Market Trends of India Acetic Acid Industry
Vinyl Acetate Monomer to Dominate the Market
- Vinyl Acetate Monomer (VAM) is a colorless, volatile, flammable organic liquid widely used as an industrial intermediate for producing homopolymers and copolymers critical for various applications. The vinyl acetate monomer is commercially synthesized by the liquid-phase acetylation of acetic acid with oxygen and ethylene.
- Vinyl Acetate Monomer (VAM) is a highly preferred material in hot melt adhesives owing to its bonding ability with a broad range of substrates and stability at a wide temperature range. Other important uses of EVA include hoses and tubes, medical packaging, and encapsulation in photovoltaic modules. VAM is used as a precursor for producing ethylene vinyl acetate (EVA) on co-polymerization with ethylene. EVA resin has good crack and puncture resistance properties and is used in sealants, coatings, and adhesive production.
- Over the past few years, the VAM industry has emerged as a highly viable investment avenue, attracting numerous financial backers due to its escalating use as a chemical intermediate. The end products of vinyl acetate monomers such as PVA, PVOH, and EVA are used in formulations of laminate films, adhesives, paints, cosmetics, and lacquers.
- In India, the demand for paints and coatings has increased in the construction and automotive industries since 2021. Thus several companies are planning to increase the production capacities of paints and coatings in the country. For instance, in 2022, Aditya Birla Group announced an investment of INR 100 billion (~USD 1.21 billion) to expand its paints business in India.
- Furthurmore, the export value of paints and allied products in India is registered at INR 22.96 billion (~USD 278 million) compared to INR 17.43 billion (~USD 211 million) in 2021 at a growth rate of 31.7%. Thus, the growth in the paints and coatings business is excepted to drive the current studied market in the country.
- Thus, the vinyl acetate monomer is expected to dominate the market demand for acetic acid during the forecast period.
Understand The Key Trends Shaping This Market
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Adhesives, Paints, and Coatings Segment to Dominate The Market
- Acetic acid finds application in the production of ethyl acetate, a solvent commonly used in coatings. Ethyl acetate is a suitable solvent for many resins, including cellulose acetate, nitrocellulose, and polyester. Acetic acid also helps to stabilize the pH of the coating, preventing the formation of bubbles or blisters.
- Acetic acid can act as an emulsifier in paint and coating formulations. It helps to disperse pigments and other solids in the formulation, making it easier to apply and improving the quality of the finish.
- In India, the demand for paints and coatings is mainly increasing from the automotive and construction industries. The Indian government is actively boosting residential construction, aiming to provide homes to about 1.3 billion people. The country will likely witness around USD 1.3 trillion of investment in housing over the next six to seven years. It is likely to witness the construction of 60 million new homes in the country.
- Furthermore, the availability of affordable housing in the country is expected to rise by around 70% by 2024. Also, by 2030, more than 40% of the population is expected to live in Urban India (34% in 2022), creating a demand for 25 million additional mid-end and affordable homes. Thus, the increasing construction activities will likely drive the paint and coatings market.
- India has become the fourth largest automotive vehicle manufacturer in the world. According to OICA, the total production volume of automotive vehicles reached 5.45 million units in 2022, indicating a growth of 24% as compared to 4.39 million units registered in 2021. Increasing automotive vehicle production will drive the country's automotive coatings market.
- Thus, the above-mentioned factors are excepted to drive the market for acetic acid in the country.
