Total Addressable Market (TAM) for Fiber Cement Ascends at a Noteworthy CAGR of 4.1%

Introduction

Fiber cement is a composite building material composed primarily of fiber-reinforced cement. The increasing need to reduce carbon emissions from the building and construction industry is anticipated to drive product demand. In addition, factors such as rapid urbanization and industrialization in developing countries, a booming construction industry, the high efficiency of fiber cement products, and the ban on asbestos cement products contribute to the market's expansion. In addition, the rise in infrastructure investment presents market participants with opportunities.

Market Dynamics

Rising Residential Construction across the World to Drive the Global Fiber Cement Market

The residential construction industry uses fiber cement for external and internal applications. Internal claddings, such as partition walls, window sills, ceilings and floors, and tile backer boards, utilize these materials. They are used for external claddings, such as flat sheets as the base, flat sheets for windshields, wall copings, soffits, corrugated sheets, slates, and planks. They are also used as slates and corrugated sheets for roofing.

In recent years, residential construction in regions such as North America, Asia-Pacific, and Europe has increased consistently. The construction industry in the Asia-Pacific region is the largest in the world. It is expanding at a healthy rate due to the region's increasing population, rising middle-class income, and urbanization. Numerous residential and commercial construction sector developments primarily drive China's burgeoning economy. Hong Kong's housing authorities initiated several measures to expedite the construction of affordable housing in China. Officials intend to provide 301,000 units of public housing by 2030.

Moreover, over the next seven years, India will likely see an investment of approximately USD 1.3 trillion in housing, during which 60 million new homes will be constructed. In 2024, the availability of affordable housing is projected to increase by approximately 70 percent. The 'Housing for All by 2022' initiative of the Indian government is also a game-changer for the industry. This initiative aims to construct more than 20 million affordable housing units for the urban poor by 2022's end. This will significantly increase housing construction. During the forecast period, the demand for fiber cement is anticipated to be driven by all these residential construction sector growth indicators.

Replacement of Low-end Plywood Segment with Fiber Cement in India to Provide Opportunities for the Global Fiber Cement Market

Fiber cement products are nearly 40% less expensive than plywood products, are more durable, and have a lifespan of 15 to 20 years compared to 5 to 10 years for plywood products. Fiber cement products are resistant to weathering, eco-friendly, fire-, termite-water-resistant, and aesthetically pleasing. In contrast, plywood products do not offer the same level of protection and require other materials for aesthetics.

India's fiber cement roofing market is valued at approximately 12,000 billion rupees, and kutcha and semi-pucca houses present opportunities. India's fiber cement roofing market is an oligopoly, with the top six players controlling 70% of capacity and 80% of the sales market. In India, fiber cement consumption per capita is low at 0.2 kg per person. Plywood is the essential product among wood panels, and its market is highly fragmented, with the unorganized sector controlling over 75 percent. CenturyPly and GreenPly Industries control the majority of the organized market share. Housing for all government initiatives, rural development, and the need for faster and more affordable construction creates opportunities for the fiber cement market in India. The penetration of fiber cement into the timber frame segment in Europe and its replacement of the low-end plywood segment in India is expected to create opportunities for the studied market.

Regional Analysis

By region, the global fiber cement market is segmented into Asia-Pacific, Europe, North America, South America, and MEA. 

Asia-Pacific dominated the market share and is estimated to grow at a CAGR of 5.2% during the forecast period. The numerous residential and commercial construction developments have primarily propelled China's burgeoning economy. Hong Kong's housing authorities initiated several efforts to expedite the construction of affordable housing in China. Officials intend to provide 301,000 units of public housing by 2030. Rising household income levels and rural-to-urban migration are expected to continue driving demand for residential construction in the country. The public and private sectors' increased emphasis on affordable housing is driving the expansion of the residential construction industry. It is anticipated that non-residential infrastructure will expand significantly. The country's aging population generates demand for the construction of new healthcare facilities and hospitals. The recent structural changes in the Chinese economy, in which the service sector has assumed a more significant share of the total GDP, have led to the construction of enormous commercial and office spaces. The need for more living space in urban areas as a result of urbanization and the desire of middle-class urban residents to improve their living conditions may have a significant impact on the housing market, leading to an increase in residential construction in the country, which will have a positive impact on the domestic market for fiber cement products.

