The building insulation market - Spain

1.2 Global markets for insulation and insulating materials are growing strongly

Market size

According to Grand View Research, the global insulation market is estimated at ** billion in ****, and is expected to grow at an annual rate of *.*% between **** and ****.The insulation market is thus expected to grow steadily, reaching $*** billion by ****.

Insulation market sales World, ****-**** Source: ****

This growth is due in particular to the increase in sales of insulation materials ,from $** billion in **** to $** billion in ****, an increase of **% in * years. On an annual basis, this represents a significant CAGR of *%.

Insulation materials market size World, ****-****, in billions of USD Source: ****

This growth can be explained by that of the construction market, which, according to Expert Market Research, is set to grow at an annual rate of *.*% too, rising from **,*** to **,*** billion USD between **** and ****.

Market share by region

As far as insulation materials are concerned,Asia Pacific will have the largest market share in ****, at **%. Insulation is increasingly used to avoid wasting energy, a precious resource, and demand for insulation in renovation and refurbishment construction is on the rise.indeed, China and India are expected to build *** million homes over the period, while the Asian "Tigers" (***) already represent a $*** billion construction market, growing at *% a year. [***]

The North American ...

1.3 The Spanish market

Given the dilapidated state of Spain's housing stock, with only *% meeting insulation standards, there are no precise figures for this market in Spain. It is, however, booming, thanks in particular to the "Next generation" plan developed by the European Union, which provides substantial European funds to enable the Spanish government to finance an ambitious housing renovation policy.

To estimate the market, we proceeded as follows: "Projected number of homes undergoing insulation renovation per year" X "Price per square meter" X "Average square meter per home in Spain".

The projection of renovated homes per year is explained in section *.* of this study. The average size of dwellings in Spain is ***.*m*[***] The average price of renovation per square meter is (***): Low estimate: €* Mid-range estimate: **.* High estimate: €***

This gives us the following sales projections:

Sales trends for CNAE code "****": Other installations in building works. Spain, ****-****, billions of euros Source: ****

While the average estimate is *** million euros in ****, this figure is set to rise by **% to ***.*** million euros in ****. However, it is the years **** and **** that should mark a turning point for the industry. The acceleration of the housing renovation policy should generate sales in excess of one billion euros for the high ...

1.4 Imports and exports of raw materials

As the insulation business is carried out by local fitters, to analyze Spanish foreign trade we need to consider trade in raw materials. Here, we are interested in two product classifications produced by the United Nations:

"HS ****": Cellulose and its chemical derivatives. "HS ****: Slag wool, rock wool and similar mineral wools; exfoliated vermiculats, expanded clays, slag foam and similar expanded mineral materials; mixtures and articles of thermally insulating and soundproofing mineral materials.

The HS **** classification is interesting because it correspondsto materials used to insulate buildings. HS **** corresponds to cellulose, which can be used as a bio-sourced material for building insulation. It should be noted, however, that cellulose has other applications, such as the manufacture of corrugated cardboard and paper - see businesscoot study "The corrugated cardboard market".

As regards cellulose as a bio-sourced material, Spain has a large trade deficit. This country doesn't seem to be specialized in this type of production, so that by ****, Spain's trade deficit will amount to *** million dollars. Similarly, this deficit increased by **.**% between **** and ****.

Evolution of Spanish foreign trade code **** Spain, ****-****, $ million Source: ****

As can be seen from the chart below, Spain is at least **.**% dependent on its European partners (***) for its cellulose ...

2.1 The state of the Spanish real estate market

In ****, Spain's housing stock comprised **,***,*** homes and offices. Of these, buildings with more than ** apartments account for **.**% of the total Spanish housing stock. Buildings with * to * apartments account for **.**% of the total, and two-unit buildings for *.**%. Finally, office buildings are in the minority, with a share of *.**%.

Breakdown of housing types in Spain Spain, ****, in thousands Source: ****

In terms of housing type, multi-family dwellings account for **.**% of Spain's housing stock, while single-family dwellings represent **.**%. Demand for insulation will therefore be driven more by syndicates - comunidad de vecinos in Spanish.

