A new forecast from Frost & Sullivan presents the key perspectives on growth in the Chemicals, Materials and Food Industry in 2012 and shows where the next growth opportunities are in many different sectors and in new geographies.

Mega Trends

The four mega trends of low carbon economy, health and wellness, functionality and performance, and globalization will shape these markets. Green products like bioplastics, high demand for innovative chemicals and materials, and industry consolidation will dominate the chemicals and materials industry across Europe, while weight management, heart and digestive health will be the high growth sectors in food and beverage markets.

Dr Leonidas Dokos, research director at Frost & Sullivan says: "The four mega trends define the developments in the chemicals, materials and food industry. The food, mobility and construction markets remain core developments for 2012 exhibiting growth overall driven by the emerging economies."

Global Hot Spots

According to Frost & Sullivan, China, Brazil and Russia are the top priorities for construction and utilities players, while for transportation players the focus is on China, India and Brazil. In particular, the Indian demand for chemicals will grow on the back of massive growth in end-user industries such as automotive production. China's development of green technology will draw in strong chemicals investment, even for technologies such as electric vehicles.

The Western European market remains the priority for EU based manufacturers over other regions. North America and Eastern Europe are the next priority while Russia presents significant opportunities across sectors, especially in construction, water treatment, transportation and personal protection equipment.

Latin America will be the hub for bioethanol and Brazil will continue to export it to neighboring nations. There will also be increasing focus in oil and gas exploration with restructure in the state petrochemicals companies.

Brazil, in particular, is forecast to become a major center of supply for bio-based feedstocks and will be the construction hot spot until 2016 (supported by the 2014 Football World Cup and the 2016 Olympic Games).
The food and beverage suppliers are looking at China, India and Brazil as emerging markets while in Europe the focus is and will be on bakery ingredients.

Industry Consolidation

Targeted consolidation in the chemicals and materials industry continues as one of the main highlights of recent years, but the number of closed deals will be smaller due to widespread lack of cash availability. However, in 2012 we will witness a mega acquisition of a top 100 global chemicals company headquartered in Europe, says the Frost & Sullivan report.

As a general forecast for all segments, the continuing debt crisis in the euro zone and the high US government debt continue to undermine the speed of the macroeconomic recovery of markets and the level of investment available.