JAKARTA, Indonesia – Market research firm Frost & Sullivan predicts that the global chemicals market will grow at a CAGR of 4.6 percent from 2012-2015 with Asia as the fastest growing region in the world. Chemicals sales are expected to grow at a CAGR of approximately 7 percent from 2012-2015. The growth in the Asia chemicals market has largely been driven by China, which will surpass the United States as the largest chemicals producer.

"While the global growth slowed down in 2012, Asia's share of the chemical pie has increased to 52 percent of the global chemical market in 2012 from 32.8 percent in 2001," noted Amit Bajpayee, Consulting Director, Chemicals, Materials & Food, Asia Pacific, for Frost & Sullivan.

ASEAN is emerging as the next frontier for growth, commented Krithika Tyagarajan, Senior Director, Chemicals, Materials and Food Practice, Asia Pacific, for Frost & Sullivan. She further explained that growth in the global chemicals market will be driven by unique transformative forces called mega trends.

Frost & Sullivan identified numerous key mega trends that will shape the chemical industry globally, such as urbanization, globalization, social trends, energy trends, e-mobility, health and wellness, and sustainability.

Urbanization and connectivity will drive the growth of mega cities in Asia. This calls for chemical and material solutions that are founded on the twin principles of energy conservation and energy sufficiency. The demand for smart and sustainable infrastructure drives usage of chemicals that provide functionality as well as energy efficiency.

"Almost half of the global urban population in 2020 will be from Asia, and the maximum surge of urban population will be witnessed in China, India and Indonesia throughout until 2030," said Tyagarajan.

She noted that in 2015, over 175 million Indonesians will live in urban areas, and Jakarta is projected to contribute nearly $700 billion to Indonesia's gross domestic profit in the same period of time.

With its potential, Indonesia is set to gain market share as ASEAN is gaining importance in the globalization game.

On the other side, the need for food and nutrition ingredients to address health and wellness trend is also encouraging. The high costs of healthcare and lack of access to good-quality care in developing markets allows the chemical industry to step up and offer solutions to combat obesity and address cardiovascular health and weight-management health.

"Functional ingredients including omega 3 and weight-management ingredients are expected to show high growth. However, scientific evidence is key to this growth," said Tyagarajan.

Besides mega trends, the market growth in Asia will also open opportunity for players in the global chemicals industry, particularly those globalized companies that have a presence in Asia.

Indonesia is a large market waiting to be tapped. "The per capita consumption of most chemicals in Indonesia is much lower than the developed markets indicating a large untapped potential. The construction industry in Indonesia is a good example, which sees large investment in residential and infrastructure projects. Construction chemicals, such as concrete ad mixtures, paints and coatings as well as protective coatings, are expected to grow," Bajpayee concluded. Besides construction chemicals, other areas that are promising include agrichemicals, oilfield chemicals, palm oil-based oleochemicals and food ingredients.