Megatrends will Change the Way Chemicals are Used in Construction & Utilities

Megatrends Will Change the Way Chemicals Megatrends Will Change the Way Chemicals are Used in Construction & Utilitiesare Used in Construction & Utilities

Health and Wellness will be the Biggest Driver of ChangeHealth and Wellness will be the Biggest Driver of Change

Dr. Brian Balmer, Dr. Leo DokosDr. Brian Balmer, Dr. Leo Dokos

Chemicals & Materials

21 June 2012

© 2012 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the written approval of Frost & Sullivan.

Today’s Presenters

Dr. Leo Dokos,

Research Director

Frost & Sullivan

Dr. Brian Balmer,

Industry Principal

Frost & Sullivan

2

• Performance Materials

• Twelve years' research experience at Frost & Sullivan

• Contributor to the company's Megatrends vision

• Chemicals & Materials in Transportation, Construction & Utilities

• Thirteen years’ experience in technical, materials and market research

• Directing the strategy of two programme areas

Focus Points

Introduction

Healthy Building Trends

3

Healthy Water Trends

Conclusions

IntroductionMegatrends and Applications of Chemicals & Materials

The need to enhance functionality & performance

Improvements in health & wellness

Chemicals &Materials

4

Globalisation of people, products and processes

Development of a low carbon economy

Construction

& Utilities

FDC & Personal

Protection

Automotive &

Transportation

Why Now?Health & Wellness issues in Construction & Utilities sectors are regularly in the news

• The need for clean, healthy water was re-emphasised during the UN's World Water Day 2012, on 22 March

• The impact of our buildings on our health & wellness has been emphasised in recent years by the re-emergence of problems such as rickets, as people (especially children) spend more and more time indoors

• Solutions from the Chemicals & Materials industry have important roles to play in meeting the needs of these markets

"If you're like most Americans, 90 percent of your life is spent indoors. Therefore, it is critical to

"Well-being is about much more than money: it is about the possibilities that people have to fulfil the

5

"Following fresh concerns about vitamin D deficiency, the UK’s 4 Chief Medical Officers have written to health professionals reminding them about this issue.

"Figures show up to a quarter of the population has low levels of vitamin D in their blood."

BBC news, Feb 2012

life is spent indoors. Therefore, it is critical to ensure your home is as healthy as it can be!"

Dow Safetouch brochure

about the possibilities that people have to fulfil the life plans they have reason to choose and pursue. Thus, our call for a new economics - an economics of human development."

20th UN Human Development Report, 2010

Healthy Building Trends

Healthy BuildingsFive major health & wellness trends will drive change in the use of chemicals in the

Construction sector

7

Architectural design Design, layout and ergonomic considerations


Construction sector

Letting good things in

Optimising ambient conditions of natural light, ventilation and humidity, without compromising thermal insulation performance

8

Keeping bad things out

Minimising external pollution such as noise & allergens



Construction sector

Letting good things in

Optimising ambient conditions of natural light, ventilation and humidity, without compromising thermal insulation performance

Safe building materials

Air quality, emissions & toxicity concerns

9

Keeping bad things out

Minimising external pollution such as noise & allergens


Hygienic buildings

Disease, micro-organisms, mould, pest infestations etc.

Source: Pots of Paint

Source: Frost & Sullivan

Healthy BuildingsExternal environmental factors (good and bad)

Letting Good Things In

• Importance

• Access to natural sunlight and good ventilation is critical to the feeling of well-being indoors, but is at odds with the desire to make buildings as energy-efficient as possible too.

• Impact on Chemical Industry

• New energy-efficient glazing technologies

Keeping Bad Things Out

• Importance

• Negative aspects of the external environment, especially noise, are a major cause of health problems (in this case stress and heart problems).


• Several chemical products can help reduce the impact of noise pollution

10

• New energy-efficient glazing technologies let more light in without compromising the building's energy rating.

