The market for Wood Coatings in Middle-East and Africa is expected to grow at a CAGR of over 2% during the forecast period. Major factors driving the market studied are increasing applications in furniture and growing construction industry in the middle eastern region. On the flipside, stringent environmental regulations and unfavourable conditions arising due to COVID-19 outbreak, are the major restraints, which are expected to hinder the growth of market.
- Increasing demand for UV-cured coatings and shift toward water-borne coatings, are expected to offer various lucrative opportunities for the growth of market.
- By application, furniture and fixtures segment is expected to account for the largest share.
- By Country, Saudi Arabia is expected to dominate the market during the forecast period.
Key Market Trends
Growing Demand from the Furniture & Fixtures Segment
- Wood coatings, due to their excellent adhesion, anti-corrosive properties, increased durability on woods, and esthetic properties, are becoming an integral part of various commercial sectors.
- Wood coatings are mainly used in furniture and fixtures. These coatings help in protecting the furniture and cabinets from termites and fungal infection. Additionally, they also protect them from moisture and mold formation. These coatings are UV-curable and powder technology-based. They enhance the appearance of furniture and also extend their lifetime.
- The demand for furniture is increasing owing to the increasing level of income of middle-class people, in turn, propelling the demand for wood coatings for home furniture products, in recent times. The furniture and fixture application segment accounted for more than 50% of the wood coatings market in 2019, and it is expected to increase its revenue share during the forecast period.
- Furthermore, increasing office space usage in countries, like the United Arab Emirates and Saudi Arabia, is also propelling the demand for furniture, which further increases the application of the market studied.
- Vision 2030 and the emphasis on diversification from oil-reliance have led Saudi Arabia to plan and invest in billions on hospitality, commercial, and other construction projects that demand the full range of interior and fit-out products. The country is considered as a home to the Middle East’s construction market, with an interior market value of more than USD 3.5 billion. Major construction projects in Saudi Arabia include the King Abdullah Security Compounds (Phase 5), and the Grand Mosque (Holy Haram Mosque expansion), among few others.
- Moreover in 2019, a total of USD 73.1 billion worth of projects were completed in the United Arab Emirates, which increased by almost 9% from the last year. With many Dubai Expo-related projects nearing completion, other sectors, such as infrastructure and utility projects, are expected to remain strong activity for the growing construction sector in UAE.
- However, the construction industry has been heavily impacted in the Middle East due to the COVID-19 pandemic. The major source of economic stabilization in Middle East countries is oil production and export. A major downfall in oil demand has been reported across the world, due to which many oil productions sites have been shut down or decrease production in the region. This has decreased the economy in the Middle Eastern countries and is expected to continue a few years.
- Hence, the aforementioned trends are expected to affect the demand for wood coatings in the market studied.
Saudi Arabia to Dominate the Market
- Saudi Arabia is an oil-based economy with strong governmental control over all the major economic activities. The country has more than 15% of global oil reserves and is one of the leading oil exporters, globally. The continuous decline in oil prices has affected the growth and restricted the government from formulating long-term fiscal recovery plans. Due to all these factors, the Saudi government is focusing on the diversification of the economy, to reduce dependency on the oil market.
- The government has embarked on an array of industrial, social, and entertainment projects under its ‘Vision 2030’ initiative to diversify the economy away from its decades-long reliance on the petrochemical industry.
- The country is embarking a large number of residential and commercial projects expected to increase the country's construction activities. Some of such projects undertaken or in various phase of development includes - USD 500 billion futuristic mega-city ‘Neom’ project, The Red Sea Project - Phase 1, which is due to be completed on 2022 and includes 14 luxury and hyper-luxury hotels that will comprise 3,000 rooms, all across five islands and two inland resorts, Qiddiya Entertainment City, Amaala - the uber-luxury wellness tourism destination, Jean Nouvel’s Sharaan resort in Al-Ula, Ministry of Housing’s Sakani homes, and Jeddah Tower.
- Besides, the county has been developing new airports and reconstructing old ones, which may add to the demand for wood coatings in furniture used for airport interiors. For instance, in February 2019, the General Authority of Civil Aviation (GACA) under Saudi Arabia’s trillion-riyal National Industrial Development and Logistics Program (NIDLP) decided to upgrade existing airports while establishing new ones.
- Apart from it, the ongoing work is executed on two state-of-the-art airports at Al Jouf and Al Qurayat areas within the northern region of the Kingdom. The Kingdom is further working on a project to develop King Abdullah International Airport Jizan.
- However, the production from almost all of the non-oil sectors such as wooden furniture production has weakened in the country in early 2020 due to the COVID-19 outbreak, and no rapid growth is expected to be witnessed in residential construction before the end of 2020. This is likely to impact the market for wood coatings in Saudi Arabia during 2020.
- Hence, the above-mentioned factors are expected to affect the wood coatings market in Saudi Arabia.
The Middle-East and Africa Wood Coatings market is partially fragmented, with the top five players accounting for marginal share of the market. The key players in the market include, Benjamin Moore & Co., Akzo Nobel N.V., The Sherwin-Williams Company, BASF SE, and Jotun.
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