. Furthermore, ongoing research and technical development in the field of bio-based plastics have enhanced their properties such as high temperature resistance, increasing scope of its application market. Meanwhile, raw materials such as corn, genetically modified wheat, sugarcane, etc. are abundantly available in Asia Pacific, mainly China, thus manufacturers can take advantage of this in availing cost benefit. Moreover, distribution channel also plays a vital role in the life cycle management of PLA due to presence of wide range of end user application. The global PLA market is presently facing supply crunch as few international manufacturers trying hard to meet rapidly rising demand for bio-based plastics. Thus, it is anticipated that the global Polylactic Acid market will grow at a double digit growth rate. PLA finds application in packaging, textile, agriculture, transportation, bio-medical, electronics and others. Packaging industry captures major share of the application market especially food packaging industry. Furthermore, it is preferred in food packaging industry due to increasing awareness about environmental concerns possess by the use of conventional plastics packaging. Moreover, bio-based plastics have lower carbon footprint as compared to fossil fuel plastics and hence is considered as a potential solution to prevent harmful impact on the environment caused by carbon footprints. Due to technological development and ongoing research on PLA production process it is anticipated that the market will find new application with better performance property. The demand of PLA in textile, packaging, transportation will continue to grow due to faster growth in end user industries.

Global poly lactic acid market is expected to reach US$2.6 bln by 2016 at a CAGR of 28%, globally, as per Axis Research Mind. Region-wise analysis shows that Asia-Pacific is forecasted to record the highest growth rate of 29.3% from 2011-2016. Europe follows Asia-Pacific with a CAGR of 28.9%. The Americas forecasts to drive the global market with a 27.3%. Volume based studies reveal that the maximum share of growth rate is expected from Asia-Pacific region. Comparing the end-user industries, textiles and electronics are going to be the major supporters of this market.

Global demand for biobased and biodegradable plastics will rise 19% pa to 950,000 metric tons in 2017, as per RnRMarketResearch.com. The bioplastics industry, while still in the emerging growth phase, has established itself as a fixture in a number of commercial markets and applications. Robust growth in demand is expected in virtually all geographic markets, stimulated by consumer preferences for sustainable materials, the increased adoption of bioplastics by plastic processors and compounders, and new product development that expands the range of uses for bioplastics. Despite the rapid increase in demand, bioplastics are still expected to account for less than 1% of the overall plastic resin market in 2022. The success of the bioplastics industry will ultimately depend on price and performance considerations, and large scale conversion to bioplastics will not occur until price parity with conventional plastic resins is achieved. Starch-based resins and polylactic acid (PLA) will remain the leading bioplastic products through 2017, combining to account for over 60% of demand. For starch-based resins, advances will be bolstered by increased regulation of conventional plastic products, particularly plastic bags, as governments around the world continue to promote sustainability PLA demand will benefit from the development of resins and compounds with enhanced performance for more durable applications such as fibers, automotive parts, and electronic parts. The most rapid gains in demand, however, are expected for biobased commodity resins such as polyethylene and polypropylene, which are just beginning to enter the commercial market. The rapid adoption of these bioplastics will be fueled by their ability to be used as a “drop-in” for existing applications, as well as an increased focus on biobased content rather than biodegradability as a desired attribute. By 2022, biobased polyethylene terephthalate (PET) is also expected to become available in commercial quantities and begin to penetrate the beverage container market. Western Europe was the largest regional consumer of bioplastics in 2012, accounting for over half of global demand. The region will see strong gains through 2017 as well, bolstered by added regulations and incentives that favor bioplastics over conventional resins. North American demand is expected to more than double, driven by rising consumption of PLA and biobased commodity resins. Advances in the Asia/Pacific region will be fueled by robust growth in China, which has become a major consumer of bioplastic resins used to produce manufactured goods for export. World bioplastics production used to be concentrated in the US and Western Europe. This began to change in 2012 as production of biobased polyethylene came online in Brazil, and the addition of future capacity will likely make the country the world’s leading producer of bioplastics by 2022. Furthermore, China and Thailand are expected to become some of the top world bioplastics producers.