Polyurethane Dispersion Market By Type (Water Based Polyurethane Dispersion, Solvent Based Polyurethane Dispersion), By Application (Paints and Coatings, Adhesives and Sealants, Leather Finishing, Textile Finishing), By Region - Global Market Insights 2021 to 2031

Market Outlook for Polyurethane Dispersion

The global polyurethane dispersion (PUD) market is slated to expand at a CAGR of close to 8% over the next ten years. Leather finishing applications are projected to contribute the highest to market revenue US$ 1.2 Bn from 2021 to 2031.

Rise in adoption of polyurethane in leather and textile products owing to increasing demand for these products for use in daily life and from the fashion industry has significantly contributed towards market growth. In the last few years, increasing government regulations to ensure low VOC emissions are projected to drive demand for water-based polyurethane dispersion, especially waterborne polyurethane dispersions for textile coatings. Additionally, growing demand for polyurethane dispersion from textile industries in developing economies is being witnessed. However, high volatility rate in raw materials can hinder overall market growth to some extent.

Foremost objective of the report by Fact.MR on the polyurethane dispersion market is to pitch insights on the purchase growth scenario, demand generators, and development strategies in this space. The report provides a taxonomy elaborating on key segments. The report also outlines visionary insights on market dynamics, including the drivers, restraints, opportunities, trends, and pricing analysis, along with key success factors. Demand trends have been tracked in 20+ high-growth countries, pointing towards countries in East Asia, South Asia, and Latin America holding bulk of the market share.

Historical Trends Vs. Future Market Projections

Historically from 2016 to 2020, use of polyurethane dispersion increased at around 6.2% CAGR, and key factors assisting this growth were rising demand from interior and furniture industries, growth of the automotive sector, and rising consumption of leather products among consumers. Leather demand is mainly driven by the fashion & footwear industry, along with its use in luggage bags. Increasing purchasing power along with changing fashion trends have led to a rise in demand for leather products, consequently leading to high demand for PUD in the leather industry.

The market is forecasted to expand at a CAGR of close to 8% over the coming 10 years. Polyurethane dispersion possesses exceptional properties such as high tensile strength, extreme temperature durability, high elasticity, and high abrasion resistance that are especially required for coating in wood and leather finishes, PVC & concrete floor tops, and textile coatings. These factors will upsurge demand for polyurethane dispersion in the near future.

What are the Key Opportunities for Polyurethane Dispersion Manufacturers?

Imposition of stringent environmental regulations related to emissions by various authorities across the globe have opened wide opportunity for polyurethane dispersion providers. Use of solvents such as N-Methyl-2-pyrrolidone (NMP), N-Ethylpyrrolidone (NEP), and Dimethyl sulfoxide (DMSO) to manufacture dispersions increase volatile organic compound (VOC) emissions. Distillation cannot remove these solvents easily, thereby creating increased environmental burden.

To combat this, authorities in Europe and North America have banned the usage of solvent-based polyurethane, which has consequently led to rise in the demand for low-solvent polyurethane dispersions, and more so for solvent-free polyurethane dispersions. Continuous monitoring of VOCs from industries, including paints and coatings, leather, and textiles, by organizations such as Local Air Quality Regulators and Environmental Protection Agency (EPA) can be a significant opportunity for polyurethane dispersion manufacturers in these regions.

Regional Analysis

Which Region Offers Larger Opportunity for the Sales of Polyurethane Dispersion?

The market in Asia, including East Asia and South Asia, is expected to grow with a significant pace, owing to the rising automotive industry in countries such as China, Japan, South Korea, and India. Besides, the leather industry in Asian countries is also fertile, thus further adding opportunities for polyurethane dispersion manufacturers. In 2020, together, China and India accounted for more than 30% of global leather production.

In addition to this, low labour cost and manufacturing cost combined with various government-favouring policies in the region have been boosting the growth of end-use sectors. For instance, Make in India, an Indian government initiative to encourage the manufacturing sector in the country, can significantly pump foreign investments into the country, thus leading to more demand for several allied products, including polyurethane dispersion. East Asia is expected to offer absolute dollar opportunity of more than US$ 930 Mn from 2021 to 2031. Â

Category-wise Insights

Why Do Water-based Polyurethane Dispersions Hold Higher Market Share?

Water-based polyurethane dispersions are expected to capture a majority of the market revenue share owing to their versatile nature and environmental friendly coating materials that are employed in an extensive range of film hardness and solid content. They do not contain free isocyanate residuals, and deliver high-blocking resistance, weather resistance, long-term flexibility, UV resistance, and high abrasion resistance. This, in turn, is contributing in making water-based polyurethane dispersions as the fastest-growing segment over the coming years. The water-based polyurethane dispersion segment is expected to expand at around 8% CAGR over the projection period. Â

How Has COVID-19 Hindered the Sales of Polyurethane Dispersion?

All key end-use polyurethane dispersion applications, including paints and coatings, adhesives and sealants, leather and textile finishing, suffered decreased demand with the onset of COVID-19. This translated into low demand for polyurethane dispersion as well. In 2020, a year-on-year loss in demand of around 6% was observed in the market as compared to the previously projected growth. Demand for polyurethane dispersion is expected to rise considerably in 2021, though it is less likely to match 2019 growth levels.

Competitive Landscape

Majority of the companies discussed in the report have focused on expanding their manufacturing capabilities, more towards water-based polyurethane dispersion solutions. Some of the key developments are:

• In January 2020, BASF announced investment in its polyurethane dispersion business in Europe. This investment will increase the company’s water-based PUD manufacturing capacity by 30%.
• In February 2021, Covestro revealed its plans for a new production facility for polyurethane dispersion in Shanghai, China. The company has scheduled the completion of this plant by 2024. With this investment plan, Covestro has also outlined its belief that over the coming years, customers will rely on replacing solvent-based products with water-based solutions.    Â

Similarly, recent developments related to companies manufacturing polyurethane dispersion have been tracked by the team at Fact.MR, which are available in the full report.

Report Scope

Key Market Segments Covered

• By Component

  • Water-based Polyurethane Dispersion
  • Solvent-based Polyurethane Dispersion

• By Application

  • Polyurethane Dispersion in Paints and Coatings
  • Polyurethane Dispersion in Adhesives and Sealants
  • Polyurethane Dispersion in Leather Finishing
  • Polyurethane Dispersion in Textile Finishing
  • Others

• By Region

  • North America
  • Latin America
  • Europe
  • East Asia
  • South Asia
  • Oceania
  • MEA