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). A composite building material made primarily of fiber-reinforced cement is called fiber cement. The demand for the product is anticipated to be driven by the growing need to reduce overall carbon emissions from the building and construction sectors. In addition, factors such as rapid urbanization and industrialization in developing countries, booming construction industry, high efficiency of fiber cement products, and ban on asbestos cement products drive the market growth. In addition, an increase in investment in the infrastructure sector offers opportunities to the market players.
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Rising Residential Construction across the World
Fiber cement products are applied internally and externally in the residential sector. They are used for internal claddings like tile backer boards, partition walls, windowsills, ceilings, and floors. They are used for external claddings, including slates, planks, corrugated sheets, soffits, wall copings, and flat windshields. In the form of slates and corrugated sheets, they are also used for roofing.
Residential construction in regions such as North America, Asia-Pacific, and Europe has witnessed steady growth in recent times. The Asia-Pacific area has the most significant construction industry in the world. It is expanding at a healthy rate due to urbanization, rising middle-class incomes, and population growth. Significant residential and commercial construction developments support a significant portion of China's economic growth. Hong Kong's housing authority initiated several initiatives in China to jump-start affordable housing development. By 2030, the authorities hope to have 301,000 public housing units available.
In addition, India is anticipated to receive roughly USD 1.3 trillion in housing investments during the following seven years, and 60 million new dwellings are anticipated to be built. In 2024, the country's rate of affordable housing availability is projected to increase by almost 70%. Another significant game-changer for the business is the Indian government's "Housing for All by 2022" initiative. By the end of 2022, this plan hopes to construct more than 20 million affordable dwellings for poor urban people. Housing buildings will receive a significant boost as a result. Throughout the projection period, the demand for fiber cement is projected to be driven by all of these growth indicators in the residential construction sectors.
Advantages offered by Fiber Cement
While constructing homes, construction companies are opting for more sustainable methods. Fiber cement is a sustainable option and will give the best results. They offer a sustainable option because of the following advantages:
Such advantages offered by fiber cement are expected to drive the demand for the market studied during the forecast period.
Presence of Alternatives
Wood, metal, and vinyl are alternatives to fiber cement products. Wood is a longstanding alternative to fiber cement. Wood siding is a popular choice for cabins, lodges, and homes in the suburbs owing to its versatility. A variety of design possibilities are present when using wood. Metal is another alternative to fiber cement siding. Metal offers more stability and protection compared to wood. Metal has better flame retarding properties than wood and does not form molds, or have rotting risks, like wood. Metal sidings can come in a variety of styles and designs as per the interests of homeowners. Vinyl is another option for homeowners; it is easy to find and install. It comes at affordable prices, and homeowners looking for affordable exterior options prefer vinyl. However, vinyl is relatively weak and may not withstand strong winds or harsh weather conditions. The availability of alternatives, such as wood, vinyl, and metal, is expected to restrain the market studied in the coming years.
The Shift from Low-end Plywood Segment with Fiber Cement in India
Compared to plywood products, fiber cement products are cheaper by nearly 40%, are more durable, and offer a life span of 15 to 20 years compared to plywood products' 5 to 10 years. Fiber cement products are resistant to weathering, environmentally friendly, resistant to fire, termite, and water, and offer pleasing aesthetics. At the same time, plywood products do not offer similar protective resistance and require other materials for aesthetics.
In India, the fiber cement roofing market was valued at approximately INR 12,000 crores and has opportunities from kutcha and semi-pucca houses. The fiber cement roofing market is an oligopoly, with the top-six players controlling 70% of capacity and 80% of the sales market in India. The fiber cement consumption per capita is low at 0.2 kg per person in India. Plywood is the most effective product among wood panels, and the market is highly fragmented, with more than 75 % controlled by the unorganized sector. CenturyPly and GreenPly Industries dominate the share in the organized market. Factors such as government initiatives of Housing for all, rural development, need for faster and affordable construction provide opportunities for the fiber cement market in India.
Such factors of fiber cement penetrating the timber frame segment in Europe and replacing the low-end plywood segment with fiber cement in India are expected to act as opportunities for the market studied.
The global fiber cement market is bifurcated by application, end-user industry, and region.
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. Siding products are used for various modern, classic, beauty on a budget, finishing touches, and multifamily homes. They are used for houses or buildings in humid climates, as they can withstand high humidity without rotting as wood products. Due to their fire-resistant property, they are used for homes or buildings in dry climates. They are also used for buildings or houses along coastal areas to protect from sun exposure, salt spray, and high humidity. Owing to the abovementioned properties and applications, the demand for fiber cement siding will likely increase during the forecast period.
