Precipitated Silica Market to Witness Steady Growth in BRICS Owing to Demand from Automotive and Consumer Electronics Market

Precipitated silica is one of the purest forms of silica. It is produced through the process of precipitation that involves mixing solutions of sodium silicate with sulphuric acid in water. The notable properties of precipitated silica include high water/oil absorption and high durability. Precipitated silica is widely used across several industries, including rubber, electronics, pharmaceuticals, manufacturing, cosmetics, and agriculture.

An Introduction to the Precipitated Silica Market

Precipitated silica, along with fumed silica, silica sol, and silica gel, is a part of the global speciality silica market. This market is expected to exhibit positive single-digit growth through 2018 and reach a valuation of US$ 7 Bn by 2018. Precipitated silica market, which accounts for around 70% of the global speciality silica market, is also expected to witness steady growth in the next three years. Growth in automotive market in China and South Africa, and the increased demand for consumer electronics, and personal care and cosmetics market will contribute to the demand for precipitated silica in BRICS. Slowing automotive sales in Brazil and Russia will pose a challenge to the growth of precipitated silica market in BRICS. A turnaround in India’s sluggish automotive sector could provide key growth opportunities for precipitated silica in BRICS.

Precipitated Silica: Market Segmentation

On the basis of application, the precipitated silica market is segmented into rubber, plastic, packaging, cosmetics, and adhesives. Precipitated silica is used as a reinforcement agent for making rubber articles, such as tyres, treads, rubber-soled footwear, rollers, and hoses. It is also used in natural and synthetic adhesives, as it provides abrasion and tear resistance. Precipitated silica finds its use in personal care and cosmetics products as an anti-caking agent.

Rubber is the segment that drives the demand for precipitated silica in BRICS. This is due to the fact that China and India have the highest consumption of rubber in the world. Precipitated silica’s use in making chemicals that are used in personal care and cosmetics products is another dominant segment that drives its growth. On the basis of end-use industries, the precipitated silica market is segmented into automobiles, electronics, and agriculture among others. Consumer electronics will be the fastest growing industry for precipitated silica in the next 3 years in BRICS.

Key Drivers & Challenges for Precipitated Silica Market in BRICS

Automotive Market is a Key Influencer of Demand

BRICS has emerged as a sunrise market for the automotive sector, as the traditional markets, including the US, Europe, and Canada, have reached a saturation point. The BRICS automotive market is expected to account for around 30%-40% of the total world auto sales in the next three years; however, this growth will mainly be concentrated in China, South Africa, and India. Russia’s automotive industry is reeling under the impact of sanctions that have been imposed due to the Ukraine crisis, whereas Brazil’s weak macroeconomic environment has led to a decline in its automotive market. China’s dominant role in the BRICS automotive market, along with a positive outlook in South African and Indian automotive market is expected to compensate for the low demand for precipitated silica from Russian and Brazilian markets.

How the Electronics Market Determines Growth

The electronics market in BRICS has been surging on account of increased income-levels and easy access to credit. The high demand for electronics, especially consumer electronics, including mobile phones, television sets, digital cameras and camcorders, laptops, and gaming consoles has played an important role in the growth of electronics market in BRICS. The consumer electronics market is expected to exhibit a double-digit CAGR through 2018, and this will push the demand for precipitated silica in BRICS.

What Role Will the Demand for Personal Care and Cosmetics Play?

The growth of personal care and cosmetics market in BRICS is expected to be another key driver for the precipitated silica market. The BRICS nations account for around 30% of the total global personal care and cosmetics market currently, and it is expected that the market will continue to grow in the next three years. This growth is expected to augur well for the prospects of precipitated silica in BRICS.

