A strong rise in infrastructure developments in South Africa and Kenya, particularly in low-cost housing and roads, is boosting demand for thermoset resins in both African countries. Significant government investment is driving growth in the paints and coatings, construction chemicals and composites markets, which in turn is lifting demand for thermoset resins, says a new report from Frost & Sullivan (London / UK; www.chemical.frost.com) entitled “Analysis of the thermoset resins market in South Africa and Kenya”.

The thermoset resins market in South Africa and Kenya is forecast to grow by an average of 3.9% per year to USD 339.4m (EUR 246.5m) in 2017, from USD 280.8m in 2012. South Africa accounted for 97.5% of 2012 sales and Kenya for the remaining 2.5%.

The South African market for thermoset resins is forecast to grow at an average of 3.9% as the market is more mature than in Kenya, where growth is forecast at 5.9% per year between 2012 and 2017. "Although South Africa's economic growth has slowed, a USD 360 bn government infrastructural development plan is likely to keep its thermoset resins market afloat till 2030," says Dilshaad Booley, Frost & Sullivan chemicals, materials and food industry analyst. "The growth rate in Kenya is expected to be much higher, as the country is sorely lacking in modern infrastructure and is aggressively pursuing its development goals in line with its vision of becoming a middle-income nation by 2030."

South Africa has the resources to supply almost 90% of its thermoset resins demand domestically. Its local refineries are the most efficient in Africa, with an average capacity utilisation rate of 85%. Although this insulates the market from import price fluctuations, the country's escalating production costs are exposing it to competition from cheap imports, Frost & Sullivan says. In particular, the thermoset resins industry is threatened by imports from China, “which is able to manufacture and trade products at lower costs due to economies of scale, lower labour costs and preferential trade tariffs", says Booley.

Kenya imports almost all its thermoset resins and is vulnerable to constant currency volatility and high transport costs due to poor rail and road conditions. "Rail transport is performing at 10% of its capacity due to the deterioration of infrastructure and operational inefficiency in Kenya, resulting in higher thermoset resins prices," Booley adds.

The largest thermoset resins suppliers in South Africa are NCS Resins, Arkema, Scott Bader, KZN Resins, SI Group and ADD Group, while in Kenya the largest suppliers are Sika, Henkel, Adhesive Solutions Africa and Polkerm.