below grade waterproofing market forecast

Stratview Research 24-06-2020

One of the most critical elements that decide the life of any structure is the quality and extent of its waterproofing. Though a waterproofing system typically amounts to less than 1% of the total construction cost, it plays a critical role in ensuring the quality and longevity of the structure. Poor focus on waterproofing of a structure can significantly undermine the expenditure incurred on every other aspect of the building.

The role played by below-grade waterproofing is even more critical due to the complex infrastructure of modern cities, the time and disruption caused by maintenance and repair far supersede the cost involved in applying below-grade waterproofing. Because of such challenges, it becomes more significant when compared with above-grade, and also because they are exposed to the withering forces of water and corrosion for prolonged periods and with greater intensity.

Below-grade waterproofing systems are popularly used in the public infrastructure and construction sector for structures, such as basement slabs, foundations walls, planters, tunnels, bridges, sidewalk vaults, elevator pits, plaza decks, split slabs, sub-structures, and drainage systems. They are an integral part of almost every structure.

The global waterproofing market was estimated at around US$ 8.0 billion in 2019, and out of which below-grade waterproofing accounted for a 15% share. The share is expected to increase as more complex structures are the need of the day.

Diving Deeper into the Below-Grade Waterproofing Market

The touchstone of excellent below-grade waterproofing material is the set of qualities such as- uniform thickness, flexibility, being able to resist the constant hydrostatic pressure, chemical erosion, especially under high groundwater conditions and have a low absorption rate to protect the structures. It is through membranes, that below-grade waterproofing is done. They are subsumed under two categories- Sheet-Based Membrane and Liquid-Coated Membrane.

  • Material: Sheet-based membranes are made of Polymers, Bentonite, and Rubberized Asphalt. Liquid-coated membranes, on the other hand, are made using Bitumen and Cementitious materials.
  • Market Share: Sheet-Based Membranes are more popular with around two-thirds of the share owing to properties like robustness, self-reinforcement, and controlled thickness; there is no need for mixing or specialized equipment either.
  • Growth: Increasing usage of breathable waterproofing membranes and environmentally safe materials are driving the growth of sheet-based below-grade waterproofing market.

The selection of the type of sheet and its materials depends on a wide array of factors such as site and soil conditions, water table information, service life, total cost of ownership, and the construction process.

Here is a quick material-based analysis:

Polymers

  • Largest material segment due to advantages such as lightweight, flexibility, high efficiency, and environmental safety.
  • HDPE (High-density polyethylene), PVC (Polyvinyl chloride), and TPO (Thermoplastic olefin) are the main polymers.

Bitumen

  • Is the second largest segment and is highly popular in Europe.         

Bentonite-based

  • It is a fast emerging popular material with unique absorbent properties.
  • Sodium bentonite is most commonly used in blind-side waterproofing systems.                                                                  

Hybrid

  • Development began with bentonite being combined with HDPE and thermoplastics to obtain high-performance membranes.
  • The failure of Styrene-Butadiene-Styrene (SBS) and Atactic Polypropylene Plastomeric (APP) bitumen to act as a water barrier, led to the development of hybrid membranes.

There are four ways in which below-grade waterproofing can be applied and they are:

  • Fluid-Applied: Covered around less than half of the market in 2019, due to high affordability and use of Bitumen. There are three ways in which fluid-application is done: Spray-Applied, Cold-Applied, and Hot-Applied.
  • Self-Adhered: Impressive growth of this segment is due to the qualities like controlled thickness, excellent reliability, excellent chemical resistance, no VOCs, and high crack coverage.
  • Fully bonded: Highly suitable for basement waterproofing as they come in 1-2 meter wide rolls and bond with concrete to prevent lateral water underflow and migration.
  • Loose-laid: Are easy to install and are economical.

The Steady and Impressive Growth Dynamics

The COVID-19 crisis has upended every industry, without exception. But our estimates foretell a sanguine picture of growth which is expected to rebound in 2021, after a period of growth hiatus in 2020.

