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What are the Growth Prospects for Construction Chemicals Firms in Asia-Pacific?
“There is no
historical precedent for an urban transition on such a massive scale.”, said
the 2017 Urbanization and Sustainable Development in Asia and the Pacific
report published by the Economic and Social Commission for Asia and the Pacific
under the United Nations. As per the report, 2.1 billion people in Asia-Pacific
(APAC) were living in urban areas in 2017, and between 2010 and 2040, another 1
billion are expected to move to the cities. The report further said that
between 2014 and 2030, the number of megacities (cities with over 10 million
residents) in the region will increase from 17 to 22. Interestingly, these
megacities account for only a fraction of the region’s urban population, 54.4%
of which was concentrated in small and mid-size cities in 2017, which also
continue to grow in size.
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Now, though the
total number of urban residents increased significantly between 1995 and 2014,
so did the number of people living in urban slums. This clearly suggests a
rapid demand for real estate, which, in turn, would naturally lead to the
growing usage of construction chemicals in the region. The APAC construction chemicals market, which is already the largest across the world, is
predicted to advance at a CAGR of 7.1% in the next few years to ultimately
value $29,686.2 million. Adhesives, protective coatings, concrete admixtures, sealants,
asphalt modifiers, asphalt additives, flame retardants, and flooring chemicals
are among the numerous chemicals that go into constructing buildings and other
infrastructure.
Among these,
concrete admixtures are currently used the most as concrete is one of the most
essentials construction material. As admixtures enhance the qualities of
concrete, these are almost always used during construction; good-quality
concrete is the first step to building a structure that stays unaffected in the
face of sudden temperature changes, strong gusts of winds or earthquakes. This
is why concrete admixtures are so important in the construction of skyscrapers,
which have grown exponentially in APAC over the last 15–20 years. Earlier
synonymous with American cities, most notably New York, skyscrapers are now a
common feature in APAC. Just consider the transformation that Dubai, Shanghai,
Hong Kong, and Guangzhou have undergone in the last decade or so, and the picture
of the growing demand for such construction chemicals becomes clear.
This further
substantiates the fact that China ranks as the top consumer of construction
chemicals in the region; the country currently has the highest number of
skyscrapers in the world, apart from the number of people. As both these
continue to grow, so will the real estate sector, especially in urban areas. In
terms of the rate at which the Asia Pacific construction chemicals market in
individual countries is growing, India is set to outpace even China! The pace
at which India’s population is growing is no secret, and same is the case with
its cities. As per the World Population Prospects report published by the U.N.
in 2019, the fastest population growth between 2019 and 2050 will be witnessed
by just nine countries, including India.
Further, the rapid
investments in the Indian infrastructure by the government and private firms is
also raising the demand for construction chemicals. A classic example of
infrastructure developments is the construction of metro railway systems in
cities such as Delhi, Bangalore, Kolkata, Chennai, Mumbai, Lucknow, and Kochi and
the expansion and construction of airports in Delhi and Mumbai. As per the 2018
Revision of World Urbanization Prospects published by the U.N., Delhi was
already the second-largest megacity (cities with over 10 million population) in
the world after Tokyo, with 29 million inhabitants as of 2018; the Indian
capital is expected to be the most populous megacity by 2028.
Thus, the rapid
increase in population and infrastructure development will continue to lead to
the growth of the construction industry and the demand for various materials
used for the purpose in APAC.
