Coherent Market Insights

Cladding Systems Market to surpass US$ 12.01 Bn by 2031

Cladding Systems Market to surpass US$ 12.01 Bn by 2031 - Coherent Market Insights

Publish In: Jul 19, 2024

Global Cladding Systems Market Driven By Increasing Construction Projects And Growth In Renovation Activities

The global cladding systems market is estimated to witness high growth owing to increasing construction projects and growth in renovation activities. The global cladding systems market is estimated to be valued at US$ 5.12 Bn in 2024, exhibiting a CAGR of 12.9% over the forecast period (2024-2031). Furthermore, growth in commercial construction and rising demand for facade and interior solutions are also expected to drive the market growth.

Market Dynamics:

Global cladding systems market is primarily driven by continuous growth in construction activities across both the residential and non-residential sectors. Rapid urbanization and rising disposable income have increased residential construction in developing economies. Moreover, growth in non-residential sectors such as office spaces, healthcare, educational institutions, etc. also contributes to the market growth. Most construction projects now emphasize on aesthetics and energy efficiency which further propels the demand for advanced cladding systems. New product launches catering to these demands also support the market expansion. However, high initial costs of deployment and fluctuations in raw material prices remain key challenges for smooth market growth. Ongoing research and development focusing on cost-effective and sustainable solutions are expected to counter such challenges.

Increasing Demand for Energy Efficient and Aesthetic Building Facades

Global cladding systems market has seen rising demand for energy efficient and aesthetically pleasing building facades. Cladding systems provide insulation which helps reduce energy costs for the heating and cooling of buildings. They improve the thermal performance of walls and also help attain higher ratings in green building certifications. Various types of cladding like metal, wood, stone, and terracotta offer different aesthetic appearances which architects and builders are leveraging to provide unique and attractive designs for commercial and residential projects. This has significantly driven the adoption of cladding systems among new construction as well as renovation projects.

Rising Commercial and Residential Construction Activities

Another key driver has been the increase in the commercial and residential construction activities across major regions. Rising population and urbanization have boosted the demand for homes, offices, malls, and other real estate developments. Cladding plays an important role in the exteriors of different types of buildings. With growth in the construction industry, especially in developing nations, the cladding systems market has witnessed considerable growth. Various government initiatives to develop infrastructure and boost real estate sector in countries like China, India, etc. have also positively impacted market revenues.

Volatility in Raw Material Prices

One of the key restraints affecting the cladding systems market is volatility in the prices of raw materials. Metals like aluminum, steel, and zinc which are widely used in cladding undergo fluctuations in international commodity markets. This adds an element of unpredictability in production costs. Raw material price hike can reduce margins for manufacturers if not passed on entirely to customers. Supply chain disruptions during COVID-19 pandemic also impacted raw material availability and prices at certain points. This poses a challenge for stakeholders to maintain profitability.

High Initial Capital Investments

Setting up a cladding manufacturing plant requires substantial capital investments in machinery, tooling, and R&D. There are also ongoing operational expenses. This high initial setup cost deters new entrants and restricts capacity expansion for smaller players. It favors large corporations with strong financial resources who can invest heavier amounts. The barrier to entry stops the cladding market from fragmenting and intensifies competition among existing manufacturers. This restrains cheaper innovation and limits product choices for buyers.

Rising Usage in Non-residential Sectors

One opportunity area is the increasing applicability of cladding systems in non-residential sectors like healthcare, retail, hospitality, education, etc. These segments have growing construction needs and also stricter requirements regarding energy-efficiency, hygiene and aesthetics. Advancements in cladding material properties and installation techniques are making them suitable for applications beyond homes and offices. This widens the addressable market scope and helps manufacturers target diverse end-use industries.

Product Innovation and Customization

Cladding manufacturers have an opportunity to enhance growth through new product launches, customized solutions, and value-added services. Developing cladding with advanced properties like self-cleaning, anti-microbial, sound insulation, etc. can unlock demand from niche application areas. Offering customized dimensions, colors, and façade design services broadens the appeal. Integrating building-integrated photovoltaics is another avenue to tap into renewable energy demand. Successful product differentiation and customization helps command premium pricing in the competitive market.

Link: https://www.coherentmarketinsights.com/market-insight/cladding-systems-market-695

Key Developments:

  • In June 2023, Saint-Gobain, a global leader in light and sustainable construction, announced that it had signed a definitive agreement to acquire Building Products of Canada Corp., a privately-owned Canada-based manufacturer of residential roofing shingles and wood fiber insulation panels.
  • In June 2023, Etex, a global leader in building materials and lightweight construction, finalized its acquisition of Superglass, a prominent U.K.-based manufacturer of glass mineral wool insulation. With this strategic move, Etex expanded its European footprint in sustainable insulation materials, complementing its existing URSA brand which produces both glass mineral wool and extruded polystyrene (XPS) insulation products.
  • In February 2023, Tata Steel, one of the world's leading steel producers, established a Centre for Innovation in Mining and Mineral Beneficiation at the Indian Institute of Technology (Indian School of Mines) in Dhanbad, India
  • In August 2022, Kingspan, a global leader in high-performance insulation and building envelope solutions, established its Roofing + Waterproofing global platform through the strategic acquisitions of Ondura Group and Derbigum. These acquisitions have significantly expanded Kingspan's capabilities in roofing and waterproofing solutions, allowing the company to offer a comprehensive range of products from the primary outer layer of the roof to the secondary underlay.

Key Players:

Arconic Corporation, Armstrong Metalldeckan AG, Axiall Corporation, Boral Limited, Cembrit Holding A/S, Compagnie de Saint-Gobain S.A., CSR Limited, DuPont de Nemours, Inc., Etex Group, James Hardie Industries PLC, Kingspan PLC, Louisiana Pacific Corporation, Nichiha Corporation, Tata Steel Ltd, and Westlake Chemicals

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