Global demand for geofoam is skyrocketing, and that trend is poised to be around for the near future. A recent report from Global Market Insights (GMI), a global market research and strategy consulting firm headquartered in the United States, shows global demand will likely reach $1.1 billion by 2026. Data from Mordor Intelligence, a market intelligence and advisory firm located in India, supports that growth projection. Mordor expects the geofoam market to register a compound annual growth rate (CAGR) of more than 7.5% from 2020 to 2025.
It shouldn’t surprise anyone that demand is taking off — big time! Geofoam has many properties that are valued for construction projects. It’s an engineered product, so it behaves consistently and predictably. It’s super lightweight, but strong, with a high compressive strength of up to 60 psi. It’s an environmentally friendly, energy-efficient product that serves as great thermal insulation. It’s fast and easy to install, with no heavy, earth-moving equipment required. Plus, it’s water-resistant, durable and long-lasting. These properties, plus the fact that geofoam typically can help you bring your projects in on time or ahead of schedule. As an added bonus, you’ll likely enjoy project cost savings of up to 30%. For all these reasons, geofoam is becoming a very popular building material, here in the United States and elsewhere in the world.
Geofoam has been around since the 1930s, when it was developed in Germany by I.G. Farben. It debuted in the U.S. in the late 1980s. As more and more projects began to call for geofoam, architects, engineers and general contractors gained first-hand experience with the many benefits geofoam could add to their projects. Since then, it’s enjoyed steady market growth. But now, it’s really taking off.
SO, WHY’S THE GEOFOAMS MARKET EXPLODING?
What’s driving this surge in market demand now?
One reason is that geofoam can be used effectively in so many different applications. It can be used for road construction, stadium/theatre seating, bridge abutments, slope stabilization, building foundations, insulation, retaining walls, fill for underground utilities, landscaping for living roofs and golf courses and parks, plus much more.
Highway and road construction are leading the rising demand for geofoam. Geofoam is used extensively in road construction to fill voids, to stabilize slopes, to widen roads, build bridge abutments and to provide structural support over poor soils. And, road construction is booming internationally. The road and highway construction segment of the geofoam market is projected to grow at the highest CAGR in terms of both value and volume from 2019 to 2024, thanks to upcoming major infrastructure projects worldwide.
In the U.S., the use of geofoam for highway and road construction has been helped substantially by the support of the U.S. Federal Highway Administration (FHwA) and Transportation Research Board. The creation of guidelines and specs for using geofoam for this segment also gave a big boost to the use of geofoam, as did the FHwA’s theme: “Get in, get out, and stay out with EPS geofoam.”
Highway and road construction may be the biggest and most lucrative segment that’s driving the growth of the geofoam market — increasing development and expansion of infrastructure projects around the world is one of the key factors. But highway and road construction isn’t the only application where geofoam shines.
Geofoam has become the product of choice for many applications such as stadium seating platforms, airport runways and taxiways, rail embankments and underfill purposes. And, since geofoam provides excellent noise and vibration dampening, it is now being used for bridges, railway tracks, beneath refrigerated storage buildings and storage tanks to help prevent ground freezing, according to Transparency Market Research. Geofoam is also being used for large industrial pipes and as compressible inclusions in tunnels. And there are still many more uses for geofoam that have yet to be discovered. For all these reasons, the global geofoam market is now exploding.
INCREASE IN DEMAND SPIKED BY GLOBAL INVESTMENT
Here’s a snapshot look at the major, worldwide influx of investments in the construction sector, especially in the Asia-Pacific, Middle East and Africa regions. Chances are, geofoam will be used in many of these upcoming construction projects.
Currently, the global hot spot for the geofoam market is the Asia Pacific region, with China and India being the two biggest players. The Asia Pacific region captured more than 45% of the global market share in 2018 and is expected to remain the dominant market for geofoam heading into 2026, according to GMI. Residential and commercial construction is strong, and there’s a huge surge in public infrastructure projects.
China has several airport construction projects on the boards or in development, including Beijing Capital International Airport. The country also has ambitious plans to create a $900 billion “New Silk Road” connecting Europe, the Middle East, Africa and Asia by rebuilding the land and sea trade route that once flourished during the days of the Roman Empire. As for urban expansion, China is projected to build five megacities by 2025 that will house millions of people and businesses.
India is expected to be the third largest construction industry by 2026. The country is also planning several large-scale construction projects to meet its ever-growing needs. These all bode well for the geofoam industry. As far as infrastructure, India plans to complete 200,000 km (more than 124,000 miles) by 2022. It anticipates investing about $60 billion in its aviation market, building 100 airports before 2032. In residential and commercial construction, the country has targeted $120.5 billion to develop 27 industrial clusters. It is also slated tol build two megacities prior to 2025.
The geofoam market is also flourishing in the North America region (United States, Canada, Mexico, Greenland). In the U.S., the geofoam market is projected to grow to $1,069 million by 2024 (from $786 million in 2019), at a CAGR of 6.3% from 2019 to 2024. According to the Global Infrastructure Outlook of Oxford Economics, the United States will likely spend $8.5 trillion on infrastructure projects between 2016 and 2040. One high-ticket project is California’s High-Speed Railway Project. At a cost of $80.3 billion, and rising, it’s scheduled to be completed in 2029.
Infrastructure projects are also in the works for Mexico, which has ear-marked $25 billion toward those projects.
Other regions around the globe such as Europe and Latin America are also gearing up for construction projects that could foster a huge increase in demand for geofoam. The name of the game is infrastructure!
The Middle East has a goal of attracting additional tourism, so it’s increasing its investments in infrastructure development, with highways and airports being its main objective. Part of this flurry of infrastructure projects is the result of Qatar being selected as the location of the Fifa World Cup 2022.
The African Infrastructure Investment Managers (AIIM) raised $320 million for its infrastructure investment fund, which will support infrastructure projects all across Africa. One target sector is power, transport and midstream energy in Sub-Saharan Africa.
PREPARING FOR THE BOOM
So, the future looks good for the construction sector, and geofoam will definitely have a place at the table.
Spurred by the actual and anticipated future need for geofoam, the major geofoam producers are responding by increasing their production capacity, and even opening new manufacturing plants to meet the anticipated rising demand.
- On May 20, 2020