| 11 Mar 2010 |
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Construction chemicals market to grow
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Overall construction chemicals market for the GCC in 2008 was estimated to be $770 million (Dh2.8 billion).
This is expected to grow at a CAGR of 4.2 per cent from 2009 to 2015 and is projected to reach $1.2bn in 2015, according to a Frost and Sullivan report entitled 'Strategic Opportunity Assessment of GCC Market for Construction Chemicals'.
The GCC construction chemicals market has been segmented by three geographical regions: Saudi Arabia, the UAE and the rest of the GCC, which includes Bahrain, Kuwait, Oman, and Qatar. Within the GCC, the UAE was the largest individual market for construction chemicals with market size of $340m in 2008.
Saudi Arabia was the second-largest bloc with market value of $200m.
The rest of the GCC as a bloc constituted $230m.
However, the global financial crisis has affected the regional construction industry and in turn impacted the pace of growth in the construction chemicals industry,
The UAE is expected to feel the impact the most, said the report.
"However, with a large pool of petroleum dollars and strong government support, funding for infrastructure projects and housing projects in low and middle income groups is expected to remain stable and drive the construction industry in the near future," it added.
"The future of GCC construction chemicals market hinges on two key areas - product and application innovation and value engineering," said Rahul Khare, Senior Consulting, Frost & Sullivan. "These factors will expand the market by surmounting existing construction engineering impediments and helping to bring down construction costs by shortening project time and reducing rework.
"Increasing price sensitivity and fragmentation of the market structure has hurt profitability, thwarting market growth.
All the product categories are expected to witness growth over the forecast period due to the construction projects being undertaken and lined up in the region.
The split between product categories is likely to remain almost the same for the forecast period, said the report.
Saudi Arabia is expected to witness a faster growth from 2009 to 2015 than the rest of the GCC because of its relatively newer construction industry and infrastructure projects, said the report.
By Sona Nambiar
© Emirates Business 24/7 2010
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