San Jose, California -- According to a new report by Global Industry Analysts Inc., the global market for industrial thermal insulation will reach a value of $5000 million by 2017.
Primary drivers behind this growth include: surging energy prices and the need to curtail cooling and heating costs through efficient thermal insulation; increased plant refurbishments; and growing opportunities from niche markets.
"Technology innovations and robust demand from developing markets, particularly Asia-Pacific, also augur well for the market," GIA commented.
The economic recession led to a decline in demand for thermal insulation across all product sectors, including fibrous and cellular industrial thermal insulation. The industry witnessed order cancellations, cuts in inventories by customers and lower demand from economically sensitive end user segments such as automotive and consumer goods industry. Projects cancellations in the energy sector, which forms another prominent end user segment for the industry, also impacted the growth prospects of industrial thermal insulation market.
As a result, GIA said, demand tilted towards low-cost alternatives within product mixes, which negatively impacted the profit margins of manufacturers.
Following this temporary decline, the market bounced back in 2010 and is expected to experience healthy growth in upcoming years, says GIA.
Growth in the market over the next few years will be driven by continued rise in energy prices and the need to control heating and cooling costs, which account for major portion of the total energy expenditure in most of the industries using efficient thermal insulation products.
The US is the largest regional market for industrial thermal insulation worldwide, but Asia-Pacific is the fastest growing, with dollar sales from the region projected to rise at a CAGR (compound annual growth rate) of about 4.6 percent to 2017.
The market is expected to benefit from urbanisation in emerging markets such as China and India. Surging infrastructure investments in these countries is also expected to create a market climate which will encourage growth of insulation products in the region.
Cellular thermal insulation represents the fastest growing independent market segment by material type, with dollar sales rising at a CAGR of about 3.7 percent over the analysis period. GIA added.