• Winners

• Akzo Nobel with its Dulux "Light & Space" paint range

reduce the impact of noise pollution (noise insulation, acoustic glazing, and gap sealants)

• Winners

• Bayer Material Science, with several noise insulation solutions

Healthy BuildingsChemical & biological factors

Safe Building Materials

• Importance

• Several chemicals in construction products have been linked with health problems, such as formaldehyde and paint solvents


• Move towards "free from..." products, e.g. solvent-free paints, formaldehyde-free wood composites

Hygienic Buildings

• Importance

• Protection against disease is a major concern in public buildings, especially healthcare facilities


• Opportunity for antimicrobial products including both coatings and plastics

11

wood composites

• Winners

• Henkel with Ceresit Microgranular, a tile adhesive designed to create less irritating dust

• Winners

• Agion antimicrobial technology, which is integrated into a number of end-products

• DuPont with its Corian work surface materials

Source: Pots of Paint

Healthy BuildingsOverall building design factors

Architectural Design

• Importance

• LEED certification now includes considerations linked to design and ergonomic considerations for the occupants


• A critical factor for architecture in general, the opportunities for new building

12

the opportunities for new building materials and construction chemicals are still be discovered

• Winners

• Rehau, a company that has recognised this need and is: "systematically revolutionizing... the design and functionality as well as the safety and comfort of construction."

Poll Question

Which of these five issues do

you think will have the greatest

impact on the chemicals &

materials used in buildings,

up to 2020?

• Letting good things in

• Keeping bad things out

• Safe building materials

13

• Hygienic buildings

• Architectural design and ergonomics

Healthy Water Trends

Health & Wellness Trends in WaterWhilst low-carbon and sustainability trends are an important driver of change in water, health

& wellness trends still dominate

Health & Wellness

15



Health & Wellness

Environmental risks Drinking water

16



Health & Wellness

Availability QualityIndustry risks External environment


17



Health & Wellness


Day to daymanagement

Emergencyresponse Sourcing

Makingdrinkable Chemical Bacterial


18

management response Sourcing drinkable Chemical Bacterial



Health & Wellness



Emergencyresponse Sourcing

Makingdrinkable Chemical Bacterial


19

management response Sourcing drinkable Chemical Bacterial


Industry SafetyProtecting the health of workers in the water industry

• Importance

• Despite industry initiatives to improve safety, accident rates in the Water industry are still higher than in other utilities


• Investment in safety by water companies will include growth in expenditure on PPE

• Winners

Some PPE companies such as Scott have

Ag, Farming & Fisheries

Water

Manufacturing

Construction

Utilities (exc. Water)

Mining2

3

4

5

6

Accid

en

t R

ate

per

100 E

mp

loyees

Accident Incidence Rates in Water Compared to Other Industries (USA), 2010

20

• Some PPE companies such as Scott have a dedicated product offering for the water industry

0

1

0 5,000 10,000 15,000

Accid

en

t R

ate

per

100 E

mp

loyees

Industry Employment (000's)

Source: BLS / Frost & Sullivan analysis

"Water Ahead 2007-2010" was a major occupational health and safety initiative for

the UK water industry

Environmental ManagementManaging the quality of the external environment from which our water is sourced

• Importance

• Managing the quality of the general environment that serves as our fresh-water resource (rivers, lakes etc.) is becoming of increasing importance


• Outbreaks of blue-green algae can be reduced by extracting phosphorous from waste water

"New found fame has escalated toxic blue-green algae from a naturally occurring phenomenon, to one of the nation's most critical water quality issues."

Source: Australian Institute of Natural Resources (2009)

"The threat posed by toxins from cyanobacteriato water supplies has increased world-wide during the past 30 years."

21

• Winners

• Companies developing technology to extract phosphorous e.g. Ostara

Source: WHO

Disaster ResponseManaging water in the environment in response to natural disasters

• Importance

• Climate change is leading to more violent rain storms; urbanisation is leading to more areas being prone to damage by these events; the outcome is more threat to health


• In 2004, the US EPA estimated it would cost $55 billion to correct combined sewer overflow problems in publicly 0.40

0.60

0.80

1.00

1.20

1.40

1.60

Factors Contributing to Increased Chances of Stormwater Hazards (World), 2010-2050

Percentage of world population living in urban areas (2010 = 1)

Frequency of major

22

sewer overflow problems in publicly owned wastewater treatment systems

• Winners

• PU foams can be used to manage rainwater run-off, reducing the risk of flash flooding

"Overflow [of raw sewage into nearby waterways during heavy rain] is a problem for nearly 770 cities in the U.S."

