2024 Waterproof Materials Industry Special Report

North American market: high requirements, polymer waterproof, conducive to the establishment of the brand
North American developed markets have the following characteristics: 1) High quality requirements, mainly polymer products. The structure of new flat roof waterproof products in 2016 includes 40% TPO, 22% EDPM, 12% PVC, followed by SBS and BUR (NRCA cited Roofing Trends by Vince Hill); 2) Demand resilience, we expect the North American waterproof market size or about 300 billion yuan, which is mainly for renovation and maintenance demand, new demand in 2018 accounted for only 13%-14% (according to Principia), the United States construction spending since 2010 continued growth also supported the waterproof demand. We expect that if the waterproof company enters the developed markets in North America and can gain a firm foothold with mainstream polymer products, it will be conducive to establishing brand influence in the international market. In the following, we mainly review the situation of North American developed countries represented by the United States and Canada. American civil roofing is mostly slope roofing, mainly paved asphalt tile waterproof; The commercial roofing is mostly flat roofing, which is closer to the waterproof demand and the product portfolio of waterproof enterprises in China.

In the United States, flat roofing tends to use polymer waterproof products, and TPO is the most important material, accounting for 40% of the demand for new flat roofing in 2016, and the second and third are polymer EDPM and PVC. The proportion of TPO demand showed an increasing trend (11% in 2003 → 22% in 2008 → 40% in 2016), mainly due to several advantages of TPO. For example, single-layer waterproofing is more labor saving than traditional multi-layer asphalt based waterproofing, can meet the waterproof requirements of photovoltaic Roofing, the sunlight reflection is conducive to building energy conservation, and the excellent performance can better meet the requirements of waterproof protection life. (According to Vince Hill Roofing Trends, U.S. housing developers and residents are increasingly demanding waterproof protection, with the average warranty period provided by TPO roofing manufacturers rising from 12 years before 2008 to more than 17 years in 2017.) .

Middle East market: The waterproof market is not large, but the construction boom is high.
The Middle East market has the following characteristics: 1) due to the dry climate, the waterproof market is not large, we estimate that the size of the pure material market in 2014 is about 830 million US dollars, we expect that the current or more than a billion or a few billion dollars. However, in terms of product structure, considering that the proportion of polymer coil in the Middle East countries in 2014 is generally at a low level of 6%-12% (according to the statistics of Frost&Sullivan cited in the Awazel prospectus and the following paragraph), the rapid development of distributed photovoltaic or bring structural opportunities to increase the proportion of TPO waterproof; 2) The market concentration is relatively high, with CR6 in the Gulf region reaching 74% in 2014. Local enterprises dominate, including European and American enterprises. New entrants need to cultivate strong channels; 3) The construction demand boom is high, and many countries have launched medium and long-term development plans; 4) It is an important "Belt and Road" co-construction area, and Chinese-funded engineering companies participate in many projects. We expect that the opportunities for waterproof companies to go to sea come from cultivating strong channels, laying out differentiated waterproof products and other building materials related to construction needs such as mortar powder and non-woven fabrics, and seizing the opportunities of high construction prosperity.

Historically, the waterproofing market in the Gulf region has not been large, or mainly stems from the dry climate. According to the prospectus of Saudi Waterproofing Company Awazel (Arabian Waterproofing Industries Company) and the statistics quoted by Frost&Sullivan, the demand for waterproofing materials in the Gulf region in 2014 was 230 million square meters. Based on the demand and average price of each waterproof material in the following table, we estimate that the pure material market size in 2014 is about 830 million US dollars. In addition, considering Awazela's 2014 revenue of 353m Saudi riyals (US $0.267 / Saudi Riyals, equivalent to US $94 million), based on the company's disclosure that its share is 20% in the Gulf region, the market size is reversed to US $470 million, The magnitude is similar to the $830 million previously estimated. If we take into account the continuous growth of demand over the past decade (according to Wind, the average growth rate of the construction industry GDP of Saudi Arabia, Qatar, Iran, Egypt, and the UAE in 2014-2022 is 12%), we expect the current market size of waterproof pure materials in the Gulf region to be more than one billion or a few billion dollars.

Southeast Asian market: The market is more open and effective, and the construction demand potential is large
Southeast Asian market has the following characteristics: 1) a high degree of openness, waterproof and construction markets are involved in many multinational companies, the market environment is expected to be more standardized; 2) Due to the humid climate, the requirements for waterproofing are higher, and the effective market share of approved quality standard products is relatively high; 3) The urbanization rate is still not high, the construction demand potential is large, the construction demand will pick up in 2020, the manufacturing transfer and policy planning enabling infrastructure demand will increase, and the waterproof demand is expected to continue to grow; 4) Chinese-funded engineering companies participate in more projects, which is an important area of the "Belt and Road", and waterproof companies are expected to benefit accordingly. We expect that the Southeast Asian market is a better direction for waterproofing companies to go to sea, which is conducive to exerting the advantages of products and services, regulating competition, and sharing the growth potential of demand.