18 October 2019

Table of Contents for Construction Chemicals





Construction Chemicals

Headed for boomtime

 

With the Indian government showing serious intent to implement its urban infrastructure development agenda the construction chemicals industry expects to emerge as a key enabler of the smart cities of the future.

 

Thanks to rapid urbanisation, changing lifestyles, improving living standards and growing demand for aesthetically designed residential and commercial buildings an exponential growth is being seen in the Indian construction chemicals market. Construction Chemicals are specialty chemicals or compounds added to construction materials for improving their performance, workability and compatibility with the construction structure. The additives impart structural and functional properties such as durability, finish and resistance to adverse conditions to the finished structure. 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.

 

Notwithstanding this the Indian construction chemicals market can be said to be still at a nascent stage. A combination of limited awareness of the products and their benefits, not to mention price conscious customers, have led to restricted consumption levels than in other peer markets. There is admittedly a huge gap and an opportunity for India’s construction chemicals industry to fill.

 

 

 

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.

 

Pidilite, Apple Chemie, BASF SE Chemicals, Chembond Chemicals, CICO Technologies, SIKA (India), Perma Chemicals, FOSROC, Mapei India, and Fairmate Chemicals 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

 

 

 

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 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 by 15 per cent per annum and double to `7,000 crore by 2018-19.

 

The industry sees prospects of increased growth on the back of demand from ambitious programmes like Smart Cities and ‘Housing for All’ which have been announced by the Narendra Modi led NDA government. These and other projects will open up huge business opportunities for the construction chemicals sector. Notably in the new urbania being planned where construction chemicals could play a crucial role in the development of robust and sustainable infrastructure. Thanks to the high cost of land most of the housing units being planned will require to be high rise constructions. Those will of necessity require modern construction technology aided by specialty construction chemicals. Apart from the new structures being planned, expansions, maintenance, repair and renovation of existing structures in cities presents a huge business opportunity.

 

Further the current government restrictions on on-site mixing have boosted demand for ready-mix concrete, a sector which in turn drives the demand for the use of concrete admixtures, which accounts for the largest share in the construction chemicals market in India. Construction chemicals have also assisted the economic uptake of manufactured aggregates particularly in areas where excavation of river sand beds faces restriction or ban. Concrete admixture solutions contribute to the robustness of the concretes produced with manufactured aggregates.

 

 

 

CHALLENGES

 

Notwithstanding the strong growth drivers, the construction chemicals industry is underdeveloped – in comparison China is much larger at nearly $8 billion and faces some challenges which will have to be addressed. These include low consumer awareness levels regarding new chemical techniques and construction aids, lack of skilled labor and high price-sensitivity of customers which leads them to use poor quality low cost substitutes, purchase decision making which ignore the overall cost of ownership (life-cycle cost) merits; and competition between MNCs and local manufacturers leading to selling of low value products in the market thanks to low entry barriers.

 

 

 

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 2016 and beyond. Assuredly chemicals will play the role of a key enabler in the construction of sustainable and energy-efficient infrastructure in our future cities.

 

 

 
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.

 

 

 

 

VITAL STATS
  • Global construction chemicals market in 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, and 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 `3,500 crore in 2013-14, and which grew 12 per cent between 2009-10 and 2013-14, is expected to grow by 15 per cent per annum and double to `7,000 crore by 2018-19.

 

 

 

KEY PLAYERS
  • BASF
  • Cico
  • Dow Construction Chemicals
  • Fairmate
  • Fosroc India
  • MC-Bauchemie
  • Sika India

 




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