What’s Hot in the Chemicals, Materials & Food Industry


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Trends, Opportunities, and Challenges Through the Eyes of the Key Participants in the Chemicals, Materials & Food Industry

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What’s Hot in the Chemicals, Materials & Food Industry

  1. 1. What’s Hot in the Chemicals, Materials & Food Industry Trends, Opportunities, and Challenges Through the Eyes of the Key Participants in the Chemicals, Materials & Food Industry
  2. 2. Dear Sir/Madam, Thank you for taking the time to complete Frost & Sullivan’s inaugural ‘2013 Search for Growth’ survey. We received 1,835 completes from executives in more than 40 countries who selected, in total, more than 20,000 hot topics. Frost & Sullivan’s research team used the findings, and your open text feedback, to select and prioritise the topics that were deemed to be poised for the greatest growth and have since conducted (or have in the pipeline) primary research on over 70% of the topics that you selected. As a token of our thanks, we have put together some insights for you from the survey on each vertical market. We also teamed up with the design consultancy Orb to create an infographic that highlights the top 3 growth areas by vertical market and provides estimated aggregate growth rates for the hot spots in those markets. If you would like to speak with our analysts about the findings, or any of the markets forecast to grow at the highest rates, please send me an email and I will arrange it for you. We also had 5 iPad winners and sent copies of the Mega Trends book to the first 100 respondents— thanks to you all also, we trust you liked the prizes. After the excellent feedback we received on the last survey, we are going to repeat it in October 2013 to provide you with benchmarks on how the market sees growth in 2014. We will also benchmark your estimates of the growth rates with those of our research team, which we are particularly excited about. So thanks again for your time, and if you have any questions, please do get in touch. Kind regards, Noel.anderson@frost.com Vice President Growth Partnership Services 9833-39 2
  3. 3. Chemicals, Materials and Food What Participants see as Hot Topics and why? Materials Market for Energy-Efficient Buildings Construction Chemicals • As energy performance requirements increases in each country, systems incorporating high performance insulation materials will manifest more growth. Manufacturers providing end-to-end solutions will offer maximum value to the customers when compared to suppliers providing stand alone solutions for these markets. Even amidst the current mixed global economic landscape construction chemicals remain in the top of the agenda for emerging as well as developed markets driven by the urbanisation megatrend and a massive infrastructure development. Although differentiation is a difficult task for the construction chemicals sector, as the products are mostly commodities and the construction sector traditionally has been quite conservative, key producers are trying to reach a higher level of differentiation by closely working with customers in order to understand needs and develop customer-focused solutions for specific applications. • Construction chemical suppliers are focusing on strengthening their relationships with contractors and architects, working in tandem with them to identify cost-effective options within their portfolio rather than pushing their products uni-directionally into the market. • 9833-39 With buildings representing one of the biggest energy consumers, governments around the world have started focusing on more energy efficient buildings in order to achieve their respective carbon emissions reduction and energy efficiency goals. For example buildings account for 42% of the EU’s final energy consumption and for about 35% of all greenhouse gas emissions. The growth of “green” and “net-zero energy” buildings will drive the need for sustainable insulation systems and materials. The massive growth in emerging markets, building renovation in Europe and the evolving standards in the U.S will be amongst the major driving forces behind the growth of materials for energy efficient buildings. • Flexible Packaging Hot Topics - Factors Highlighting Importance of Topics • Growth in end applications such as food, medical, pharmaceuticals, and consumer packaged goods will drive the growth of the flexible packaging market. The development of new packaging technologies and products will also aid the growth of these applications. • The increased focus on sustainability will continue to be a major trend in the packaging industry, which supports the adoption of materials from renewable sources. Changing consumer lifestyles and increasing dependency on processed, packed, and pre-cooked food are the major drivers for flexible packaging in food and beverage applications, which is the largest end segment application. 3
