India Construction Chemicals Market, By Region, Competition, Forecast and Opportunities, 2020-2030F

Report
85 Pages
August 2024
Region: India
TechSci Research
ID: 4614563

India Construction Chemicals Market was valued at USD 3.76 Billion in 2024 and is expected to reach USD 5.17 Billion by 2030 with a CAGR of 5.64% during the forecast period. Construction chemicals are essential for improving both the performance and durability of building materials and structures. This category encompasses various products, including adhesives and sealants, which are used for bonding and sealing applications within construction. Concrete admixtures are another critical component, as they modify the properties of concrete through additives like water reducers, retarders, and accelerators. Additionally, protective coatings play a significant role in shielding surfaces from environmental damage and wear. Repair and maintenance chemicals, such as epoxy resins and grouts, are crucial for restoring and maintaining the integrity of construction structures.

The demand for construction chemicals is driven by several factors. Government projects, such as the Pradhan Mantri Awas Yojana (PMAY) and infrastructure development initiatives under schemes like the PM Gatishakti National Master Plan (NMP), are significantly boosting the need for these products. The emphasis on smart cities and modern infrastructure is further accelerating the demand for high-performance construction chemicals.

Market dynamics are affected by fluctuations in raw material prices, including polymers and additives, which can impact profit margins. A notable trend is the growing emphasis on eco-friendly and sustainable construction chemicals. Green building materials and low-VOC products are increasingly gaining traction, reflecting a broader commitment to environmental sustainability. Innovations such as smart or responsive chemicals that adapt to environmental conditions are becoming more prevalent, alongside the increased use of digital tools in manufacturing and application processes.

The influx of foreign direct investment (FDI) into the Indian construction sector is also contributing to the growth of the market for construction chemicals. The development and use of nanomaterials are enhancing key properties like durability, strength, and resistance to environmental factors. These materials also feature self-repairing capabilities, reducing maintenance needs and extending the lifespan of structures. The rise of digital platforms for marketing, customer engagement, and education is improving product awareness and driving adoption. Companies that focus on sustainability, innovation, and customer-centric approaches are likely to excel in this evolving landscape.

Key Market Drivers

Rapid Urbanization and Infrastructure Development

As cities grow and new urban areas are developed, there is an increasing demand for residential, commercial, and industrial buildings. This rise in construction activity necessitates the use of construction chemicals to ensure the quality and longevity of structures. Major infrastructure projects, including roads, bridges, airports, and public transit systems, require a variety of construction chemicals to enhance material performance, ensure durability, and address complex construction challenges.

Construction chemicals improve the durability of infrastructure projects, making them more resistant to environmental factors such as weathering and chemical exposure, which is essential for maintaining long-lasting urban infrastructure. Urbanization drives a real estate boom, with new residential and commercial projects demanding a range of construction chemicals to meet modern standards and consumer expectations. According to the Reserve Bank of India (RBI), Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (InvITs) have accumulated USD 15.60 billion over the past four years ending March 2024.

The adoption of new construction techniques and technologies, such as precast concrete and modular construction, relies on specialized construction chemicals for optimal performance. The government's dedication is demonstrated by its allocation of 3.3% of GDP to the infrastructure sector in fiscal year 2024, with a special focus on transport and logistics. Government initiatives like the Smart Cities Mission and various infrastructure development schemes, such as Housing for All, are boosting investment in urban projects and driving demand for construction chemicals. The National Infrastructure Pipeline (NIP) includes projects worth USD 1.3 trillion currently in various stages of implementation.

The construction of high-rise buildings and skyscrapers due to urbanization necessitates specialized construction chemicals, such as high-performance concrete admixtures, waterproofing solutions, and sealants, to ensure structural integrity and safety. As infrastructure ages, urban areas frequently require maintenance and rehabilitation, with construction chemicals playing a crucial role in repairing and restoring existing structures to meet current safety and performance standards.

Rising Demand for High-Performance Building Materials

High-performance building materials, such as advanced concrete mixes and high-strength adhesives, enhance durability and structural integrity, necessitating the use of specialized construction chemicals to further optimize these properties. In 2023, Pidilite Industries partnered with Jowat SE, a German supplier of industrial adhesives, to offer locally manufactured thermoplastic hot melt adhesives under the Fevicol Jowat brand for various industrial applications. These advanced materials often require specific additives and treatments to extend their lifespan and improve their resistance to wear, thus driving demand for specialized construction chemicals.

As building standards evolve, there is an increasing need for innovative construction chemicals that support new high-performance materials, including advanced admixtures, coatings, and sealants that improve material properties. Stringent building codes and standards necessitate the use of these high-performance materials and accompanying construction chemicals to meet safety, efficiency, and environmental regulations.

In 2023, JK Lakshmi Cement Ltd began commercial production of Portland calcined clay limestone cement (IS 18189:2023), also known as LC3, in India. This cement, produced with a mix design of 50% clinker, 32% calcined clay, 12% non-commercial grade limestone, and 6% gypsum, adheres to the Indian Standard for Portland Calcined Clay Limestone Cement and will be supplied to Noida International Airport (NIA).

