Frost Radar™: Sustainable Construction Materials, 2025

Strategic Imperative and Growth Environment

Strategic Imperative

• Regulations and public demand to address environmental impacts are compelling construction companies to adopt sustainable practices that reduce emissions and enhance energy efficiency in buildings. Climate change-related extreme weather events serve as a stark reminder of the urgent need for comprehensive action.
• From a manufacturer’s perspective, decisions made during the design phase of construction projects can significantly influence a material's life cycle, often hindering end-of-life advantages and complicating the shift from linear to circular models.
• Innovative digital solutions are emerging to tackle these challenges by integrating artificial intelligence (AI), digital twins, material passports, and other technologies into supply chains. The “buildings as material banks” concept advocates for new business models focused on alternative material sourcing, leasing, repair economies, and reuse strategies.
• Ultimately, these advancements aim to promote reuse and upcycling and maximize energy efficiency in buildings, paving the way for a more sustainable future in construction.
• The geopolitical landscape, marked by instability from the Russo-Ukrainian War and conflicts in the Middle East, alongside uncertainties brought about by the Trump administration’s abrupt policy shifts, adds complexity to the situation. The US government’s push to reduce dependency on China also is prompting a reevaluation of supply chains.

Growth Environment

• By weight, the construction materials market exceeds 50 billion tonnes per year, with about 80% of this being aggregates and sand. When these categories are excluded, the weight is about 9 billion tonnes (nearly 50% is cement, more than 30% is bricks, about 10% is steel, and 7% is timber; the remainder is plastic, glass, insulation, and other materials).
• The top 13 companies (Saint-Gobain, China National Building, CRH, Holcim, Daikin, Anhui Conch Cement, Ferguson, Heidelberg, BBMG, AGC, Cemex, Grasim and Sika) control about 30% of the fragmented, $1.1 trillion market, with thousands of smaller companies in the other 70%. The market is becoming increasingly concentrated as major companies pursue an aggressive acquisition strategy.
• This industry has been slow in adopting new technologies, most likely because construction site workforces, which are beyond vendor control, are used to doing their trades in a certain way. Migrating skills in unregulated workforces is a slow process in itself.
• Trends mostly develop at a regional or local level, driven by building codes, government funding, thermal efficiency regulation, home loans, or specific disaster recovery actions.
• Decarbonization and circular economy-based efforts are seen across the industry, most notably in hard-to-abate sectors, such as cement and plastics insulation. Nevertheless, they vary a lot from place to place, even within the same company.
• A Frost & Sullivan study related to this independent analysis:
  • Global Sustainable Construction Material Growth Opportunities

Frost Radar: Sustainable Construction Materials

• The companies considered for benchmarking in this Frost Radar™ analysis provide chemicals and/or materials to the construction industry. Frost & Sullivan chose the largest based on annual revenue, assuming that they have the greatest influence on the industry and its sustainability initiatives. Some have a global reach; others are locally strong. Many are manufacturers, though some also acquire raw materials and semi-finished and finished products from third parties to complete their portfolios.
• BASF and Dow are among those with a chemical background and supply dozens of verticals beyond construction. Holcim, Heidelberg, CRH, and Shaw are firmly in the construction materials side of business. Mapei, Saint-Gobain, Sika, and SOPREMA offer products in both spheres.
• Companies with global footprints have reaffirmed their leadership with top positions on the Frost Radar™: Sika, Holcim, Saint-Gobain, Mapei, Dow, Heidelberg, Henkel, and BASF all have proven innovation strategies that back up solid growth.
• Covestro, DuPont, Shin-Etsu, and SOPREMA also have a global presence. All seem to have a stronger competitive position than companies with more of a focus on a single country, given the current state of trade tensions between the United States and China.
• AGC, NSG, and Saint-Gobain (all with activity in the architectural glass realm) have initiatives to increase the amount of recycled content in their portfolios, with plans for increasing its percentage in the manufacturing process. Arkema also is using more recycled content, and is designing products (e.g., Bostik's R3BOND adhesive) to enable better recovery of the flooring that it is supposed to glue. CRH is improving products' end-of-life benefits, such as through modular precast concrete elements that simplify disassembly and recoverability.
• Several companies could include market or corporation responsibility-oriented actions to deal with the labor shortage to enhance their livelihoods. These include Howard Industries, Owens Corning, Westlake, and Shaw.