  4. 4. Contents Section What’s Hot in 2013 Slide Number 5 • Key Perspectives on Growth in the Chemicals, Materials & Food Industry in 2013 6 • Market Highlights for 2013 7 • Chemicals, Materials & Food—What Participants See as Hot Topics in 2013 8 • Chemicals, Materials & Food—Convergence with Other Industries 13 • Global Hot Spots in the Chemicals, Materials & Food Industry 14 • Four Big Predictions for 2013 15 • Chemicals, Materials & Food—The Link to All Sectors 16 The Frost & Sullivan Story 9833-39 18 4
  5. 5. What’s Hot in 2013 9833-39 5
  6. 6. Key Perspectives on Growth in the Chemicals, Materials & Food Industry for 2013 1 Shale gas is already having a significant impact on a number of industries as an energy source, fuel, and potential feedstock and this will intensify in 2013. 2 Food-related markets including processing, packaging, logistics, and antimicrobial additives represent the key growth drivers in this industry. 3 Materials and chemicals that support and promote clean and sustainable energy technologies and energy efficiency are on the top of the agenda of stakeholders across the value chain. 4 In terms of emerging markets, BRIC is leading the developments, but Turkey and Southeast Asia countries such as Vietnam, Indonesia, and Malaysia are strengthening their global position as production and consumption hot spots. 5 The 5 key industries tracked by chemicals, materials & food are construction & utilities, transportation, foods and beverage, personal protective equipment, and food, drug, and cosmetics. 9833-39 Source: Frost & Sullivan 6
  7. 7. Market Highlights for 2013 Key Market Highlights • The food, mobility, and construction markets were in the core of developments for 2012, exhibiting growth overall and driven by the emerging economies. The pattern in 2013 is not so different from last year. • Renewable energy applications, especially offshore wind turbines and photovoltaics, continue to present healthy growth opportunities in developed markets such as Europe and the United States. In addition, materials for energy efficient buildings in the form of complete solutions, such as exterior insulating finishing systems (EIFS) and structural insulated panels (SIPs), will also present significant growth. • Targeted consolidation in the chemicals and materials industry continues as the theme of recent years but the number of closed deals will be smaller due to the continued widespread lack of available cash. The continuing uncertain economic situation in the eurozone and the high US government debt continues to undermine the speed of the macroeconomic recovery of markets and the level of investment available. • Shale gas, primarily in the United States, has consolidated its role as the industry game changer and the lift of the ban on shale gas fracking from the UK government signifies a change, in general, in the European political volition about further exploring the dynamics of this market. • Indian demand for active pharmaceutical ingredients and personal care products reflects the improvement in healthcare and the growing spending power of an affluent middle-class. End-user industries, such as automotive production and construction, will also exhibit growth. • China's development of green technology will continue to draw in strong chemicals investment in photovoltaics and even for technologies such as electric vehicles. Brazil continues to become a major centre of supply for biobased feedstocks and market opportunities including crop protection chemicals, plant health improvement agents, and nutricosmetics. • Massive developments in crops used as biofeedstock for the production of fuels, chemicals, and materials. Lignin will become a critical area of development. Source: Frost & Sullivan 9833-39 7
  8. 8. Chemicals, Materials & Food—What Participants See as Hot Topics in 2013 Chemicals, Materials & Food: Identification of Hot Topics, Europe, 2013 Rank Market Topic % of Respondents Nominating as Hottest Topic 1 Food Processing Sector Growth Opportunities 60% 2 Materials Market for Energy-efficient Buildings 46% 3 Construction Chemicals 46% 4 The Impact of Globalisation Mega Trend on the Automotive Materials Sector 46% 5 Flexible Packaging 42% 6 Mega Trends for Agrochemicals and FDC 40% 7 Engineering Plastics Market 36% 8 Lighweighting 36% 9 Antimicrobial Additives for Food and Beverage vs. Packaging Solutions 36% 10 Explosive Growth in the Animal Feed Market 36% 11 Changing Dynamics in the Food and Beverage Logistics 35% 12 Food and Beverage Processing Equipment 35% 13 Photovoltaic Chemicals and Materials 34% 14 PPE Distribution 33% 15 Battery Materials Markets for Electric Vehicles (EV) 32% . Source: Frost & Sullivan 9833-39 8
