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The global construction industry has been on a steady growth trajectory over the last decade. The trend is projected to further continue over the next five years. Increased investment in infrastructure, commercial, and residential sectors will keep presenting growth opportunities for construction chemical firms globally. As a result, construction chemical companies are constantly seeking ways to enhance their market position and drive growth.
One of the strategies that has gained prominence among players is mergers and acquisitions. To create a powerhouse in the fast-growing construction chemicals market, firms are actively pursuing mergers and acquisition deals, especially in the North and Latin American market.
Through the acquisition of Quimexur and PASA®, Holcim is propelling its Strategy 2025 - Accelerating Green Growth by targeting a significant expansion of its Solutions & Products business, with a goal to reach 30% of group net sales by 2025. This strategic move enables Holcim to enter the highly lucrative growth sectors of construction, including roofing systems, insulation, and renovation.
In 2022, Holcim also entered into an acquisition deal in the United States, when the firm acquired the Polymers Sealants North America division of Illinois Tool Works.
Having manufacturing plants in Georgia, Arizona, California, Texas, and Massachusetts, Polymers Sealants North America is expected to accelerate the growth of Holcim over the next three to four years in the United States.
In North America, Beacon Roofing Supply has also adopted the mergers and acquisitions strategy to accelerate its growth in the fast-growing construction chemicals space. Since the start of 2022, the firm has been on an acquisition spree, purchasing waterproofing and other related businesses in the United States.
All of these acquisition deals are part of the firm’s strategy to achieve its Ambition 2025 targets, which emphasizes accelerated growth trajectory and value-creation for shareholders. In 2022, Beacon Roofing Supply has been able to outperform the industry, owing to its various strategic initiatives including mergers and acquisition deals. Going forward, ConsTrack360 expects the firm to further acquire more businesses in the segment, to expand the top line and margin growth.
This trend of mergers and acquisitions is also picking up pace in the Indian market, where the construction chemical industry is offering a lucrative growth opportunity to both existing players and new entrants.
In India, the construction chemical market is poised to record accelerated growth over the next five years, on the back of increased government spending in areas of infrastructure development and the affordable housing sector. To tap into the growing market size, many existing and new players have announced multi-billion-dollar investments in the sector to scale their production capacity. Furthermore, firms are also planning to expand their reach in Tier II and III cities of India, by boosting their retail network.
As the construction chemical market continues to grow worldwide, ConsTrack360 expects players in the segment to keep looking for potential acquisition deals. This will subsequently enable them to grow their global presence and expand their top line and margin growth over the next three to four years.
