INSIGHT: Survey sees energy in chemicals markets and M&A activity

11 December 2013 16:42  [Source: ICIS news]

By Nigel Davis

LONDON (ICIS)--Chemical, materials and food industry executives think that buildings, construction and flexible packaging markets are the ones to watch in 2014, according to just released survey results.

“Materials and chemicals that support and promote clean and sustainable energy technologies and energy efficiency are on the top of the agenda of stakeholders across the value chain,” say consultants Frost & Sullivan.

The drive for net zero energy and ‘green’ buildings will lift demand for insulation systems and materials, they suggest, with “massive” growth in emerging markets enhanced by evolving building standards in the US and renovations in Europe.

Increased urbanisation will buoy the construction market generally, with the survey results also suggesting that changing consumer lifestyles will attract more interest in new packaging technologies, particularly for the food and beverage industries, but also in other consumer markets and in medical and pharmaceutical applications.

Frost & Sullivan polled 1,835 executives in more than 40 countries and its survey results pick up the nuances of market segmentation and growth as well as the broad brush trends.

In 2013, chemicals markets have been dominated by the influence of shale gas on energy costs and production economics. Food-related markets including processing, packaging logistics and antimicrobial additives are the key growth drivers for that industry, the consultants say.

Materials and chemicals that support sustainable development are “top of the agenda of stakeholders across the value chain,” they add.

A lot of the action has been in the BRIC group of nations but Turkey and countries in southeast Asia such as Vietnam, Indonesia and Malaysia are becoming production and consumption hot spots.

In most markets, producing companies find that they are having to get closer to the customer and having to better understand how their products are used. Market segmentation can be effective and work in their favour.

The main consuming industries in 2013 for the products of the three sectors surveyed are construction & utilities, transportation, food and beverages, personal protective equipment and food, drugs and cosmetics.  

“The food, mobility and construction markets were fast growing in the core of developments in 2012, exhibiting growth overall and driven by the emerging economies. The pattern in 2013 is not so different from last year,” Frost & Sullivan says.

It is noteworthy that chemical, materials and food industry executives showed the greatest interest in mega-trends among a wider spread of industry sectors including aerospace, power, transport and healthcare. They have their fingers on the pulse of what might drive future growth, perhaps.

They are on the look-out for new business models, new, beyond-BRIC market opportunities, and green solutions.

The search for green technology routes to key chemical intermediates has been in the news this week and tops the important industry trends for 2013 identified by Frost & Sullivan. Demand for lightweight materials in transportation also comes high on the consultants list.

The company also suggests that chemical industry consolidation will continue and predicts more mega-acquisitions.

Eight companies from the global top 120 headquartered in the US and Europe are potential targets, it says.

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By: Nigel Davis
+44 20 8652 3214

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