23 March 2019

Construction Chemical

Chemical Activity

 

 

As rising infrastructural development in the construction sector alongside revived and evolved methodology taking precedence over traditional ones, construction chemicals play the role of a key enabler in the construction of sustainable and energy-efficient infrastructure in our future cities, reports.

 

 

 

Indian construction chemicals market has been experiencing significant growth; however, it is still at growing phase when compared to other regional and domestic markets. Construction chemicals are added with construction materials in order to improve its workability, enhance performance, add functionality, improve chemical resistance or enhance durability of civil structures. Apart from materials like concrete and steel, various construction chemicals also play a vital role in the process of developing projects, both commercial and residential. These chemicals are specialty products, being used extensively during the ‘pre-construction’ or ‘post-construction stages, to give special properties to the concrete structure, thus, providing additional stability and protection to new structures.

 

 

 

Construction chemicals are used not only to add life to the structures but also to aid in minimising quantities of cement and water required during construction. There are many buildings in India which are over 40 to 50 years old and need extensive renovation work. Therefore, the demand for such chemicals has been on the rise. Being a competitive and fragmented market, the construction chemicals industry is mostly dominated by several small and specialised suppliers.

 

 

 

Use of chemicals also minimises quantities of cement and water generally required during the construction. Rising demand for high quality construction coupled with technological advancements is expected to drive demand for construction chemicals in India during 2015-2020. Increase in infrastructure development activities, raised investments in residential and commercial housing, and construction of bridges, water retention structures, and other civil structures has consumed a substantial amount of construction chemicals all around India.

 

 

 

India’s construction chemicals market is experiencing significant growth mainly owing to the country’s industrial boom. Huge investments are taking place in India’s infrastructure market, which is giving a push to the construction and construction chemicals market. Large-scale construction activities are currently ongoing in the country. The three major categories in which construction activities find application include infrastructural, industrial and commercial, and residential. Among these segments, infrastructure is projected to continue its dominance in the upcoming years and hold a market value of over US$ 1,500 million by the end of 2025.

 

 

 

However, an increase in the government’s focus on vigorous development has resulted in various initiatives like “Make in India”, which has triggered the growth of construction in the commercial and industrial segment, which is expected to register a CAGR of over 17 per cent during the forecast period. The rise in construction activities is expected to take place mostly in Western India predominantly in Maharashtra, Gujarat and Madhya Pradesh. Gujarat and Maharashtra are the hub of production activities for many industries, thus driving the growth of the construction market, and thereby boosting the demand for construction chemicals.

 

 

 

A new research report presents an overall analysis of India’s construction chemicals market. This report depicts every detail related to the market and the dynamics impacting revenue growth. The general observation of the market shows that India is progressing rapidly in every industry sector. With rapid advancements taking place in every sphere, an exponential growth is foreseen in India’s construction and construction chemicals market. This research report titled ‘Construction Chemicals Market: India Industry Analysis 2012 – 2016 and Forecast 2017 – 2025’ reveals that the market is expected to reach a valuation of over US$ 2,600 Mn by the end of 2025, growing at a robust CAGR of 13.7 per cent during the forecast period.

   

 

            

Market Scenario

 

The construction chemical market in India was anticipated to grow at a CAGR of over 15 per cent during 2015-2020 due to cumulative construction activities and rising government and private investments in infrastructure and real estate sectors according to previous reports. In addition, 100 per cent FDI policy of the government in real estate industry is further anticipated to boost growth in India construction chemicals market during 2015 - 2020. The 12th Five Year Plan is expected to have a positive impact on the country’s construction chemicals market, as the Government of India plans to make infrastructure investments amounting to $1.025 trillion in 2017.

 

 

 

This sector is expected to maintain its dominance in Indian construction chemicals market in the coming years, due to implementation of government schemes such as Smart Cities and ‘Housing for All by 2022’. Cement consumption, estimated at 250 million tonnes per annum (tpa) currently, is likely to go up to 550-600 million tpa by 2025 while the $150-billion construction sector is already benefiting from the proposed $1-trillion investment in infrastructure during the ongoing 12th Five-Year Plan, until 2017.

 

 

These developments bode well for the growth and consumption of the dynamic construction chemicals sector at least until 2020. Global construction chemicals market between 2015–2020 is estimated to reach $33.98 billion by 2020 growing at a rate of 7.62 per cent between 2015 and 2020. The Asia-Pacific Construction Chemicals market is the biggest and the fastest growing region in the world due to the increase in construction activity, especially in India and China. The region valued at $17,495 million in 2014 in terms of revenue, is projected to reach $26,457 million by 2020. In 2012, globally construction chemical industries’ total investment on research and development of new products and applications was about 3 per cent of total sales. India’s construction chemical industry valued at Rs 3,500 crore in 2013-14, and which grew 12 per cent between 2009-10 and 2013-14, is expected to grow to Rs.7,000 crore by 2018-19.

