The chemical sector plays a strong role in the materials market
The construction chemical market in the GCC was worth over $770million in 2008, a figure expected to rise to over $1billion by 2015.
Of course, 2008 saw the advent of the global financial crisis and the subsequent downturn in the construction industry.
However, this had the result of elevating construction chemical companies to the status of strategic partners, as contractors and developers alike adopted increasingly sophisticated engineering solutions to cut costs and increase quality.
“The current business environment is still cautious, and even now finds itself under financial pressure,” says Henkel Polybit Industries GM marketing Thorsten Schneider.
Innovative Building Solutions (IBS) LLC business development director Laith Haboubi concurs. Laticrete RAK LLC marketing manager Colin de Mello says “Laticrete as a brand is placed in a market segment which is the first to revive, and the last to be affected by the crisis.”
“The market shrank considerably over the past couple of years, yet the number of players remained more or less the same. There is certainly a greater emphasis on value addition as profit margins remain tight for all those involved in the construction supply chain,” says Haboubi.
There is light at the end of the tunnel though. “However, we do see a strong change in the business environment towards a brighter future for the construction industry.
The challenges are obvious, and we have countered them with our strategic business expansion into Saudi Arabia, Libya and the Maghreb region,” says Schneider.
He adds that the company has been focusing on educational events such as training sessions and client presentations rather than traditional advertising-based marketing.
Companies such as Henkel, Mapei and Laticrete have seen a greater emphasis on the wider region, particularly with the expected uptake in construction activity in Qatar due to the 2022 FIFA World Cup.
“We have seen a greater emphasis on this region after the announcement,” says Schneider.
“The coverage is bringing Qatar into focus. This will lead to strong strategic and long-term investments.” De Mello says Laticrete is “getting a very good response from the region,” and is positioning itself as “a leading supplier” for upcoming projects.
Haboubi points out that IBS-Mapei “remains focused heavily on the UAE market, with only about 10% to 15% of our turnover being diverted to GCC exports. Obviously, there is now a great buzz about the Qatari market, which will hopefully have a positive effect on other Gulf markets from a supplier’s perspective.”
Schneider urges caution, “However, we have to be realistic, as it is still more than ten years to go. There is no urge for Qatar to start the majority of the needed construction earlier than five years before the actual start of the FIFA World Cup.”
He points out that Henkel is already co-operating with both clients and consultants in this particular market in terms of specifications and applications.
“Moreover, we are one of the main suppliers of infrastructure-related products and systems in Qatar in terms of projects such as roads, bridges, airport expansion, metros, railway systems and sewage plants, a lot of which are starting or are ongoing already,” says Schneider.
Construction chemical companies have also assumed greater strategic importance in the larger industry due to increasing engineering sophistication balanced against cost-cutting and value engineering.
“It is correct to say that we anticipated a shift to high-end and sophisticated solutions/systems,” says Schneider.
“Absolutely,” says Haboubi. “Modern construction methods rely increasingly rely on construction chemicals to deliver results, including performance and durability. However, it does take a certain proactive approach on behalf of the various project stakeholders to integrate the use of construction chemicals at an early enough stage to really extract maximum value, rather than use them as problem solvers.”
“Technological sophistication and value engineering do not have an antagonistic relationship. All technological development should ultimately result in cost-saving and resource optimisation. Technology for the sake of technology is no good; new technology has to be practical,” says de Mello.
Schneider points out another worrying development: “Since the global downturn did we not see a real rehabilitation of the market and a shift away from cost cutting and value engineering.
The clients are still cautious, and are ready to compromise on quality on the finish to secure financial stability, which ensures the completion of the project.”
Obviously a lot rides on using the right product for the correct application. “Every product is just as good as its application,” says Schneider. “This is why Henkel introduced the Henkel Academy, which trains clients, consultants, specialised applicators and contractors in the correct and efficient use of our products.”
“Among the biggest issues facing quality construction chemical suppliers has been a lack of unified specifications or building codes,” argues Haboubi.
Industry organisations such as MEDMA (Middle East Dry Mix Mortar Association) and CTI (Concrete Technology Institute) are working to educate the market, and elevate awareness of standards such as ISO 13007, which has recently been adopted by the Gulf Standards Organisation (GSO), as well as green classification such as GEV, which is relevant in terms of LEED and Estidama-rated projects.
Recent standards such as EN1504 and EN13813 all help in the correction selection of the right product for the right application, as well as defining performance criteria, says Haboubi.
“One of our biggest tasks lies in educating our customers that a product might seem to be expensive in the first place, but it lasts five times longer than any product currently or wrongly used. This saves a lot of money for the client and results in the highest customer satisfaction,” says Schneider.
“The Middle East market is a much more open and dynamic market than the UK and the US. There is fast acceptance of new technology. The construction industry has rich resources in terms of having people come from all over the world and bringing with them the best technology from their own countries,” says de Mello.
Haboubi, on the other hand, says: “In general, it is fair to say that the Middle East construction chemicals market lags behind more mature markets, although there are some segments of the market where this is changing dramatically – for example, admixtures used in readymix and precast concrete, where environmental as well as durability issues have shaped the use of sophisticated systems such as polycarboxilic ethers (PCEs) to great effect.
We are also seeing a trend whereby more sophisticated materials are being accepted, but the key is the correct specification in the first place; otherwise it will always be a price issue.”
