The Asia-Pacific gypsum board market is estimated to witness a healthy growth, at an estimated CAGR of over 6.5%, over the forecast period. The major factor driving the market studied is the increasing investment in the construction sector in the emerging economies of Asia-Pacific. Gypsum board inability to perform in water and the impact of COVID-19 pandemic are expected to hinder the growth of the market studied.
- The demand from the residential sector dominated and is expected to grow at a rapid rate, owing to the new residential construction and repair activities in the developing economies.
- Increasing investment in the construction sector is likely to act as an opportunity in the future.
- Based on type, wall board occupied the largest share. However, the demand for pre-decorated boards is growing at a rapid pace, owing to the increase in the demand from the residential sector.
Key Market Trends
Increasing Investments in the Construction Sector in the Emerging Economies
- Gypsum boards are used in the construction (walls, ceilings, partitions, etc.) of warehouses, manufacturing facilities, operational buildings, etc. Multi-layer systems are majorly used in the industrial sector, as they have two or more layers of gypsum board and meet higher sound and fire-resistance requirements to enhance the comfort and safety beyond minimum code requirements.
- The Indian construction sector is growing at a tremendous rate (approximately 7%-8%), with urbanization projects and new construction activities, such as bridges, dams, roads, railways (metro rails), urban infrastructures, buildings, and others.
- The 100% FDI in the construction sector has also supported the industry growth, and the government initiative ‘Housing for All by 2022’ is supporting the new construction activities in the country.
- In addition, the country is likely to witness an investment of around USD 1.3 trillion in housing, over the next seven years, during which, the country is likely to witness the construction of 60 million new homes. The availability of affordable housing is expected to rise by around 70% by 2024 in India.
- All the aforementioned factors are likely to contribute positively to the demand for gypsum board in the region.
China to Dominate the Market
- In the Asia-Pacific region, China has the largest economy, in terms of GDP. The economic growth in the country remains high, owing to the increasing interest of the investors to invest in China.
- It is the fastest-growing economies, globally, and almost all the end-user industries have been developing, owing to the rising population, living standards, and per capita income. However, owing to the international trade turbulences and unfavorable geopolitical affairs, the growth rate is expected to slow down in the initial years of the forecast period. However, the growth is expected to gain pace in the later part of the forecast period, considering the favorable conditions and relations in the future.
- The reforms announced by the Chinese government are aimed to support foreign investments in the country, enhance the supervision and regulation of market conduct, deepen financial system reforms, and improve the management of cross-border investment flows, in order to encourage two-way cash flow and connectivity of capital.
- The country has spent about USD 106 billion in 2018 on railway projects, to continue building the leading rail system in the world. In 2018, the country added a total of 4,100 kilometers (2,548 miles) of new high-speed railways. By 2020, network for high-speed railways is expected to reach 30,000 kilometers, and by 2025, it is expected to further reach 38,000 kilometers.
- Moreover, restrictions on foreign investment on land development, high-end hotels, office buildings, international exhibition centers, and construction and operation of large theme parks have also been lifted. The growth in infrastructure is expected to boost the gypsum board market in the country, over the forecast period.
The Asia-Pacific gypsum board market is consolidated, with the top five players accounting for more than 70% in the market. The major companies include USG BORAL, China National Building Material Company Limited (CNBM), Saint-Gobain Gyproc, KCC CORPORATION, and Knauf Gips KG, among others.
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