Global Chemicals and Materials Industry Outlook
Recycle and reuse practices are impacting the sales of virgin materials, resulting into lesser dependency on volume-driven growth. New materials are showcasing potential for driving value-based growth, but chemical companies are still some time away from achieving voluminous production, while maintaining high quality at the same time. Barring few exceptions, a majority of players are still prioritizing short-term volume growth over long-term value growth. Pressure on improving bottom-line is influencing manufacturers to improve efficiency and reduce operational costs. The impact of value-driven growth may not be visible in the short-term, but long-term outlook remains in favor of a balanced approach between value and volume.
Manufacturers are under increasing pressure to incorporate digital solutions in their offerings. Forward-thinking manufacturers are investing in technology to reduce human interference and streamline key operational aspects such as ordering and shipping. Resonating its influence over every industry, Internet of Things (IoT) has the potential to transform and disrupt the chemical sector. Connectivity through IoT devices is gaining traction, whereas product-level sensors on dispensing equipment and barrels are helping manufacturers track their consignments digitally. Through assessment of long-term benefits, chemical companies are capitalizing on digitization by adopting digital platforms & processes that eliminate human error in profit-associated operations.
Manufacturers continue seeking low-priced feedstock in a bid to marginally reduce pre-production costs. Industry leaders are joining forces to replace fossil fuel-derived feedstock with bio-based alternatives. However, concerns related to producing affordable and sustainable feedstock at mass scale remains a challenge. Access to quality and affordable feedstock will continue to remain a focus area for manufacturers. Chemical manufacturing processes are running on limited energy, while volume of feedstock is getting stranded at ports as disapproval from import authorities keeps disrupting supply chains in sectors, such as oleochemicals and petrochemicals industries.
Chemical manufacturers have promised support and adherence to governments & regional authorities that are committing towards green, sustainable initiatives. Development of bio-alternatives is gaining momentum. Research & academic institutes are teaming up with manufacturers to formulate sustainable substitutes for commonly-used chemical substrates. Many companies are keeping a close eye on advancements in “green chemistry.” Shift towards eco-friendly chemicals will gain momentum in the future on the back of government regulations and end-user preference. Rising costs of fossil fuels will also instrument the upsurge for sustainable chemicals manufacturing.
PMR collects data from secondary sources including company annual reports, association publications, industry presentations, white papers, and company press releases apart from these we leverage over paid database subscriptions and industry magazines to collect market information and developments in exhaustive manner. After being done with desk research, detailed questionnaire and discussion guide is formulated to initiate primary research with key industry personnel; the discussion aims at collecting key insights, growth perspectives, prevalent market trends and quantitative insights including market size and competition developments. Both of these research approaches help us in arriving at base year numbers and market hypothesis.
PMR validates the data using macro and micro economic factors. For instance, growth in electricity consumption, industry value added, other industry factors, economic performance, growth of top players and sector performance is closely studied to arrive at precise estimates and refine anomalies if any.
Data Analysis and Projection
Data analysis and projections were made based on proprietary research frameworks and statistical analysis, which was further validated from industry participants. These frameworks include Y-o-Y growth projections, macro-economic factor performance, market attractiveness analysis, key financial ratios, and others.
For public companies we capture the data from company website, annual reports, investor presentations, paid databases. While for privately held companies, we try to gather information from the paid databases (like Factiva) and based on the information we gather from databases we estimate revenue for the companies. In addition, the team tries to establish primary contact with the companies in order to validate the assumptions or to gather quality inputs.
Standard Report Structure
By Product Type
This comprehensive research is based on an in-depth examination of the supply and demand structure in India for construction chemicals. The report includes region wise analysis depicting the market scenario of East, West, North and South India. The market’s growth holds a great influence of governmental initiatives for India’s development. This report also highlights region wise ongoing projects and the future projects scheduled for the years ahead.
India’s construction boom is mainly contributed by strong infrastructural growth in the country
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 Mn 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% 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.
Huge steps by the Indian Government will pave the path for robust growth in demand for construction chemicals
The use of construction chemicals is mandated by governmental regulations, which is why the Indian government’s construction initiatives have become a key driver for the growth of the construction chemicals market in the country. Between 2014 and 2017, the government of India increased the budget for highway construction by nearly 73%, i.e. US$ 33.95 Bn from US$ 19.62 Bn. The Indian government had planned the construction of 15,000 km of roads in 2016-17. The central government has decided to take various measures for the improvement of ease of starting and operating businesses in the country and hence foreign direct investment (FDI) in the country is increasing rapidly. This will in turn propel the demand for construction chemicals.
Furthermore government spending has also increased with its “Make in India” campaign that is aimed at bringing in improvements in infrastructure and industrialization of the country. The government’s plan of investing $1 trillion on infrastructure during the 12th Five-Year Plan is further anticipated to boost the demand for construction chemicals. India’s smart city project is another big leap that will have a massive impact on the country’s construction chemicals market. The smart city project is intended to develop certain Indian cities in terms of infrastructure, technology and services. Gujarat and Punjab are slated to display the highest incremental opportunities with many upcoming projects planned in these states.
Lack of expertise and inadequate project management may restrict the growth of the construction chemicals market in India
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.