Schneider says the majority of high-rise buildings “show some of the most sophisticated construction methods and systems. Before the downturn, clients and consultants have always been keen to use sophisticated, long-lasting and high-end systems.”
However, with most of the so-called ‘C’ products, which are seen to play an unimportant role in construction, the awareness and willingness to use appropriate and up-to-date products is not so high.
Schneider says the usual tendency in the market is a reluctance to spend money on products that cannot be seen. This ranges from tile and flooring adhesives down to simple primers.
“It is absolutely correct that no building will collapse due to the wrongly-used products or wrong application methods. But I am sure everybody has experienced how inconvenient maintenance work can get, especially when this maintenance work has to executed several times.”
This is where companies like Henkel, IBS-Mapei and Laticrete play a critical role in raising standards and awareness. “Being a pioneer in the chemical industry, we have always educated industry professionals on the introduction of new technology,” says de Mello.
Laticrete, for example, is a Continuing Professional Development (CPD) education provider for AIA-registered architects. “We provide on-site support and training to installers free of charge.”
Schneider says Henkel employs more than 3,000 R&D specialists “to meet the demands of our customers and to meet the specifications of the latest standards.
It is our duty to inform, train and educate our customers from presentations down to detailed trainings to keep them up to date with the latest technologies and newest standards. This enables our clients to employ this information in upcoming or design-stage projects, or in ongoing projects.
“Having said that, the biggest task is to keep that knowledge in this market, as the construction market is still dominated by an expat culture. Those expatriates are usually not staying longer than three to five years in this market, and then take all the knowledge with them. This is why we emphasise training in teams to foster teamwork and knowledge transfer within the company.
“The same problems are applicable to the workers (not specialised applicators), as it is often the case that workers trained for a certain technology or standard do not do that job anymore the next day and are then pulled onto another job or different application,” says Schneider.
Haboubi says the range of adhesives produced locally in Dubai by IBS-Mapei mainly for the GCC market are fully compliant with GSO:ISO 13007, and many are GEV certified.
“This puts us in a somewhat unique position, one where we are constantly carrying out product training to ensure that specifiers are conversant with these standards, and importantly that installers are able to correctly and safely apply the products.”
This would seem to imply that growth in the market is dependent on constant innovation and customer collaboration.
“This market was obviously, and still is, the fastest-growing construction market, where some of the latest technologies and innovations could be and have been employed.
To fulfill the requirements of some of the products, new technologies had to be developed as they had, and have to, meet the special requirements for this booming region, which here is especially related to the climate, speed and work environment.
However, most of the technologies you find in this market are not new. They are based on extensive experience gained in Europe, the US and Asia Pacific, and have been adapted to local parameters.
“Having said that, it is clear this market is dependent on constant innovation and customer collaboration to increase the quality, especially in interior fittings.
It is also one of our permanent tasks to raise awareness of protecting the health of the tenant – for example, materials should be used which do not allow the growth of fungus or spores, which can cause allergies and other diseases,” says Schneider.
Haboubi says innovation and customer collaboration tend to be different sides of the same coin.
“It is a bit of both. Our strategy has been to not only introduce products complying with the latest standards and application methods, but also to show the contractor or installer the end value, whether through a ‘right first-time approach, or issues such as durability or time/resource saving.
“This is important, as a specification-only approach is often undermined if all the stakeholders in the construction chain fail to understand the real value and benefit,” says Haboubi.
One example of this has been the introduction of prebagged rapid-hydrating screeds such as Topcem, which has revolutionised the approach to fast-tracking an installation, particularly moisture-sensitive finishes such as resin agglomerate stone and wooden floors.
“We have enjoyed particularly healthy growth in sales of this product over the past 18 months, as installers have typically been able to save two to three weeks of programme time without compromising the performance or durability of the floor finish,” says Haboubi.
The shift in focus in the construction industry from residential and commercial to infrastructure has not hindered growth in the chemicals sector. “Since the start of our regional operation we have been strong in products related to infrastructure projects,” says Schneider.
“We offer the entire range from waterproofing to sealants and products related to interior fit-out. Literally, whenever and wherever something has to be protected or glued, Henkel has the right product.”
Haboubi says IBS-Mapei’s range of screeds, self-levelling compounds, adhesives and grouts “remain in high demand as many of the residential/commercial projects are still in their finishing stages.
“However, we are now experiencing healthy demand for many of our Mapegrout concrete repair and Mapelastic protective coating systems or infrastructure projects. We have had to recruit more people with heavy civil backgrounds in order to provide the level of service and support that such projects require.”
Lightweight, micro-protection products that are more than 30% lighter than standard products, but deliver the same coverage. This lessens the weight impact on the worker during application and reduces the carbon footprint because due to less transportation and less raw material use.
All lightweight products also use a high amount of recycled materials. The micro-protection range withstands mould and fungus growth. They are designed to deliver long-lasting, high-performing systems that can withstand such mould effects up to five years.
The company will be introducing several new ‘fast-track’ installation products due to the healthy demand it has received from the market. It will also be introducing a unique new technical service which will be of particular interest to architects as well as marble and stone installers.
Is introducing a new range of concrete-repair products. It has recently introduced products such as PermaColor, a grout for all types of narrow or wide joints. HydroBan allows fast-track waterproofing which can be flood-tested on the same day as its application, saving time and labour.