The Asphalt Additive Market Braces for Infrastructural Requirements of APAC

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A recent outlook on the capital project and infrastructure (CP&I) spending, presented an estimate that the global infrastructure spending can possibly reach $29 trillion between 2016 and 2020. Both long-term as well as short-term demand is expected from building of better transport connectivity and facilities to mobilize the working class in public and commercial environment. In between the sunny and the shady dynamics of global economy, CP&I activities will continue to find stability in Asia-Pacific growth scenario. China, India, and Indonesia are the nations in this region that face rapid urbanization. Employment rates have shot up, enabling local population with increased buying power. More vehicles owned, more houses bought, cities expanding into the countryside and each other; long story short, the demand for wider city roads, pavements & sidewalks, connecting highways, exit ways, and transport infrastructure now shoot for the sky. Among the key ingredients in the creation of these expansion stories are asphalt additives.

Know the asphalt additive market better

Asphalt is a sticky, black, viscoelastic polymer that occurs naturally in the environment or may be manufactured in industrial facilities. This semi-solid petroleum is alternatively called as bitumen. It is more commonly used for making asphalt concrete, which is used in road construction activities. Tarmac is the trademark composite used for building airport runways. Previous use of their raw state drew up certain complications post the finalization of construction. Later in 1990s, it was found that when it is modified prior to its us, added to its strength and durability, plus resulted in better construction outcomes. Patents were issued and obtained for these class modifiers by several agencies. Among these early modifiers were polymer binders, anti-stripping agents, fillers, fibers, and/or extenders. The constructions after the introduction of these asphalt additives were exhibited lower rut formation, reduced cracking, and less raveling.

According to a recent report by Allied Market Research, road construction accounted for consumption of 1,224 kilo tons of asphalt additives in 2014. The consumption figure has ever since been on an increase. All other application sectors, such as road pavements, airport runways, parking lots, and roofing trailed way behind with a couple of hundreds kilo tons of consumption. As forecasted, CAGR for each of these application segment will register steady incline during 2016–2022. The global asphalt additive market demand during the period will grow at a CAGR of 7.7%, and the overall market size by revenue is expected to surpass $2 billion by 2022.

The noteworthy rise of APAC as a consumer

Infrastructure planning experts consider fixing disrupted road routes, properly a better option rather than just patching them. City development agencies are always on the hook for providing better infrastructure services. Market intelligence exhibits that such organizations when traced down in developing regions have added pressure of new routing projects. Governments sanction construction tenders worth billions to help these organizations to cope with increasing need for new structures. The recent trend of hedge funding from multiple sources has helped the construction groups take up large-scale projects without much market inhibition.

Rising construction activities especially in the Asia-Pacific drive the world asphalt additives market. Polymerized asphalt cement (PAC), novophalt, multigrade asphalt cement (MAC), polyester modifier, asphalt rubber, neoprene, and styrene-butadiene latex (SBR) comprise the list modifiers used as asphalt additives in the market. In 2015, the polymerized asphalt cement (PAC) segment occupied around half of the overall asphalt additives market, and is expected to maintain its lead. Novophalt additives is anticipated to the fastest growing segment. Asia-Pacific and LAMEA regions combined was accountable for two-thirds of the revenue generated in global asphalt additive market. Asia-Pacific asphalt additives market is expected to reach $968 million by the end of 2022, registering the highest CAGR of 7.4% during 2016–2022. The road construction application segment occupied more than half of the market in 2015, three-fourths out of which China was singularly held responsible. The Indian market scenario, however, does show remarkable promise of outstand that figure with highest expected CAGR of 9.2%.

Asphalt additive market: The manufacturers’ perspective

Manufacturers of different types of asphalt additives reinvent their own final mixes, experimenting with previous compositions and handling temperatures. They intend to target on-site needs of acquired or future projects, as well as help them reduce the overall costs of operation. Improvising on the quality of the mixes gives them a competitive edge of their direct competitors. Frequent product launches remain common for all leading industry names in the asphalt additive industry.

Companies trying to eliminate the need for adding water to the asphalt mixes along with the additives. Dry mixes have been thus gaining certain amount of attention from the industry. This acts against the interests of stakeholders in the asphalt additives market. Production technologies of these modifiers have come a long way from what we can call as history. The focus now, is to reduce asphalt production temperatures to meet the stringent government regulations on the usage of hot melt asphalt. This results from the corporate-social responsibility to enforce sustainable development procedures in industrial facilities. Not only has the environment, but also the manufacturers themselves have benefitted from the novice asphalt additive concentrates. Continuous monitoring of the roadways constructed with these, exhibit better load bearing capacities. The factor is more importantly regarded by contractors for state and national highways, along with suchlike routes, that have to bear regular passage of heavy transport fleets.

The asphalt additive market also faces threat from major projects that are delayed or on-hold. Announced ventures are sometimes forgotten, once the election season precedes. Some also suffer the difference in development interests of the previous versus the new government. If vendors in the industry are able to cope with the prospective instabilities through judicious business strategies, the evolving markets readily prop with huge profit potentials.

Eswar Prasad Research Analyst at Allied Market Research Eswar has more than six years of experience in market research and consulting in chemical and energy domains. He is actively involved in analyzing markets for specialty chemicals, commodity chemicals, bulk chemicals, materials, oil & gas equipment, petrochemicals, power industry, renewable & non-renewable energy and others. He is a part of multiple consult projects, syndicate and customized studies, with active involvement in providing critical business research insights to clients with his industry expertize. He is experienced in planning, commissioning, multi-tasking, and executing projects to attain specific client needs. His strength lies in trend analysis, data forecast, procurement analysis, building analytical models, business consulting and so on.

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