Source: U.S. Environmental Protection Agency

0.00

0.20

0.40

1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050

Frequency of major storms (2010 = 1)

Source: UN, USGCRP and Frost & Sullivan analysis

AvailabilityImproving availability of water in regions of scarcity

• Importance

• India and South Africa are forecast to be worst hit by the trend towards increasing water stress over the coming 15 years


• New research suggests that huge water aquifers exist under some of the world's most arid regions in north Africa, but opinion is divided on whether it would be sustainable to mine this resource

Estimated potential productivity of water aquifers (Africa), 2012

23

sustainable to mine this resource

• Water pipeline infrastructure will be critical to development, as potentially could alternative sources such as desalination

• Winners

• Borealis, through its continued commitment to its Water for the World programme

PotabilityImproving drinkability of water in regions with poor access

• Importance

• 12% of the world's population do not have access to improved sources of water, and 39% do not have access to sanitation facilities


• Innovative polymer fibre spinning technology has been key to the development of new water filtration technology being developed in South 100%

Access to Improved Sources of Water (Percentage of population), 2010

Target 10 of the Millennium Development Goals (MDGs) is to “halve by 2015 the proportion of people without sustainable access to safe drinking water and basic sanitation”.

World Health Organization

24

technology being developed in South Africa

• Winners

• Manufacturers of water treatment chemicals with access to developing markets through innovative local distributors e.g. Golden Stork in Ghana

0%

20%

40%

60%

80%

100%

Up to 100%

Up to 98%

Up to 95%

Up to 90%

Up to 75%

Source: WHO / Frost & Sullivan analysis

Chemical QualityMaintaining high standards of water quality in developed regions

• Importance

• The primary chemical hazard associated with water is lead from older water pipes. However, some people express concern about fluorides and chlorine in water too


• The risk from lead can be reduced in two ways: by treating potable water so that lead is less soluble in it , or by replacing the pipes with alternative materials

The US Reduction of Lead in Drinking Water Act, ratified in January 2011, comes into force in January 2014

"As other sources of exposure to lead are increasingly controlled, water attracts increasing attention."

25

the pipes with alternative materials

• Winners

• Companies supplying materials for use in lead-free water pipe systems, such as Solvay

• There is also potential to see chemistry in a positive way as a source of desirable additives in water, including fluorides, magnesium etc.

"Can calcium and magnesium in drinking water contribute to preventing disease?"

Source: WHO study, 2009

increasing attention."

Source: World Health Organisation

HealthMinimising the chances of disease outbreaks in normally safe water

• Importance

• Legionella outbreaks are generally as a result of poorly maintained water systems. However, the true magnitude of the problem is unknown since few countries have adequate diagnostic and surveillance systems in place.


• Chemicals form a primary line of defence against such outbreaks

1,000

2,000

3,000

4,000

To

tal N

um

ber

of

Incid

en

ces

Reported Cases of Legionella (US), 2000-2009

26

against such outbreaks

• Winners

• Suppliers of innovative biocides technologies to reduce the risk of legionella outbreaks e.g. Ashland

"Legionella bacteria occur naturally... [but] have only started to cause problems in the last 70 years or so, due to the way water is used and stored in the modern environment."

Source: Building Risk Management company publication

Source: Centers for Disease Control and Prevention

02000 2009

To

tal N

um

ber

of

Incid

en

ces

Poll QuestionWhich of these issues do you think will have the greatest impact on the chemicals & materials

used in water, up to 2020? Starting with the four Drinking Water issues...

Health & Wellness

Availability Quality

SourcingMaking

drinkable Chemical Bacterial

Drinking water

27

Sourcing drinkable Chemical Bacterial


Poll Question (cont…)Which of these issues do you think will have the greatest impact on the chemicals & materials

used in water, up to 2020? Environmental factors...