Precipitated Silica Market: Country-Wise Drivers and Challenges

Brazil

Brazil’s precipitated silica market has been growing at a steady rate and the trend is expected to continue in the next three years. Although Brazil’s automotive market is going through a slow phase, the demand from consumer electronics, and personal care and cosmetics market is expected to fuel the demand for precipitated silica. Consumer electronics market will expand at a steady rate in Brazil on account of a staggering demand for smartphones and tablets. The consistent growth in this market will push the demand for precipitated silica in Brazil. Furthermore, Brazil’s personal care and cosmetics market is expected to exhibit a double-digit growth through 2018, thereby providing a boost to the precipitated silica market. On the other hand, slow growth in Brazil’s automotive market can be a key challenge for the demand of precipitated silica.

Russia

The slowdown in the Russian automotive and consumer electronics market is expected to affect the growth of precipitated silica market.The progressive growth of consumer electronics market hit a roadblock in 2014 due to the devaluation of the rouble and decrease in consumer spending, and this could reduce the demand for precipitated silica in the country. However, the Russian personal care and cosmetics market has exhibited a double-digit CAGR in the last two years, and the market is expected to grow at a brisk rate in the next three years as well on account of demand for premium beauty products and expansion of retail chains across the country. The demand from the personal care and cosmetics market will be the key driver for the precipitated silica market in Russia.

India

Like other BRICS nations, the growth prospects of precipitated silica market will depend on the demand from automotive, consumer electronics, and cosmetics and personal care market in India as well. The Indian automotive market has been on a downslide in the last two years, but it is anticipated that interest-rate reductions and possible incentives in the upcoming annual budget will reinvigorate the market. The Indian consumer electronics market is expected to expand at a high single-digit CAGR through 2018 on account of demand for affordable smartphones and gadgets, and mushrooming online retailers. These factors are expected to increase the demand for precipitated silica in the country. The personal care and cosmetics market is also expected to exhibit single-digit CAGR through 2018 due to increasing disposable incomes and growing awareness about the importance of personal hygiene. This is expected to provide a fillip to the precipitated silica market in the country.

China

China’s automotive market is expected to exhibit a strong single-digit CAGR in the next three years on account of increasing demand for sedans and sports utility vehicles (SUVs). This positive outlook of the Chinese automotive market is expected to be the key driver for the growth of precipitated silica in the country. China, along with US, is the world’s largest market for consumer electronics and it is expected that the market will continue to witness a strong growth in the next three years. The increasing demand for mobile phones, home appliances, and computer peripherals will drive the consumer electronics market in China, which in turn will boost the demand for precipitated silica. Furthermore, the personal care and cosmetics market is expected to exhibit a steady CAGR through 2018 due to the emergence of a sizable base of consumers with significant purchasing power. The growth in this market will augur well for the demand for precipitated silica in the next three years.

South Africa

The South African automotive market is expected to exhibit moderate growth in the next three years. The country’s automotive market has grown in spite of sluggish overall economic growth and automotive sales are projected to be positive through 2018. This moderate growth is expected to increase the demand for precipitated silica in the country. South Africa’s consumer electronics market is likely to grow at a steady rate on account of robust demand for affordable smartphones and televisions. Furthermore, the growing awareness among South African consumers and innovative marketing strategies by global brands are the key drivers for growth of cosmetics and personal care market in South Africa. These trends are expected to boost the demand for precipitated silica in South Africa.

Akzo Nobel NV, Madhu Silica Pvt. Ltd, Rhodia, Evonik Industries, Bayer AG, Supersil Chemicals (I) Pvt. Ltd, Nalco Holding Company, Multisorb Technologies Inc, Huber (JM) Corporation are among the major players in the precipitated silica market in BRICS.

Strong automotive sales in China and South Africa will provide an impetus to the precipitated silica market. However, the decline in the automotive market in Brazil and Russia can curtail the demand for precipitated silica. A resurgence in India’s automotive market could provide a crucial impetus to the demand for precipitated silica. The growth of consumer electronics market, and personal care and cosmetics market in most of the BRICS nations will further fuel the demand for precipitated silica. On the basis of all the key drivers, challenges, and opportunities, it is expected that the precipitated silica market will exhibit steady growth through 2018.