 

 

 

Demand Equations

 

Giving an individual breakup of product verticals across the construction chemicals spectrum, the ‘India Construction Chemicals Market By Type (Concrete Admixtures, Waterproofing Chemicals, Flooring Chemicals, Repair and Rehabilitation Chemicals and Others), By Application and Competition Forecast and Opportunities, 2010 – 2020,’ published by TechSci Research, the construction chemicals market in India is projected to grow at a CAGR of over 15 per cent by 2020.

 

 

 

In 2014, concrete admixtures accounted for highest share due to the increasing population of high rise buildings. Admixtures, adhesives and sealants are expected to contribute collectively 61.2 per cent share by 2020. The report anticipates a decline in growth of repair and rehabilitation segment from 12.7 per cent in 2014 to 11.9 per cent in 2020, indicating a lack of inspection and maintenance in India’s construction industry.

 

 

 

Future Market Insights (FMI)’s report titled, “Construction Chemical Market: India Industry Analysis and Opportunity Assessment 2014 – 2020,” says the Indian construction chemicals market will clock a CAGR of 17.2 per cent during 2014 to 2020. The market is projected to reach $ 1,890 million by 2020. Utilisation of construction chemicals has witnessed significant growth in India due to increasing infrastructure development activities in the infra, urban infra and real estate segments. According to the report, waterproofing segment will register the most robust demand. In value terms the report says the Indian market is estimated at $ 1,890 million by 2020.

 

 

 

The new trend of ‘Going Green’ and Government regulations on construction of greenfield projects, or redevelopment projects, will drive the demand for construction chemicals. There is also growing preference for ready-mix concrete (RMC), which in turn is driving demand for construction chemicals in India. Other challenges faced are, volatility in raw material prices and lack of interest for implementation of quality standards by infrastructure developers.

 

 

Some major trends in India construction chemical market are increase in investment in R&D, entry of new players, adoption of sustainable products and technological advancements. Asian region is turning out to be focus point for most of the major construction chemicals companies for investment in R&D. Rising construction of new buildings and renovation activities across India is expected to boost the overall demand for construction chemicals in the near future. Most major players are ramping up capacities and expanding their product range.

 

 

 

As construction activity picks up in India’s real estate and infra sectors, it will trigger a chain reaction across the value chain, starting in the field from the end-user fraternity, culminating in robust demand for construction chemicals across product verticals. Hopefully the demand remains sustainable in the long run to foster growth of India’s very latent and yet-to-be-developed market for construction chemicals.

 

 

 

 

 

 

 

 

 

 

 

 

 

INDIA: Market Facts

 

On the basis of type, the construction chemicals market in India is segmented into flooring chemicals, adhesives and sealants, water proofing compounds, repair and rehabilitation, admixtures, and others. Admixtures constitute majority of the market with 42 per cent share. Flooring and waterproofing agents are the next leading segments with 14 per cent share each. Chemicals for repair and rehabilitation constitute another 12 per cent of the market while the remaining 18 per cent is formed by adhesives and sealants. The share of flooring chemicals is high in Indian market as compared to the developed world while India has a low share of tiling, sealants and waterproofing. The overall market is fairly consolidated but there is considerable fragmentation of individual products and application areas.

 

 

 

A large number of global construction companies have set up local manufacturing operations in India. It is reported the top 7 players account for 50 per cent of the market while the next 20 occupy 25 per cent of the market. Small and unorganised players constitute the remaining 25 per cent. On the basis of end use, the market is segmented into the residential and commercial, and infrastructure sector. Amongst these, the infrastructure sector is poised to expand at a whopping 18.30 per cent CAGR from 2014 to 2020.

 

 

 

TRENDS

 

The main trends in the market include penetration of new global market players intensifying competition and boosting market growth, adoption of cutting-edge technologies and sustainable products, and rising investment in research and development by market players. The market has shown some appreciable movement in recent times due to introduction of new properties enhancing molecules. Adoption of international standards and increase in high rise buildings in Tier I cities is driving the usage of admixtures and related construction chemicals in concrete. Corrosion prevention and control is another area which is driving the adoption of construction chemicals.

 

 

 

Over the last few years, improvements in technology have led to an increase in usage of specialty chemicals like structural adhesives, chemical and industrial flooring compounds, cement admixtures, surface coating chemicals, repair and maintenance compounds, grouts and grouting compounds, anchoring, bolting and mining products. Further there has also been increasing usage of construction chemicals used for post-treatment like grouting industrial flooring patterns; repair, rehabilitation and retrofitting materials; corrosion inhibitors and special building aids.

