Rheological additives are used to control and manage the characteristics and properties of the liquids. In the absence of rheological additives, the fluid behaves as runny water, causing inconvenience during the application of the fluids. They also help in enhancing the stability, suspensibility, and performance of the liquid. Rheological additives are used extensively in construction, cosmetics, and pharmaceutical, among other industries. Increasing application of rheological additives in paints, coatings, adhesives, and sealants are likely to create upswings for market growth.
Construction is expected to be one of the most dynamic sectors in the coming years, playing a crucial role in the prosperity of society globally. As per the data available by Oxford Economics, the global construction sector is foreseen to grow by USD 8 trillion, and this growth is expected to be driven by the U.S, China, and India.
China's Belt and Road Initiative (BRI) development strategy intends to build connectivity and co-operation throughout six key economic corridors consisting China, Mongolia, Russia, Eurasian countries, and Central and West Asia, among others. Chinas overall objective of Belt and Road initiative (BRI) is overwhelming, with around 60 countries have signed on the project. As per the Council of Foreign Relations, it is estimated that by 2027, the total investment for the Belt and Road Initiative (BRI) is expected to reach a value of USD 1.3 trillion. All these factors are high growth drivers for the construction materials, further creating a fillip for the rheological additives market growth.
The government of India is undertaking a smart city mission that aims to foster sustainable construction and development of cities. The Bharatmala Pariyojana program, an Indian government-sponsored road and highway project, aims to construct about 50 new national corridors, connecting 550 districts.
Phase 1 of the project consists of constructing 34,800 km of roads and highways by the year 2021, followed by Phase 2 of the project, which includes port and coastal connectivity. The growing demand for construction projects in Asia-Pacific will create massive demand for paints, coatings, additives, sealants, and other construction material that uses rheological additives to enhance the properties of the fluids.
Globally, there are many upcoming construction projects that will require a large number of construction materials. Some of the most significant construction projects include Al Maktoum International Airport, Dubai, with an estimated cost of USD 32 billion, spread over 21 square miles. London's Crossrail Project, with an estimated cost of USD 23 billion, is another large scale high-speed railway project, further driving the market growth.
The organic rheological additive is much more diverse than inorganic rheological additives. Few of the organic rheological modifiers include cellulose, castor oil derivatives, hydrophobic ethoxylated urethane resins, alkali-acrylic emulsions, and calcium sulfonates. Organic rheological additives offer more advantages compared to non-organic rheological additives, such as strong shear thinning, high film build, and sag resistance.
Organic rheological is finding higher applications owing to the naturally derived nature of the product. It is used in a wide array of products, such as paints, coatings, creams, lotions, and inks, to control the fluid properties and avoid splatter of the liquid and increase shelf life. Its increasing demand in the pharmaceutical and cosmetics industries is projected to create fillip for market growth.
North America has been a pioneer in the field of technological development. Today, the region is one of the key manufacturers and consumers of rheological additives. As per the International Monetary Fund World Economic, North America ranks first in the world in terms of nominal GDP and second in terms of purchasing power in 2018. Its nominal GDP accounted for USD 19.39 trillion in 2017 and is expected to touch USD 24.53 trillion by 2023.
The automobile industry in the U.S. is one of the biggest in the world; as per The International Trade Administration (ITA), the U.S. Department of Commerce, the total sales of light vehicles was around 17 million units. Furthermore, the total foreign direct investment in the automotive sector reached USD 115 billion in 2018.
The increasing number of vehicles is likely to create demand for rheological additives in the region that are used to control and enhance the properties of paints, prevent splatter during painting, give a glossy and premium finish, and help achieve a balance between durability and consistency of the paint.
The construction sector in the U.S. has been witnessing tremendous growth in the last few years. The U.S. spends around USD 1,293 billion on construction activities every year. As per data by the Associated General Contractors of America (AGC), the U.S. construction industry employs approximately 7 million people and creates nearly USD 1.35 trillion worth of projects every year. For instance, the LaGuardia airport construction, an ongoing project in Queens, New York, is estimated to cost USD 8 billion and be completed in 2022.
Over the last few years, North America witnessed economic volatility due to stringent trade policies of the U.S. on the import of Chinese goods, which has adversely affected the regional growth on a macro-economic level. This is increasing the foreign direct investment in Mexico and improving the economic scheme of the country. Mexico's efforts to scale up its manufacturing capacity during this trade war have reaped substantial dividends for the country. All these factors highlight the growth potential of the rheological additives market in the region during the forecast period. However, the trade war with China and the recent outbreak of Coronavirus will adversely impact the rheological additives market in the coming future.
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