  9. 9. Chemicals, Materials & Food—What Participants See as Hot Technology Topics in 2013 Technical Insights: Identification of Chemicals, Materials & Food Hot Topics, Europe, 2013 Rank Market Topic % of Respondents Nominating as Hottest Topic 1 Clean and Green Environment Technology Cluster 41% 2 Sustainable Energy Technology Cluster 36% 3 Sensors and Controls Technology Cluster 31% 4 ICT Technology Cluster 24% 5 Materials and Coatings Technology Cluster 22% 6 Advanced Manufacturing and Automation Technology Cluster 22% 7 Health and Wellness Technology Cluster 20% 8 Medical Devices and Imaging Technology Cluster 18% 9 Microelectronics Technology Cluster 13% The highlighted clusters illustrate the direct relationship to the chemicals, materials and food sectors and the high ranking each received from respondents across the industries. Renewable systems are still high in the technology agenda of the stakeholders followed by a rejuvenation in the various coatings application markets Source: Frost & Sullivan 9833-39 9
  10. 10. Chemicals, Materials & Food—Convergence with Other Industries Key Industries Tracked in Addition to Company’s Core Markets, Europe, 2013 Industry Cross-interest 1 Cross-interest 2 Cross-interest 3 n A&D ICT 39% A&T 26% EPS 20% 111 A&T EPS 25% ICT 24% EBT 9% 282 CMF EPS 37% A&T 36% EBT 27% 167 EPS EBT 24% A&T 20% IPC 18% 180 EBT EPS 44% ICT 26% CMF 21% 57 HC ICT 18% CMF 15% M&I 8% 238 IPC EPS 42% A&T 26% CMF 26% 78 ICT HC 23% A&T 19% EPS 19% 371 M&I A&T 42% EPS 38% IPC 38% 26 A&D = Aerospace & Defence A&T = Automotive & Transportation CMF = Chemicals, Materials & Food EPS = Energy & Power Supplies EBT = Environment & Building Technologies 9833-39 HC = Healthcare IPC = Industry & Process Control ICT = Information & Communication Technology M&I = Measurement & Instrumentation Source: Frost & Sullivan 10
  11. 11. Interest in Mega Trends Interested Overall (n=1820) Undecided Not interested 73% A&D 22% 66% A&T 23% 11% 73% CMF 23% 81% EPS EBT 77% 19% 27% 64% ICT 4% 6% 31% 75% M&I 2% 23% 67% IPC 4% 17% 76% HC 5% 5% 20% 77% 12% 4% 12% The strongest interest can be identified in CMF with 81%, 8% above the overall average. A&D = Aerospace & Defence A&T = Automotive & Transportation CMF = Chemicals, Materials & Food EPS = Energy & Power Supplies EBT = Environment & Building Technologies HC = Healthcare IPC = Industry & Process Control ICT = Information & Communication Technology M&I = Measurement & Instrumentation Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan 9833-39 11
  12. 12. Ranking of Mega Trends—Variation by Industry Overall A&D A&T CMF New Business Models: Value for Many 53% 51% 45% Future of Mobility 51% 51% 73% 37% Social Trends 44% 37% 45% 37% Beyond BRIC: The Next Game Changers 43% 62% 45% Connectivity and Convergence 42% 44% 45% Future Infrastructure Development 40% 38% 42% Smart is the New Green 38% 37% 35% Health, Wellness, and WellBeing Urbanization: City as a Customer Innovating to Zero Bricks and Clicks 31% 29% 30% 27% 30% 11% A&D = Aerospace & Defence A&T = Automotive & Transportation CMF = Chemicals, Materials & Food EPS = Energy & Power Supplies EBT = Environment & Building Technologies 9833-39 15% 10% 18% 38% 25% 10% 47% 50% 18% 40% 53% 38% EPS 50% 34% 31% 43% 33% EBT 46% 24% 60% 38% IPC 62% 50% 74% 24% 41% 52% 39% 43% 43% 44% 39% 43% 44% 23% 36% 55% 59% 18% 38% 12% 33% 42% 27% 26% 14% 49% 32% 12% 81% 14% 23% 8% ICT 48% 60% 37% 10% HC 54% 30% 70% 40% M&I 43% 29% 14% 57% 21% 43% 25% 29% 22% 19% 21% 33% 20% 26% 19% 9% 10% 7% 21% 7% HC = Healthcare IPC = Industry & Process Control ICT = Information & Communication Technology M&I = Measurement & Instrumentation Note: All figures are rounded. The base year is 2013. Source: Frost & Sullivan 12
  13. 13. Chemicals, Materials & Food—Convergence with other Industries Key Areas of Technology Convergence Construction & Utilities Transportation High Speed Rail Infrastructure Lightweight Materials, Composite Materials, Advanced Coatings, Functional Fluids, Fuel & Lubricant Additives, Adhesives, Electric Vehicles, Catalysts Smart Grid, Photovoltai c, Oilfield Chemicals Solar Thermal, Wind Energy, Shale Gas Materials & Batteries for EV Antimicrobial Coatings, Bioci des for Water Treatment Water & Wastewater Treatment, Green Materials, Geotextiles Personal Wellbeing Low Carbon Economy Chemicals and Materials PPE Food, Drug & Cosmetics Excipients, Plasti cs for Medical Devices Nutricosmetics & Nutraceuticals, M ultifunctional & Natural Active Ingredients, Func tional Foods Food & Beverage Automotive & Transportation Aerospace & Defence Energy & Power Supplies Healthcare Bioplastics for Packaging Environment & Building Technologies Source: Frost & Sullivan 9833-39 13