Modern construction techniques and materials, such as high-performance insulation and energy-efficient glazing, frequently rely on advanced construction chemicals to achieve optimal results. In 2023, Sika AG opened a new facility in Kharagpur, eastern India, to produce mortar products, concrete admixtures, and shotcrete accelerators for the West Bengal region. Builders and developers use high-performance materials to stand out in a competitive market, which drives the demand for innovative construction chemicals that complement these materials.

In January 2024, Magma launched MagFix, a new high polymer modified, cement-based tile adhesive designed to meet the evolving needs of the construction industry. MagFix features two specialized grades, MagFix Ultra and MagFix Supreme. Additionally, in 2023, Hindware Tiles expanded its product lineup with new tile ranges, including GSVT Tiles in 600×1200 mm dimensions with matte gloss and veneer finishes, GVT Elevation tiles in 300×600 mm for interior and exterior cladding, and high-depth elevation tiles for various projects.

Investing in high-performance materials and construction chemicals not only enhances construction efficiency but also reduces long-term maintenance costs by decreasing the frequency and extent of repairs and replacements.

Key Market Challenges

Raw Material Price Volatility

Fluctuations in the prices of essential raw materials such as cement, polymers, resins, and additives can result in unpredictable production costs, making it difficult for manufacturers to maintain consistent pricing for their products. This volatility can erode profit margins, particularly if manufacturers cannot pass these increased costs onto customers, thereby affecting financial stability and profitability. The challenge of setting competitive and sustainable pricing strategies is compounded by the volatility of raw material costs, leading to frequent price adjustments that can cause customer dissatisfaction and market instability. Additionally, the unpredictability of raw material prices complicates budgeting and financial forecasting, impacting long-term planning and investment decisions. Negotiating with suppliers becomes increasingly complex amid fluctuating prices, prompting companies to secure long-term contracts or seek alternative sourcing strategies to mitigate price risks.

The volatility of raw material prices can also restrict resources available for research and development, as more funds are diverted to managing these costs, thus limiting investment in new product development. Companies that struggle to manage these price fluctuations effectively may find it difficult to compete with those that can better absorb or mitigate these costs, affecting market share and overall competitiveness. To manage raw material price volatility, companies might adopt strategies such as diversifying suppliers, entering long-term supply agreements, investing in alternative materials, and utilizing advanced forecasting and risk management techniques.

Regulatory Compliance

Navigating the intricate array of regulations and standards across different regions and countries can be challenging for manufacturers. They must comply with a variety of local, national, and international regulations, which can be both time-consuming and expensive. For instance, the National Building Code of India (NBC) serves as a comprehensive guide for regulating construction activities nationwide, outlining the necessary processes and standards for building construction. It covers guidelines for institutional, commercial, and residential buildings, ensuring structural integrity and enhancing safety by reducing the use of hazardous materials.

Meeting regulatory requirements often entails substantial costs for testing, certification, and documentation, impacting the overall profitability of companies in the construction chemicals sector. The rigorous testing and certification needed to comply with these standards can be both lengthy and complex, potentially delaying product launches and extending time-to-market. Additionally, adhering to strict environmental and safety regulations requires investments in cleaner technologies and safer chemical formulations, which can be both costly and technically demanding. Maintaining accurate records and thorough documentation to demonstrate compliance with these regulations adds to the bureaucratic burden, necessitating detailed reports and submissions to regulatory bodies.

Key Market Trends

Increased Demand for Sustainable Solutions

There is a growing demand for construction chemicals with low or zero volatile organic compounds (VOCs) due to their benefits for indoor air quality and environmental impact. Products that achieve green building certifications, such as LEED (Leadership in Energy and Environmental Design) or GRIHA (Green Rating for Integrated Habitat Assessment), are increasingly sought after. For example, The Welcomhotel by ITC Hotels on Cathedral Road in Chennai has achieved a Platinum Rating under the Leadership in Energy and Environmental Design (LEED) certification for the Existing Building: Operations & Maintenance category from the U.S. Green Building Council. This recognition highlights the hotel’s commitment to sustainability through its use of low VOC paints and sealants, which help minimize toxic emissions.

Manufacturers are also turning to recycled or sustainably sourced raw materials, which help lower the environmental footprint of their products. In May 2024, Gyproc India announced the production of low-carbon plasters at its Tiruvallur facility, achieving a significant 40-50 percent reduction in carbon footprint compared to previous Gyproc plasters, marking a milestone in sustainable construction.

There is also a move towards bio-based construction chemicals made from renewable resources, such as plant-based polymers and natural fibers. In 2023, a team from IIT Guwahati developed a 3D-printed security post using a special M40 grade sustainable concrete that incorporates industrial wastes, fibers, and chemical admixtures to enhance its properties.