By end-user industry, the global fiber cement market is segmented into global fiber cement market is bifurcated 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. Fiber cement products are used for various residential applications, such as siding, molding and trimming, roofing, cladding, and other applications. The residential industry is the primary end-user industry for fiber cement. Fiber cement products are widely used in the residential industry due to their various advantages, such as wear and tear resistance to concrete, UV resistance, fire resistance, pest and algae resistance, corrosion-free, and aesthetically appealing. Fiber cement is not only versatile and attractive, but it also has excellent protective qualities. As a result, it may be used in various conditions around the country. Fiber cement siding or cladding houses can withstand harsh weather and help keep the house sustainable to some of the harshest elements of the local environment. Therefore, owing to the above factors, the demand for fiber cement from the residential industry will likely increase during the forecast period.
By region, the global fiber cement market is segmented into Asia-Pacific, Europe, North America, South America, and MEA.
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Asia-Pacific accounted for the largest market share and is estimated to grow at a CAGR of 5.2% during the forecast period. China's economy is expanding and has been helped by numerous residential and commercial construction developments. Hong Kong's housing authority initiated several initiatives in China to jump-start affordable housing development. By 2030, the authorities hope to have 301,000 public housing units available. The country's demand for residential construction is anticipated to be driven by rising household income levels, population shifts from rural to urban areas, and other factors. The residential construction industry's growth is driven by the public and private sectors' increased focus on affordable housing. Infrastructure that is not residential is anticipated to expand significantly. The aging population of the nation is driving the need for new hospitals and healthcare facilities.
Huge commercial and office buildings have been built due to the structural changes in the Chinese economy over the past few years, which have seen the service sector account for a more significant portion of the GDP overall. The need for more living space in urban areas as a result of urbanization and middle-class urban dwellers' desire to improve their living conditions may have a significant impact on the housing market and, as a result, increase residential construction throughout the nation. This will positively impact the market for fiber cement products in the nation.
North America is the second largest region. It s projected to grow at an estimated CAGR of 3.5%. The United States has one of the world’s largest construction industries, and it was valued at USD 1,469.15 billion in 2020, which was USD 1,391.04 billion in 2019. According to the US Census Bureau, the annual value of residential construction put in place in the United States was valued at USD 6,38,088 million in 2020, registering a growth rate of about 13% compared to USD 5,53,442 million in 2019. Moreover, the annual non-residential construction in the country was valued at USD 8,31,065 million in 2020, compared to USD 8,37,597 million in 2019. The US Census Bureau estimates that in November 2021, construction spending in the nation increased by 0.4% over the revised October estimate of USD 1,618.8 billion to reach an estimated seasonally adjusted annual rate of USD 1,625.9 billion.
The November 2021 estimate is 9.3% higher than the USD 1,487.2 billion November 2020 estimate. Additionally, from January to November 2021, construction spending reached USD 1,463.2 billion, an increase of 7.9% over USD 1,355.6 billion for the same period in 2020. This resulted in a rise in the consumption of fiber cement for use in various construction applications. According to the US Census Bureau, the new single-family houses sold with primary exterior wall material of fiber cement accounted for 180 thousand units in 2020, compared to 139 thousand units in 2019, thereby increasing the demand for the market studied.
Europe is the third largest region. The German government has initiated the construction of the Digital Park Fechenheim on a 10.7 ha area, with a gross floor area of 100,000 m2 in Frankfurt-Fechenheim, Hesse, Germany, with an investment of USD 1,179 million. The work started in Q3 2021 and is expected to be completed by Q4 2028. In the third quarter of 2021, the country started constructing the Central Hospital in Lörrach, Baden-Wuerttemberg, with an investment of USD 418 million; it is expected to be completed by 2025. The project aims to build a center for mental health and a medical department store with a parking garage.
According to the European Commission, as of June 2020, the total investment for the project “Concrete Green - Novel production of fiber cement using renewable energy, majorly, by German companies” was EUR 1,538,900, with the EU’s European Regional Development Fund contributing EUR 461,670 through the “OP Hessen EFRE 2014-2020” Operational Programme for the 2014-2020 programming period. Such investments are likely to drive the fiber cement market’s growth. Due to the abovementioned factors, the German fiber cement market is expected to exhibit significant growth over the projected period.
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.