Wood Preservative Chemicals and Coatings Active Ingredient Market is Estimated to Witness High Growth Owing to Rising Construction Activities and Increasing Residential and Non-Residential Buildings
The wood preservative chemicals and coatings active ingredient market is estimated to be valued at USD 221.3 Mn in 2024 and exhibit a CAGR of 4.9% over the forecast period 2024-2031. The market is witnessing steady growth owing to rising construction activities globally and increasing residential and non-residential buildings construction which is significantly driving the demand for treated wood products. Furthermore, renovation and remodeling of existing infrastructure is further supporting market growth.
Market Dynamics:
Rising construction activities: The increasing residential and commercial construction activities across both developed and developing economies is one of the key drivers fueling the growth of the global wood preservatives market. The rapid urbanization and infrastructural development are expected to augment the demand for wood preservatives over the forecast period.
Increasing residential and non-residential buildings: With the growing population, there is increasing demand for housing and commercial spaces. This has propelled the demand for flooring, roofing, and other wooden structural elements in residential and non-residential buildings. The need to protect wood from termites, insects, and fungi has further stimulated the sales of wood preservative chemicals and active ingredients.
Drivers, Restraints, and Opportunities for the Wood Preservative Chemicals and Coatings Active Ingredient Market:
Increasing Construction Activity is Driving Demand for Wood Preservative Chemicals
The global construction industry has witnessed steady growth over the past few years and this is expected to continue going forward. As per estimates, the global construction output is projected to grow by 85% from 2018-2030. This increase in construction activity is directly translating to higher demand for wood and wood-based products which are extensively used in the construction of buildings, houses, fences and other structures. As wood requires protection from decay, insects and fungal damage, the growing volumes of wood being used in construction is driving up the need for wood preservative chemicals and active ingredients that are used in wood preservatives and coatings. The widespread application of wood in different construction projects makes increasing construction activity one of the primary growth drivers for this market.
Need for Protection of Wood Infrastructure is also Fueling Market Growth
Wood continues to be extensively used in building outdoor structures like decking, fences and wooden utility poles. However, prolonged exposure to harsh weather conditions can damage untreated wood over time. To protect the significant investment made in wood infrastructure and ensure its longevity, preservation treatments using chemicals are required. The growing replacement and repair requirements of aging wood infrastructure is leading to higher consumption of wood preservatives and protective coatings. Additionally, stringent regulations and standards regarding the treatment and preservation of wood utility poles and cross-arms that are used in power transmission are working as a market driver. With investments continuing to flow into wood infrastructure development, the need for protective solutions remains robust, benefitting the wood preservative chemicals market.
Stringent Environmental Regulations are limiting the Use of Certain Chemicals
While the market opportunities for wood preservative chemicals are abundant, environmental regulations pose a major challenge. Many traditional wood preservative active ingredients like Chromated copper arsenate (CCA) and creosote have now been banned or restricted in several regions due to environmental and health concerns. Strict regulations of the U.S. Environmental Protection Agency governing the use of toxic chemicals and heavy metals are limiting the application scope of conventional preservative formulations. This is compelling manufacturers to invest in developing safer alternatives to banned chemicals. However, the process of introducing new active ingredients is long and expensive which is negatively impacting short-term revenue prospects for players. Additionally, obtaining regulatory approvals for novel wood preservatives takes significant time and resources. Thus, changing environmental norms continue restricting market growth to a certain extent.
Lack of Awareness Hampers Widespread Adoption of Protective Solutions
Despite the critical need, lack of awareness regarding the benefits of wood preservative treatments is holding back the market from realizing its true potential. In certain regions, especially developing countries, people are not fully cognizant about the severe damages caused by untreated wood when exposed to outdoor conditions. As a result, they tend to undervalue the importance of protective coatings and chemicals. Even in developed markets, some consumers are hesitant to invest in wood preservatives thinking that visible damages may not occur for years. This lack of understanding and investment in preventive maintenance limits the sales volumes for manufacturers. Additionally, improper handling and storage of treated wood without adequate protection of chemicals also reduce their efficacy over time. Overall, enhancing education regarding best practices can help address this important market restraint.
Growing International Trade in Treated Wood Presents Export Opportunities
With growing globalization, international trade in wood and wood products has increased manifold in recent decades. Countries are extensively importing wood commodities and lumber for construction, infrastructure development as well as for manufacturing purposes. This rising trade in treated wood means greater export potential for wood preservative chemicals producers in major manufacturing economies. For instance, the U.S. which has stringent phytosanitary standards for imported wood packaging materials and structures relies greatly on preservative treatments. Hence, the U.S. remains an attractive export destination for Asian and European chemical makers targeting the large North American treated wood market. Similarly, other active wood importing regions like Middle East and Africa also offer noteworthy overseas sales opportunities.
Rising Usage of Nanotechnology to Develop Advanced Solutions
With the traditional preservative formulations facing environmental issues, nanotechnology is emerging as a promising technique to engineer safer and more effective wood protection solutions. Using nanoparticles, manufacturers are working on developing wood preservatives that can deliver enhanced protection against fungal decay and insects with minimal active ingredient load. The nano-scale penetration capability allows for deeper impregnation of chemicals within wood cellular structure compared to conventional solutions. Additionally, controlled release properties ensure long-lasting protection. There is active research underway to commercialize various nanotechnology-based wood preservatives which can open new growth avenues once approved. The ability to provide superior performance while complying with strict chemical controls makes nano-enabled products an attractive future.
Key Developments:
- In 2022, Lonza revealed plans to establish a large-scale facility for filling and finishing commercial medicinal products, designed to assist clients throughout all phases of the product life cycle. To achieve its goal of providing a comprehensive commercial fill and finish solution and enhancing its value chain, Lonza invested around CHF 500 million in this new facility.
- In 2022, International Flavors & Fragrances Inc. (IFF) successfully divested its microbial control business unit to specialty chemicals company LANXESS. Following the completion of the deal, LANXESS emerged as one of the largest global providers of microbiological control solutions. This acquisition expanded LANXESS's operations to include two production sites in the United States, located in Institute, West Virginia, and St. Charles, Louisiana. The acquired business will be incorporated into LANXESS's Material Protection Products division.
Key Player:
LANXESS AG, Janssen Preservation & Material Protection, Lonza Group AG, Akzo Nobel N.V., PPG Industries, Inc., BASF Wolman GmbH, Kurt Obermeier GmbH & Co. KG, RUTGERS Organics GmbH, Sarpap & Cecil Industries, Koopers Holdings Inc., Troy Corporation, Osaka Gas CHEMICALS Co., Ltd, Wacker Chemie AG, and Chemsol Inc.
