Revenue forecast

The revenue estimate for the base year 2023 is $16.38 billion, with a CAGR of 7.7% for the study period 2022–2030

The Impact of the Top 3 Strategic Imperatives on the Continuous Insulation Industry

Transformative MegaTrends

• WHY
  • Decarbonization is an omnipresent idea in all building materials manufacturers worldwide.
  • However, not all building codes are in the same maturity stage, which impacts the demand for continuous insulation products.
• Frost Perspective
  • Decarbonization is a transition. The building industry is not homogeneous, and while exterior insulation and finish systems (EIFS) manufacturers seem to be moving ahead of regulations, changing from established building systems to more thermal efficient ones is a slow process for the rest of the supply chain and some customer segments.

Competitive Intensity

• WHY
  • In the continuous insulation industry, competition is not between the material producers but primarily between the building and cladding systems, which cascades to the material companies as a consequence.
  • This scenario is embedded into a market that moves slowly as building codes, engineers, architects, contractors, builders, and homeowners traverse their own learning curves.
• Frost Perspective
  • The competitive scenario varies by region and country.
  • For instance, EIFS is strong in the Nordic residential segment but weak in the United States, where its main segment is nonresidential. Structural insulated panels (SIPs) represent less than 2% of new houses in the United States but are growing.
  • Local conditions, including the competitive environment, regulations, and customer interest, are critical to understanding the dynamics of these products.

Disruptive Technologies

• WHY
  • Continuous insulation, expanded polystyrene (EPS) panels, and steel framing (the last not discussed in this report)—among other products—are entering new markets in different parts of the world, according to local codes, needs, and even individual initiatives.
  • These new technologies disrupt the local business ecosystem and evolve according to market conditions.
  • Such disruption takes shape when architects do not know how to design for these products or when the workforce is not updated on how to build with them.
• Frost Perspective
  • As markets mature and energy efficiency-driven regulations gain prominence, these insulation and efficiency-oriented building systems will slowly gain market share, provided they can deliver long-term performance and cost competitiveness.

Scope of Analysis

• Continuous insulation, as considered for this report, comprises mainly 2 product types:

• EIFS, which go under different names according to the region and languages (For the sake of this study, we will also use EIFS to mean External Thermal Insulation Composite System [ETICS] as these are known in Europe; External Wall Insulation Systems [EWIS]; insulated render, and Sistemas de Aislación Térmica Exterior [SATE] as these are known in Spanish; as well as any other name that these systems might receive in other parts of the world in different languages.)
• SIP: Sandwich-like panels, made typically of 2 external layers of oriented strand board (OSB), glued to a layer of insulation material (typically EPS) in the middle

This study does not include other structural panels, such as those made with precast concrete.

EIFS compete against other cladding systems (e.g., stucco, fiber cement, bricks, vinyl), while SIPs compete against other building systems (e.g., brick and mortar, steel frame, wood frame, modular).

The following slides show the supply chains for each product.

• Customers purchase EIFS as separate components, and contractors apply them on-site.
• SIP dimensions and depths are mostly standardized, but their length and height are typically changed to fit the project’s needs. The project is also designed based on a modulus—the SIP width—so waste is minimal.
• Growth in these products’ markets positively impacts demand for insulation, coatings, OSB, and other composing materials.
• Frost & Sullivan calculated revenue at the distributor level.

Scope

Segmentation by Product

Continuous Insulation

EIFS

• As the name describes, EIFS are exterior insulation systems. As a "system," companies come to the market with proprietary components that, together, compose the system.
• If some materials are replaced, eliminated, or changed, the EIFS implementation might not comply with local codes, and/or the manufacturer may not guarantee the installation. These compliance considerations may also reach the installers.
• From the substrate to the exterior, a typical EIFS includes adhesive, insulation, a glass fiber mesh embedded into a base coat, and finishing coats.
• Implementing EIFS in any house, high-rise, or commercial building is possible.
• Depending on building codes and manufacturers, the system might include a water barrier (liquid or adhered) over the substrate and/or a water-resistant coat on the insulation layer.
• Although end customers may purchase the materials separately, doing so might hinder the system's overall performance.

