Saudi Arabia Construction Chemicals Market

The Saudi Arabia Construction Chemicals Market is valued at USD 7600 Million in 2023 and is projected to reach a value of USD 12880 Million by 2032 at a CAGR (Compound Annual Growth Rate) of 6.1% between 2024 and 2032. The Saudi Arabia Construction Chemicals Market is driven by rapid urbanization, growing infrastructure projects, and increasing demand for durable building materials. Government initiatives, such as Vision 2030 & investments in large-scale developments further boost market growth.

Key Highlights

• The government intends to invest USD 71.5 billion in enhancing Saudi Arabia’s transportation and tourism infrastructure
• The government aims to transform Saudi Arabia into a global trade center by raising the private sector’s share of GDP from 40% to 65% by 2030 and increasing foreign direct investment from 3.8% to the global average of 5.7% of GDP
• With a budget of USD 97.2 billion, this plan aims to enhance intra-regional trade and export capabilities, with completion expected by 2040
• Saudi Arabia is set to finalize agreements with South Korean and Chinese companies for a USD 100 billion project to build 1 million affordable housing units in the coming years

Product Type Overview

Based on Product Type, the market is segmented into Adhesives, Sealants, Concrete Admixtures, Protective Coatings, Waterproofing Chemicals, Repair and Rehabilitation Chemicals, and Others. Among these, Concrete Admixtures hold the largest market share due to their benefits, including a lower cement-to-water ratio, faster setting times, reduced segregation, and improved permeability. Additionally, waterproofing & roofing chemicals are anticipated to lead the market during the forecast period, driven by the increasing demand for waterproofing solutions in repair and rehabilitation projects. These chemicals, including epoxy-based repair mortars, rust removers, and anti-corrosion products, are essential for preventing water infiltration.

End User Industry Overview

Based on End User Industry, the market is divided into Residential, Commercial, Industrial, and Infrastructure. The residential segment commands the largest market share due to the expansion of individual homes and the development of smart residential buildings with top-notch amenities. The surge in demand for construction chemicals in Saudi Arabia's real estate market is driven by increased urbanization and a growing urban population. Evolving lifestyles, rapid urbanization, improved living standards, and a rising preference for attractive residential structures are expected to further boost the Saudi Arabia Construction Chemicals Market during the forecast period.

Country Overview

In 2024, Al-Riyadh commands the largest market share at 45.2% and is projected to experience the highest CAGR during the forecast period. This growth is driven by substantial construction projects such as Qiddiya, New Murabba, Diriyah, King Salman Park, and Riyadh Sports Boulevard, which demand a diverse range of construction chemicals in large quantities.

The New Murabba project, set to be the largest downtown area in Riyadh, will feature extensive developments including a museum, a university, a theater, and over 80 entertainment and cultural venues, comparable in size to 20 Empire State Buildings. Diriyah, known for its historical significance, will see the creation of over 30 cultural institutions, including museums, academic facilities, and creatively designed residential spaces.

Makkah also holds a significant market share, with Thakher Makkah planning land sales exceeding USD 400 million for the construction of three hotel-residential towers. Additionally, the Jeddah Tower, set to surpass 1,000 meters in height, and Jeddah Central, covering 5.7 million square meters, are major developments. Jeddah Economic City, spanning 5.4 million square meters, will encompass residential areas, commercial hubs, business districts, diplomatic zones, and educational institutions.

Key Trends

1. Growing Urbanization: Rapid urban development and increased infrastructure projects drive demand for construction chemicals, particularly in residential and commercial sectors.
2. Sustainability Focus: There is a rising emphasis on eco-friendly and sustainable construction materials, leading to increased adoption of green construction chemicals.
3. Technological Advancements: Innovations in construction chemical technologies, such as advanced concrete admixtures and high-performance coatings, are enhancing building durability and efficiency.
4. Government Initiatives: Government projects and initiatives, including Vision 2030, are fueling investments in large-scale infrastructure and residential developments, boosting the construction chemicals market.
5. Increasing Repair and Renovation Activities: The growing need for maintenance and refurbishment of existing structures is driving the demand for repair and rehabilitation chemicals.
6. Smart Building Trends: The rise of smart buildings and infrastructure, incorporating advanced construction chemicals for enhanced performance and energy efficiency, is a significant market trend.
7. Expansion of Retail and Commercial Sectors: Increased construction activity in retail, commercial, and hospitality sectors contributes to higher demand for a wide range of construction chemicals.

Market Dynamics

Growing Demand for Construction Chemicals

The demand for construction chemicals in Saudi Arabia is set to surge as the country undertakes significant infrastructure expansion, structural reforms, and technological advancements. Major infrastructure megaprojects, particularly in renewable energy, are propellig this growth. The government’s efforts to enhance transport infrastructure, electricity, utility facilities, and affordable housing programs are further stimulating the need for construction chemicals. For example, the National Transformation Program (NTP) 2020 outlines a $71.5 billion investment in the development of transport and tourism infrastructure, which is expected to drive increased demand for construction chemicals.

Focus on Sustainable and Green Building

Saudi Arabia is prioritizing smart and green buildings, aligning with Vision 2030 and various initiatives from the Ministry of Housing. Notable projects include NEOM, a future megacity powered entirely by renewable energy, and King Salman Energy Park (SPARK), the world's first LEED pre-certified industrial area. This focus on sustainability is expected to boost demand for concrete surface retarders. Green buildings incorporate sustainable materials and practices to achieve superior surface finishes & aesthetic appeal, with water-based retarders enhancing architectural beauty and providing slip-resistance to concrete surfaces.

Impact of Raw Material Price Fluctuations

The construction chemicals market faces significant challenges due to the volatility in energy & raw material prices, coupled with economic fluctuations. These factors contribute to a slower rate of market expansion. The uncertainties surrounding changes in government regulations can delay project timelines, further impeding market growth. Environmental concerns also play a role, as the interaction between construction chemicals & environmental gases can have detrimental effects on living organisms, adding another layer of complexity to the market's growth prospects.

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Competitive Landscape

The Saudi Arabia Construction Chemicals Market is characterized by its fragmentation, with numerous manufacturing companies operating in the region. Market leaders maintain their dominance through substantial investments in research and development, the integration of advanced technologies into their products, & the introduction of innovative solutions. They employ various strategies, including strategic alliances, agreements, mergers, and partnerships, to strengthen their market position.

For instance, major projects such as NEOM, the Red Sea Project, and Qiddiya, part of Vision 2030, exemplify the market's growth potential & ambition, driving the demand for construction chemicals across the Kingdom.

Recent Market Developments

• In February 2024, Mapei is advancing its international expansion strategy with the acquisition of Bitumat, a prominent manufacturer of waterproofing systems headquartered in Dammam, Saudi Arabia. As a global leader in construction chemicals, Mapei aims to strengthen its presence in the Middle East, where it already operates in the UAE and Qatar. The acquisition of Bitumat from GIC - Gulf Investment Corporation includes its main factory in the 2nd Industrial City of Dammam, which spans over 100,000 square meters, and a manufacturing plant in Bahrain.
• In November 2023, Saint-Gobain has signed a definitive agreement to acquire Izomaks Industries LLC, a leading manufacturer of waterproofing products in Saudi Arabia. Izomaks, which operates two manufacturing facilities in Riyadh and employs approximately 140 people, is expected to generate revenues of around €60 million in 2023. This acquisition will enhance Saint-Gobain's existing building envelope solutions in Saudi Arabia, where the company has been active since 2007.

The Saudi Arabia Construction Chemicals market can be categorized as Product Type, Function, Technology, and End User Industry.