 

 

Factors such as increasing foreign investments, promotion of the ‘Green Revolution’ concept via the formulation of certain regulations formed by the government, and the increasing shift towards using ready-mix concrete (RMC) are amongst the major factors fuelling the India construction chemicals market. The prime factors inhibiting desired growth of the market are the absence of skilled workers, fluctuating prices of raw materials, and ignorance of infrastructure developers about implementing quality standards.

 

 

 

Demand Drivers

 

On the basis of type, admixtures constitute majority of the market with 42 per cent share. Flooring and waterproofing agents are the next leading segments with 14 per cent share each. Chemicals for repair and rehabilitation constitute another 12 per cent of the market while adhesives and sealants form the remaining 18 per cent. The share of flooring chemicals is high in Indian market as compared to the developed world while India has a low share of tiling, sealants and waterproofing. The overall market is fairly consolidated but there is considerable fragmentation of individual products and application areas. A large number of global construction companies have set up local manufacturing operations in India. It is reported the top 7 players account for 50 per cent of the market while the next 20 occupy 25 per cent of the market. Small and unorganised players constitute the remaining 25 per cent. With regard to end use, the market is segmented into the residential and commercial, and infrastructure sector. Amongst these, the infrastructure sector is poised to expand at a whopping 18.30 per cent CAGR from 2014 to 2020.

 

 

 

Developments in infrastructure investment, increase in foreign direct investment, public-private partnerships in key projects, the Smart Cities project, expansion of urban India and the consequent demand for affordable housing in tier II & III cities, maintenance, repair and renovation of structures are some positives that add to the growth of this sector. The expected 20-25 per cent increase in the ready-mix concrete segment driving demand for mechanised concrete, growing awareness for the use and application of construction chemicals and new product innovations and technologies in the market are further drivers. The growth in consumption of construction chemicals has also been spurred by increasing government regulations such as National Building Code (NBC) and green building initiatives which enforce adherence to norms and standards both in new building construction activities as well as repair and rehabilitation of existing buildings.

 

 

 

The high import cost of construction chemicals offers the domestic industry immense opportunity to expand its base and manufacture greater quality of advanced as well as green and energy-efficient products and solutions. This will also help to meet the growing demand for construction chemicals. Adoption of the green building concept and trends in India’s construction industry changing gradually, with the interest of public and private investors gradually shifting towards high quality construction and rising adoption of advanced construction technologies, raw materials and chemicals is anticipated to drive the country’s construction chemicals market during 2015 – 2020.

 

 

 

Lasting durability

 

With the rise in the Indian infrastructure there has been sound growth and development. This has led to the rise in the consumption and thus the demand for the products of construction chemicals and the products of construction chemicals is also channelizing. These are variedly liked and promoted to use for various reasons that contribute for the better working, performing, functioning of the chemical resistance of the buildings under construction. They enhance the durability of the kind of materials used for the construction purpose.

 

 

 

Recognizing innovation

 

One of the most recognizing factors while seeing the innovation trends in the industry is that, the new products are driven by the factor of adding life to the places of construction. Also, there are plenty of old buildings in India that require not only renovation but also be constructed to come alive and remain durable for a longer time in the future. More than 40-50 years old buildings’ renovation part in the lesser developed areas of India is making the market to take a rise. Moreover, the trend to fully develop the urban structure with the best building materials is also shooting the need to innovate and produce best construction chemical products on highly competitive prices. It is leading to the growing bond of the major suppliers situated at large in the fragmented market.

 

 

 

Major Challenges

 

The biggest challenge in India right now is that is a highly price sensitive market and in order to remain competitive manufacturers have to keep their margins low because most contractors prefer low-cost chemicals to reduce their overall construction costs. High value products have limited demand and are mostly used only by premium construction houses. Contractors are still not fully aware of the benefits of various construction chemicals and hence tend to use low-cost substitutes. Decisions are taken based on immediate cost and not on overall benefits achieved from the usage of these materials. The problem is further compounded by the fragmented nature of the industry. Apart from a few multinational brands and some Indian companies in the organized sector rest of the market is accounted for by the unorganised sector comprising local small-scale manufacturers, who dominate regionally due to the regional nature of India’s construction market.

 

 

 

Due to low entry barriers, competition is high and several low value products are being sold by the unorganised sector in the Indian market. The top 7 players account for about 50 per cent of the market, the next 20 players have a 25 per cent market share and the remaining 25 per cent of the market is accounted by small and unorganised players.

