The South America primary battery market is expected to grow at a CAGR of more than 0.72% during the forecast period of 2020 – 2025. The demand for primary batteries remains high across the world, owing to the numerous advantages of primary batteries, such as low cost, wide application across consumer electronics, including flashlights, calculators, clocks, and smoke alarms. Factors such as rising demand for primary batteries in military applications and increased demand for consumer electronics are expected to drive the market over the forecast period. On the other hand, the increasing adoption of secondary batteries is expected to restrain the growth of the market.
- The primary alkaline battery is expected to dominate the market in South America, owing to their factors such as lower cost and environment-friendly characteristics.
- The domestic production of primary batteries and the replacement of carbon-zinc with alkaline batteries can create immense opportunities for the primary battery market in coming years.
- Brazil is expected to witness significant demand due to its increased urbanization and GDP growth rate in the coming years.
Key Market Trends
Primary Alkaline Battery to Dominate the Market
- The primary alkaline battery is expected to dominate the market in 2019 and is expected to continue its dominance over the forecast period. These types of batteries have high specific energy and are cost-effective, environment-friendly, and leak-proof, even when fully discharged. Alkaline can be stored for up to 10 years, has a good safety record, and can be carried on an aircraft without being subject to the United Nations transport and other regulations.
- Alkaline batteries offer higher energy output, longer shelf life, and lasts longer than carbon-zinc batteries, and have emerged as a replacement for carbon-zinc batteries, since 1960.
- Over the years, the North American and European regions have accounted for the major demand for alkaline batteries. However, owing to factors, such as the shift from carbon-zinc batteries, the demand for alkaline batteries in Asia-Pacific and South America is expected to remain high.
- The price of alkaline batteries is higher, as compared to zinc-carbon batteries, but the prolonged longevity of the alkaline batteries makes it more popular. The longer lifecycle of alkaline batteries improves their utility value, which is a major factor behind their adoption.
- There have been major advancements in alkaline cell performance over the recent decades. These advancements have been a result of changes in packaging and manufacturing techniques, rather than any improvements to the basic chemical system.
- Moreover, alkaline batteries are environment-friendly, which can be disposed as trash. Also, they do not require active collection and recycling. However, the batteries that were made are mercury-free and hence, do not pose any environmental pollution or hazard on disposal. This creates a positive demand for these batteries since other rechargeable consumer batteries need to be properly collected and recycled.
- Therefore, based on these factors, primary alkaline battery is likely to witness significant demand over the forecast period.
Brazil to Witness Significant Demand
- In the long-term, Brazil’s economic outlook is expected to be better, with increased urbanization and a positive GDP growth rate, while the domestic disposable income per household is likely to increase. Urbanization, when coupled with higher disposable income, is consequently expected to increase the demand for household gadgets which uses primary batteries. The consumer electronics market is expected to grow at a slow pace in the short term, but it is likely to increase in the long run.
- The country has witnessed an increase in urbanization. In 2018, 86.569% of the country's population lived in urban cities, which was 86.309% in the previous year. It is forecasted that the urbanization is expected to rise but at a modest rate in the country.
- The country witnessed recovery from recession in 2017. In 2016, the country's GDP growth rate was negative (-3.276%). However, supported by an ambitious reform agenda by the new government, a constitutional amendment has been passed, which caps non-interest federal spending, the country saw a positive GDP growth rate of 1.323% in 2017. The economic indicators suggest a positive economic outlook in the long term. As of 2018, the GDP growth rate was 1.317% and thus expected to be increasing in the coming years.
- The economic downturn in Brazil, indicated by the negative or low growth in GDP, particularly since 2014, has impacted negatively on the medical equipment market. But with the expected growth during the forecast period, the medical equipment market is expected to register a moderate growth, in turn driving the primary batteries demand for medical equipment.
- In Brazil, the major supplier countries for primary batteries includes China, the United States, and Germany. The import values of primary batteries in Brazil is way higher than the export, which signifies the high dependency on imports to meet the requirements of primary batteries. Distributor networks and channel partners of overseas manufacturing firms cater to the market demand for primary batteries, in Brazil.
- Therefore, based on the above-mentioned factors, Brazil is expected to witness significant demand for primary battery market during the forecast period.
The South America primary battery market is moderately fragmented. Some of the major players include Camelion Battery Co. Ltd, Duracell Inc., Energizer Holdings Inc., Saft Groupe SA, and Panasonic Corporation.
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