North America is the second largest region. It is projected to grow at an estimated CAGR of 3.5%. The United States has one of the largest construction industries in the world, with a 2020 value of USD 1,469.15 billion, up from USD 1,394.04 billion in 2019. According to the US Census Bureau, the annual value of residential construction in the United States was USD 6,38,088 million in 2020, a 13% increase from USD 5,53,443 million in 2019. In addition, the annual value of construction of non-residential structures in the country increased to USD 8.31 billion in 2020 from USD 8.37 billion in 2019. In November 2021, the US Census Bureau estimated construction spending at a seasonally adjusted annual rate of USD 1,625.9 billion, an increase of 0.4% over the revised October estimate of USD 1,618.8 billion. Moreover, the estimate for November 2021 is 9.3% greater than the estimate for November 2020, which is USD 1,487.2 billion. In addition, from January to November of 2021, construction expenditures will total USD 1,463.2 billion, which is 7.9% higher than USD 1,355.6 billion for the same period in 2020, increasing the demand for fiber cement in various construction applications. According to the US Census Bureau, the number of new single-family homes sold with fiber cement as the primary exterior wall material increased from 139 thousand units in 2019 to 180 thousand units in 2020, increasing the market's demand. 

Europe is the third largest region. The German government has initiated the construction of the Digital Park Fechenheim in Frankfurt-Fechenheim, Hesse, Germany, on a 10.7-hectare site with a gross floor area of 100,000 square meters, at the cost of USD 1,179 million. The work commenced in the third quarter of 2021 and is anticipated to be completed in the fourth quarter of 2028. It is anticipated that construction of the Central Hospital in Lorrach, Baden-Wuerttemberg, will commence in the third quarter of 2021 and be completed in the second quarter of 2025. The project intends to construct a mental health center and a medical department store with an attached parking garage. According to the European Commission, the total investment for the project "Concrete Green - Novel production of fiber cement using renewable energy, predominantly by German companies" as of June 2020 was EUR 1,538,900, with the EU's European Regional Development Fund contributing EUR 461 670 via the "OP Hessen EFRE 2014-2020" Operational Programme for the 2014-2020 programming period. Such investments are likely to drive the growth of the fiber cement market. Due to the factors mentioned above, it is anticipated that the German fiber cement market will experience significant growth over the forecast period.

Key Highlights

• The Total Addressable Market (TAM) for Fiber Cement is worth USD 16.55 billion in 2022 and is projected to reach an estimated value of USD 23.76 billion by 2031, at a CAGR of 4.1% during the forecast period (2023 – 2031)

• By application, the global fiber cement market is segmented into siding, roofing, cladding, molding and trimming, and other applications. The siding segment accounted for the largest market share and is estimated to grow at a CAGR of 4.6%during the forecast period. 

• By end-user industry, the global fiber cement market is segmented into global fiber cement market is divided into residential and non-residential. The residential segment accounted for the largest market share and is estimated to grow at a CAGR of 4.1% during the forecast period. 

Competitive Players

Competitive Landscape

Key players in the global fiber cement market are American Fiber Cement Corporation, Cembrit Holding A/S, CenturyPly, CSR Limited, Elementia Materials, Etex Group, Everest Industries Limited, James Hardie Industries PLC, NICHIHA Co. Ltd, Saint-Gobain, SCG, Toray Industries Inc., TPI Polene Public Company Limited.

Recent Developments

Market News

• June 2022 - American Fiber Cement Corporation introduces Deco, a brand‐new façade panel with a rustic coated surface. This panel meets the rising demand of architects and builders worldwide who want to create a smooth polished look with a natural texture.
• June 2022 - Swisspearl Group of Niederurnen, Switzerland, is acquiring Cembrit of Denmark retroactively as of January 1, 2022, thereby becoming Europe's second-largest fiber cement manufacturer. Swisspearl Group is owned by the entrepreneurial Swiss family Bernhard Alpstaeg and employs approximately 2600 people.

Segmentation

Global Fiber Cement Market: Segmentation

By Application

• Siding
• Roofing
• Cladding
• Molding and Trimming
• Other Applications

End-User Industry

• Residential
• Non-residential

By Region

• Asia-Pacific
• Europe
• North America
• South America
• MEA