SIP

• SIPs are panels of 2 layers of structural board (OSB) glued together with a rigid foam insulation core, usually EPS or PU foam. The resulting composite material has structural capacity.
• In many cases, SIPs are also used for roofs.
• Typically, SIPs are cut to shape in a shop, moved to the building site, and finished internally with plasterboard and externally with plastic wrapping and a cladding system.
• SIPs are used to produce insulated building envelopes, mainly in residential and light commercial construction.
• Their use aims to increase energy efficiency and save heating and cooling costs.

Segmentation by Application

EIFS

Retrofits

Retrofitting involves installing EIFS in existing buildings to improve the thermal efficiency of their envelopes. These enhance habitability and extend the use life of the asset.

Retrofitting also involves upgrading heating, ventilation, and air conditioning (HVAC); lights; appliances; and temperature management systems (e.g., thermostats). These strategies aim to reduce energy consumption, carbon emissions, and resource intensity.

• New Buildings

• EIFS installed in a new construction

• Expansions

• SIPs used to add more area to a house or building

• New Buildings

• SIPs used in new constructions

Competitive Environment

Companies to Watch

DuRock

DuRock is a family-owned and operated Canadian coatings manufacturer specializing in EIFS.

PUCCS’ unique geometrically-defined drainage cavity was patented in 2004 and evaluated for code compliance in 2005.

PUCCS was the first EIFS in Canada to meet the drainage test requirement for wood sheathing, enabling EIFS to flourish in low-rise residential construction nationwide.

DuRock’s latest innovation is its patented PUCCS NC, a non-combustible rain screen EIFS with continuous mineral wool insulation.

PUCCS NC is Canada’s only non-combustible EIFS with a liquid-applied water-resistive barrier that has undergone evaluation for code compliance.

Mapei

Mapei is a global company with a presence in 57 countries and a history of over 85 years. It has 90 production plants in 35 countries on 5 continents. The company reported $4.3 billion in revenue globally for 2022.

Mapei has a broad portfolio (7,000+ products of professional construction chemicals in permanent offer) composed of tile adhesives, grouts, sealants, admixtures, additives, primers, emulsions, activators, membranes, accessories, and tools for an extensive range of implementations.

The company’s EIFS solution is called Mapetherm®. The marketed packages are for use with different insulation materials such as mineral wool, EPS, extruded polystyrene foam (XPS), PU, and polyisocyanurate (PIR) (which are not produced by the company), and to implement these as the finishing material.

Sto

Sto is a global company with a presence in 23 countries worldwide.

Its portfolio includes coatings, claddings, renovation and protection products, EIFS, and rear-ventilated systems for facades; as well as plasters, flooring, ceiling, insulation, and acoustic systems for interiors.

Other product categories include varnishes, glazes, and other products to repair and protect concrete.

Stotherm is the name of Sto’s EIFS package. It combines Sto’s diversity of materials options for insulation, renders, and finishing materials, according to the project requirements and product availability.

Wacker

• Wacker is one of the most relevant chemical companies in the world. As the company states, around 65% of its portfolio is composed of silicon-based products, and ethylene and acetic acid take most of the rest.
• It has 16,400 employees and recorded $6.9 billion in revenue in 2023.
• When it comes to EIFS, Wacker offers Vinnapas, its line of polymer dispersible powders—1 and 2-component—for adhesives and base coats; and Silres, silicone resins to produce paints with low water absorption and high water vapor permeability.

Weber

• Saint Gobain's Weber is a global company with a portfolio covering sealants; mortars; products for concrete; and products and systems for waterproofing, flooring, tiling, and facades.
• For EIFS, the company offers standard systems and other options oriented to acoustic comfort, ceramic tiling as the finishing surface, cork insulation, and high-durability materials under the Webertherm brand.
• Frost & Sullivan highlights the Webertherm Circle due to its circular approach. The company markets it as removable and recyclable.