  14. 14. Chemicals, Materials & Food Industry—Global Hot Spots Chemicals, Materials and Food Markets: Global Hot Spots & Hot Markets, Global, 2013 • Shale gas is on the top of the agenda as an energy source, fuel, and feedstock, but also as an outlet market for relevant chemicals. • Industry consolidation to continue. • Other hot markets include materials for energy efficient buildings, materials for automotive, adhesives and sealants in healthcare, and eye health solutions. • Need for prevention and better general health drives the nutricosmetics market and increasing private healthcare. ,expenditure drives the market for plastics in medical devices • Materials for energy efficient buildings and the smart grid infrastructure will exhibit growth. • Lightweight materials and composites in transportation are key markets with high speed rail in the epicentre. • Economic contraction continues affecting the Southern European countries. North America Europe • Vast supply of feedstock and strategic alliances with American and European companies • Construction growth resumes with opportunities for concrete admixtures, hot melts, and geotextiles. • Military coatings, materials for public transport, and plant health improvement agents complete the diverse hot markets. Latin America • Latin American hub for bioethanol and exports to neighbouring nations • Hot spot for biobased feedstocks, and biofertilisers and biopesticides key growing markets • Increasing focus in mining and oil and gas exploration, as well on engineering plastics • Brazil is construction hot spot until 2016 (World Cup and Olympic Games). Russia China The Middle East India Africa • Emerging oil and gas market opportunities • Infrastructure development and construction • Chemicals & materials for water & agriculture APAC • Russia presents significant opportunities across sectors, especially in crop protection, construction, water treatment, public transport, and PPE. • Manufacturing and consuming hub • Continuous increase per capita usage of chemicals • Increasing competency in R&D and high-value added products • Growth opportunities driven by new infrastructure, Mega Cities and mobility. • Large population base and low costs with increasing per capita spending power • Hot markets include high speed rail, public transport, crop protection chemicals, personal care, mining, and construction. • High population and development needs across all sectors: transportation, construction, infrastructure, sanitation, healthcare, food • Highly skilled labour and low costs – attractive market for partnerships • Growing affluent middle-class with spending power for personal care Source: Frost & Sullivan 9833-39 14
  15. 15. Four Big Predictions for 2013 1 2013 will continue to be the year of “green” technology routes and products, especially lignin and bio-feedstock. 2 Lightweight materials and specifically composites continue to strengthen their presence and uptake in the transportation sector, including automotive, aviation, marine, and high speed rail and will result in high demands for innovative chemicals and materials. 3 Industry consolidation to continue with mega acquisitions, 8 companies from the top 120 global chemicals companies headquartered in US and Europe are potential targets. 4 Eye health solutions, brain and cognitive health food, women’s health ingredients, and bone and joint health will be the high growth sectors in Food and Beverages together with processing equipment. Source: Frost & Sullivan 9833-39 15
  16. 16. Chemicals, Materials & Food—The Link to All Sectors Source: Frost & Sullivan 9833-39 16
  17. 17. Disclaimer Frost & Sullivan takes no responsibility for any incorrect information supplied to us by manufacturers or users. Quantitative market information is based primarily on interviews and, therefore, is subject to fluctuation. Frost & Sullivan research services are limited publications containing valuable market information provided to a select group of customers in response to orders. Our customers acknowledge, when ordering, that Frost & Sullivan research services are for their internal use and not for general publication or disclosure to third parties. No part of this research service may be given, lent, resold or disclosed to non-customers without written permission. Furthermore, no part may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the permission of the publisher. For information regarding permission, write to: Frost & Sullivan 4 Grosvenor Gardens, London SW1W 0DH The United Kingdom © 2013 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan. 9833-39 17
  18. 18. The Frost & Sullivan Story 9833-39 18
  19. 19. Who is Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best-in-class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best-practice models to drive the generation, evaluation, and implementation of powerful growth strategies. Frost & Sullivan leverages 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com. 9833-39 19
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