Health & Wellness

Industry risks External environment


Emergencyresponse

Environmental risks

28

management response


Conclusions

Hot TopicsCompanies use many terms to describe the trends they see

Clean water and healthy rivers and streams

Clean water is a core environmental priority

Well-being

Wohlfühlen

High quality indoor environment

Sustainable access to safe drinking water

Hygiene

Indoor Air QualityStorm water

damageSmart water management

30

Health

Safety

Security

Socialresponsibility

Quality of life

Bien-être

Human Development

Wohlfühlen

Healthy homes

Urban planning

Wetland conservation and human

health and well-being

Healthy, comfortable and productivity-encouraging indoor environments

RegionsGlobal Frost & Sullivan Coverage and Emerging Geographies

Central and Eastern Europe• CEE Municipal Water & Wastewater Treatment

Chemicals Market• CEE Industrial sludge Treatment chemicals Market

Western Europe• Europe Smart Water Metering Market• Western Europe Municipal Water &

Wastewater Treatment Chemicals Market

China, SEA & APAC• Chinese Industrial Water and Wastewater

North America• North American Industrial Water and Wastewater

Treatment Chemicals Markets• Global Strategic Analysis of the Membranes

Materials Market for UF & RO

31

• Chinese Industrial Water and Wastewater Treatment Chemicals Market

• Strategic Analysis of the Indian Water Treatment Chemicals Market

• Strategic Analysis of Australian Water Treatment Chemicals Market

Africa• Mapping Water Treatment Technologies Used in West and North Africa• Opportunities analysis in the Public Sector Water Infrastructure Market in

Sub Saharan Africa• Analysis of Opportunities in the Waste Water Treatment Chemicals Market

in the Mining Sector• Sub-Saharan Africa Mining and Oilfield Water Treatment Chemicals Market• South African Industrial Water and Wastewater Treatment Chemicals

Market

Latin America• Strategic Analysis of the Brazilian

Municipal Water & Wastewater Treatment Chemicals Market

• Mexican Industrial Water and Wastewater Treatment Chemicals Market

Source: Frost & Sullivan.

Materials Market for UF & RO• North American and European Antimicrobial

Coatings Markets for Healthy Buildings

ConvergenceHow these trends will increase cross-sector opportunities

Building technology companies

Water tech. providers

(components and EPC)

Construction companies Chemicals &

Materials

Prevention of floods in urban

environments can be a combination of

architectural design and material selection

Integrate both active (technology) and

passive (materials) solutions to building

comfort challenges such as ambient

light, temperature and air quality

32

Utilities companies

Building management

service providers

and EPC)Materials Companies

Specify building materials that make

buildings easier to maintain in a

healthy state

Chemical companies developing automated

systems for chlorine dioxide generation

Utilise waste water as a valuable

secondary resource for chemicals

such as phosphorousSource: Frost & Sullivan

Who should be involved?How companies can take advantage of the opportunities by involving the right people

Stakeholders

• Producing materials that enable low-carbon technologies can contribute to the Environmental image of a chemical company

• So too can the production of health & wellness solutions contribute to the Social Responsibility image

Low Carbon solutions

Health & Wellness

ENV. Image

S.R. Image

33

• The complex interplay between low-carbon and health & wellness solutions means that Environment and Social Responsibility officers must work closely together to ensure a balance

Leaders

• Ultimately, a decision to prioritise the development of solutions to Health & Wellness needs will come from the top of any organisation e.g. the CEO

Wellness solutions

S.R. Image

SummaryHealth & Wellness will be a critical driver of change, creating opportunities for chemical

companies, across the Construction & Utilities sector

The past ten years have seen a huge improvement in the energy efficiency of buildings

• Therefore contributing to a Low Carbon future

The next ten years will see the focus now move onto the health & wellness of the building occupants

The water industry will clearly see enormous investment over the coming 15 years

• This investment is itself prompted by the need to provide clean and safe drinking water to the world's population

However, the health & wellness consequences of the water industry

34

wellness of the building occupants consequences of the water industry are more diverse, and create many opportunities for the chemical industry

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For Additional Information

Jeannette Garcia

Corporate Communications


(1) 210 477- 8427

[email protected]

Brian Balmer

Industry Principal

Performance Materials

(44) 1865 398634

[email protected]

38

Leonidas Dokos

Research Manager


(44) 1865 398685

[email protected]

Mark Hicks

Sales Manager, North America


(1) 210 247 2490

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