 

 

 

Major players in the Indian market include market leaders, some of which are global players in their products. There are many other regional and smaller players as well. Approximately 300 companies are estimated to be operating in this segment. In the past there has been a considerable change in the market share of companies due to which medium-sized and regional manufacturers have gained considerable share of market.

 

 

 

Lack of expertise and inadequate project management

 

India is a developing country and there is a great deficiency of skilled labor and professionals, especially in the field of project management, which in turn creates unfavorable situations for the growth of the construction, infrastructure and real estate sectors. Additionally, the use of conventional technology is also hampering the growth of the construction chemicals market as many of the companies are not even aware of new and better technologies available in the global market. There is a need for high investments in certain areas, which will enable companies to use advanced technologies and better raw materials. The Indian construction chemicals market is also dependent on imports. Many products are imported from China and other countries, which increases the cost of production and acts as a challenge for the domestic market.

 

 

 

Solutions

 

There is a growing need for manufacturers to invest in effective marketing of products to make users aware of product applications and benefits. The message that the cost of construction chemicals is a negligible percentage of the total build cost and in the long run leads to cost subtraction, speed in execution, durability and quality of the structure needs to be driven home to users. Developing new processes and products with sustainability as the core principle must form the core thrust of the industry.

 

 

 

This can be achieved through a collaborative platform involving academia, government and regulatory bodies, manufacturers and customers in which all stakeholders can join hands to promote and execute strategies for implementing judicious use of chemicals industry products and best practices for the construction environment. With the government’s policy and project announcements beginning to take concrete shape on the ground things should look up for the construction chemicals market through the years to come. Assuredly chemicals will play the role of a key enabler in the construction of sustainable and energy-efficient infrastructure in our future cities.

 

 

Key players

 

 

Pidilite

 

Pidilite is a consumer centric company committed to quality and innovation. The company has been a pioneer for applications from small to large. From adhesives, sealants, waterproofing solutions and construction chemicals to arts & crafts, industrial resins, polymers and more, the company has crafted a diverse and evolving portfolio.

 

 

 

BASF

 

BASF has successfully partnered India’s progress for over a century, with 13 of BASF’s 14 global businesses maintaining a local presence in India today. BASF has 2,356 employees at about 20 production sites, sales offices, and R&D centers throughout the country. In 2016, BASF Group companies registered sales of €1.1 billion to customers in India.

 

 

 

SIKA (India)

 

Sika India has 8 branch offices and requisite strength of sales personnel spread across India to meet the varied needs of the market. It has 5 state-of-the-art manufacturing units at Kalyani (West Bengal), Jaipur Bagru (Rajasthan), Jaipur Manda (Rajasthan), Kanchipuram (Tamil Nadu) and Jhagadia (Gujarat). Sika India also serves five export markets namely Sri Lanka, Nepal, Bhutan, Maldives and Bangladesh through a network of associates.

 

 

 

FOSROC

 

Fosroc is a leading international manufacturer and supplier of high performance chemicals for the construction industry, with a particular focus on concrete and cement. A British heritage brand, Fosroc began over 80 years ago and has become the go-to name for construction companies, offering a wide range of products and brands including Nitoproof, Nitoseal, Proofex, Supercast, Conplast and Dekguard.

 

 

 

STP Limited

 

STP Limited, a member of Turner Morrison Group, formerly known as Shalimar Tar Products Limited, has been serving India, primarily in waterproofing and protective coatings, since 1935 – a little over 75 years. STP enjoys 75+ years of trust of its customers built assiduously through timely delivery of quality products. STP has been the leader in the Indian waterproofing / damp-proofing market.

 

 

Fairmate

 

Fairmate is a European multinational company having its international headquarter in Tallinn (Estonia). The company is into manufacturing wide range of construction chemicals. Fairmate has earned its place as one of the most innovative company as it deploys its world-class technology in construction chemicals to seize market opportunities and solve some of the world’s biggest challenges.

 

 

 

Cera-Chem

 

Cera-Chem is one of the first truly Indian construction chemicals manufacturer. The company believes in quality service to customers. Its product range comprises of products for almost every conceivable high performance construction chemical industry requirements across extensive range of sectors including, industrial, commercial, residential, marine and infrastructure.

 

 

 

Mapei

 

Mapei’s the leading company in the building industry, with over 80 years of experience, in the field of adhesives, sealants & chemical products for building. The Group now has 82 subsidiaries with 79 production facilities in 34 different countries. There has always been a lot of emphasis on research. In fact, around 5 per cent of annual turnover into Research & Development and 70 per cent of research work is aimed at the development of eco-sustainable and eco-compatible products.

 

 

 

These are some of the leading players operating in India construction chemicals market. It is easy to see that the changing dynamics of Indian construction industry are expected to significantly impact the construction chemicals market in the future




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