Sustainable construction chemicals are designed for greater durability and longevity, reducing the need for frequent maintenance and replacements, which supports overall sustainability. In 2024, Nuvoco Vistas Corp. Ltd., launched Concreto Uno - Hydrophobic Concrete. This innovative concrete, featuring a unique blend of admixtures and a specialized mix design, reduces permeability and enhances strength and durability, extending the lifespan of structures. Products that improve thermal insulation, like energy-efficient coatings and sealants, are becoming more popular for their role in reducing energy consumption in buildings. Reflective and cool coatings that lower heat absorption is also gaining traction. Offering sustainable construction chemicals allows companies to stand out in the market by appealing to environmentally conscious consumers and differentiating themselves from competitors. The growing emphasis on sustainable solutions in the construction chemicals market signifies a broader shift towards environmentally responsible practices.

Segmental Insights

Product Type Insights

Based on Product type, the Concrete Admixtures emerged as the dominating segment in the Indian market for Construction Chemicals in 2024. Concrete admixtures significantly improve the properties of concrete, including its workability, setting time, and strength. They enable customization of concrete mixes to meet specific environmental conditions or performance requirements, such as enhancing durability, weather resistance, or speeding up curing times. The increasing demand for concrete admixtures is driven by the growth in residential, commercial, and infrastructure construction projects, including roads, bridges, and high-rise buildings. Admixtures help lower material costs by reducing the amount of cement needed and can decrease long-term maintenance and repair expenses by enhancing concrete's strength and durability.

In 2023, Nippon Paints announced its strategic entry into the construction chemicals market. The company plans to introduce products across various categories, including dry mix, repair and maintenance, construction chemicals, and waterproofing. Their offerings will focus on three main areas which include concrete admixtures and membranes for use during construction, concrete repair and waterproofing for new buildings, and repair and maintenance solutions such as protective coatings, sealants, and adhesives. Concrete admixtures are essential across a broad range of applications, from residential projects to specialized high-performance structures, making them a fundamental component in the construction industry.

End Use Insights

Based on End Use, Commercial & Industrial emerged as the dominating segment in the Indian market for Construction Chemicals in 2024. Commercial and industrial projects involve larger-scale structures and greater quantities of construction materials, resulting in a higher demand for construction chemicals. Office buildings, factories, and major infrastructure projects, such as roads, bridges, and airports, require substantial amounts of concrete admixtures, waterproofing agents, and protective coatings. These chemicals are essential for enhancing the durability and longevity of materials to withstand intensive use and challenging environmental conditions.

With the Interim Budget 2024-25 increasing capital investment for infrastructure by 11.1% to USD 133.86 billion (3.4% of GDP), the focus on major infrastructure projects underscores the need for high-quality construction chemicals that ensure long-term performance and maintenance. These projects often have complex requirements that demand advanced solutions, such as high-performance concrete admixtures for heavy-load support or extreme weather resistance. Commercial and industrial projects typically have larger budgets compared to residential projects, enabling the investment in specialized construction chemicals. Frequent renovations and upgrades of commercial and industrial facilities further drive the need for repair and maintenance chemicals to ensure ongoing performance and safety.

Regional Insights

Based on Region, North India emerged as the dominant region in the Indian market for Construction Chemicals in 2024. North India, home to major urban centers like Delhi NCR, sees a high volume of residential, commercial, and infrastructure projects. Rapid urbanization and expansion in these areas drive significant demand for construction chemicals. The region is marked by substantial infrastructure projects, such as highways, metro systems, and major commercial developments, which increases the need for a variety of construction chemicals. Numerous government initiatives and investments in infrastructure development support projects like new metro lines, expressways, and smart city initiatives, all of which require diverse construction chemicals. North India's higher budget allocations for infrastructure contribute to increased spending on these chemicals. Additionally, the region’s rapid economic growth and significant commercial investments further drive the need for construction chemicals in office buildings, shopping malls, and other commercial spaces. In 2023, Xypex Chemical Corporation, a Vancouver-based company known for its crystalline concrete waterproofing solutions, announced a significant expansion in the Asian market with the launch of a new production facility in Greater Noida, Uttar Pradesh. The ongoing urbanization and population growth in North Indian cities generate strong demand for new residential construction and related construction chemicals. Efforts to develop smart cities in the region also heighten the need for advanced construction chemicals that support innovative and sustainable building practices. The prevalence of large-scale projects, including new transportation networks and extensive residential complexes, amplifies the demand for construction chemicals.

Key Market Players

Sika India Pvt. Ltd.
Pidilite Industries Ltd.
MAPEI Construction Products India Pvt. Ltd.
Tremco CPG (India) Private Limited
Polygon Chemicals Private Limited
Ruia Chemicals Pvt. Ltd.
Chembond Chemicals Limited
Cera-Chem Private Limited
Choksey Chemicals Pvt. Ltd.
CICO Group

Report Scope:

In this report, the India Construction Chemicals Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

India Construction Chemicals Market, By Product Type:

Concrete Admixtures
Waterproof Chemicals
Flooring Resins
Protective Coatings
Adhesives
Sealants
Others

India Construction Chemicals Market, By End Use:

Commercial & Industrial
Residential