The below-grade waterproofing market is expected to contract by near 14% in 2020 and then rebound impressively to reach a market size of US$ 1.45 bn by 2025.

Factors contributing to the Growth

  • Expected Rise in Construction Industry

Expected healthy growth in the construction sector creates a sustainable demand for all construction materials such as below-grade waterproofing systems.

  • Expected Increase in Investments in the Construction of Public Infrastructure and Taller Buildings

The governments in developing countries will aggressively push for the development of excellent infrastructure for their people. Especially in nations, such as India and China, spending on smart cities, special economic zones, and other infrastructure development projects such as bridges, flyovers, and subways will fuel demand. Such developments will prop-up the growth of below-grade waterproofing in the construction sector.

  • Demand for Safe and Long-Lasting Infrastructure

Complex construction and busy cities magnify the cost of repairing leakages in the structural concrete many times more than the initial cost of waterproofing. These constraints have heightened the significance and demand for below-grade waterproofing.

  • Increasing Demand for Energy-Efficient Buildings

Growing interest in green building concepts such as vegetative roofs, plaza decks etc. are highly favorable to the demand for below-grade waterproofing systems.

Regional & Competitive Analysis

China, Japan, the USA, India, and the UK are the largest markets which collectively contributed around 60.0% share of the below-grade waterproofing market in 2019.

Half of the market share belongs to Asia-Pacific because of high level construction, followed by Europe and North America.

below grade waterproofing market by country

The market is moderately consolidated with the top three players- GCP Applied Technologies, Sika AG, and RPM International Inc. capturing 30% of the market in 2019.

below grade waterproofing market share

Product Innovations and Inorganic Growth

A series of product launches as well as merger and acquisition activities indicate that the industry is vibrant, dynamic and growing. Here are the most recent product launches:

  • MasterSeal® 730 UVS by BASF SE
  • SikaProof® A-12 by Sika AG
  • Voltex DS, by CETCO (Minerals Technologies Inc.)
  • MiraPLY™ by Carlisle Companies Inc.
  • Sikaplan® WP 1130-25C, by Sika Corporation US
  • MasterPel™ 777, MasterEmaco™ SBR 2, MasterEmaco™ SBR ECO by BASF India
  • PVC Membrane, by Sika AG

The use of unique adhesive bonds to increase leak performance as well as development  of hybrid products indicate the demand for better material to match the challenging requirements of modern infrastructure.

The frequent M&A activity indicates that the market is profitable and growing.

2019:

  • American private equity firm, Lone Star Funds acquired BASF’s Construction Chemical business.
  • Sika AG completed the acquisition of Parex Ltd. to expand its product portfolio in construction chemicals and further strengthen its position.
  • Sika AG completed the acquisition of King Packaged Materials Company for geographical expansion in Canada and to tap the growth potential in the home improvement, construction and mining and tunnelling markets.

2018:

  • To strengthen its position Romanian market and to extend its product portfolio, Sika acquired Arcon Membrane Srl, a leading manufacturer of roofing and waterproofing systems.
  • GCP Applied Technologies acquired R.I.W. Limited, a U.K-based company that provides waterproofing products.
  • As a part of Sika’s regional expansion, it acquired a majority stake in Index Construction Systems and Products, Italy to expand in the Italian market.
  • Mapei SpA acquired Tecnopol Sistemas, S.L.U., a Spanish waterproofing and insulation system producer and distributor.

Such frequent acquisition activities are indicative that the market is growing and is attractive. Sika seems to be pursuing an aggressive inorganic growth and regional strategy.

Conclusion

The rapid strides of technology have led to the emergence of new modes of manufacturing from 3D printing of houses to different concepts of construction such as green buildings. The industry is changing and the quest for better solutions has led to the emergence of new hybrid products which offer reliability and leverage diverse material qualities.

Our research envisions a growth in volume, as well as value, from 2021 onwards. The fundamentals look strong and the growth is expected to respond promptly to economic recovery.

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