Building/household breakdown Spain, ****, %, Spain, ****, %, Spain, ****, %, Spain, %, Spain, % Source: ****

However,Spain's housing stock is very aging and below insulation standards, representing a strong potential demand for the sector. In ****, only *% of housing was considered "efficient" in terms of consumption standards. In ****, therefore, no less than **% of homes would require insulation work.

Breakdown of housing types in Spain by energy quality Spain, ****, % Source: ****

Finally, the table below shows the energy quality of energy-certified homes in Spain, by Autonomous Community. Just under * million homes have been certified. On a national scale, **.**% of homes have been certified as E and **.**% as G. Of this sample, only *.**% are certified as A, B or C.

Autonomous ...

2.2 Government objectives

Spain is an ambitious country when it comes to environmental concerns and sustainable development issues. To improve its carbon footprint and reduce energy losses, Spain introduced the Real Decreto of **/****, confirming a medium-term strategy in these areas through the "Plan Nacional integrado de Energía y clima".

Targets for the thermal rehabilitation of buildings, and therefore their insulation, are detailed in"El programa de Rehabilitación Energética de Edificios" -PREE- invoked by the same Royal Decree. Below are the building rehabilitation targets for the period ****-****:

Housing rehabilitation targets by **** in Spain Spain, ****-****, number Source: ****

To achieve these objectives, the Spanish government provides grants to individuals wishing to carry out insulation work. This aid is financed in part by the Spanish government and the European Union through the Recovery and Resilience Mechanism (***) ****/*** of February **, ****. This aid amounts to *** million euros for the year ****, and is distributed as shown in the following table according to the Spanish Autonomous Communities. Any Spaniard who so requests may be entitled to between **% and **% of the cost of his or her work being subsidized. [***].

Source: ****

2.3 Household demand

The Covid-** pandemic in **** had already boosted Spanish demand for insulation. RTVE reports that by ****, the sector had grown by **% in Spain. This growth is explained by the fact that, by staying at home during the confinement, Spaniards were able to observe the consequences of good or bad insulation in their homes. Although **% of Spaniards are equipped with an air-conditioning unit, in particular to withstand high summer temperatures, this item does not seem to be in competition with good insulation, which would help maintain a cooler home temperature during the summer[***]

As far as the ecological considerations of Spaniards are concerned, a study carried out by Schneider Electric in **** shows that Spaniards are among the most aware of environmental issues, which is an interesting feature when studying consumer potential. In fact, **% of Spaniards believe that climate change will lead to an increase in their electricity bill. The reduction in energy consumption brought about by insulation can therefore be a marketing argument for the sector, especially as **% of Spaniards also consider it important to have a home with * CO* emissions .

Schneider Electric survey on Spanish energy awareness Spain, ****, "yes" in % Source: ****

Added to this is the fact that temperature in the home ...

3.1 Value chain

The building insulation sector brings together a large number of players. These players segment the market as follows:

While the manufacturing market is dominated by large international companies such as Saint-Gobain and Knauf, the market is segmented by the *** insulation installers in Spain.

3.2 Insulation by type of building, insulation item and material

The different insulation families

There are three main types of insulation: natural, mineral and synthetic. Natural or "bio-sourced" insulation is of plant or animal origin, so its main advantage is that it has no negative impact on the environment. However, while they contain fewer chemical ingredients than other insulation families, they are transformed by human hands and receive chemical treatment to protect them against fire or humidity, for example. The most widely used natural material for insulation is hemp wool, a ***% recyclable material. Another is cellulose wadding, produced from recycled newspapers. Many other materials can be added to the list: wood wool, sheep's wool, expanded cork, straw... Mineral insulation materials are the most widely used in Spanish homes. Although their origins are natural, they have undergone considerable processing by man to improve their efficiency, not least because most mineral materials do not tolerate water. These include glass wool and rock wool. Others include vermiculite, perlite and cellular glass. Synthetic insulating materials are derived from petroleum, and therefore have significant shortcomings when it comes to preserving the environment. While they offer significant thermal insulation performance, they remain fairly costly, and their price rises with oil and energy inflation. Polyurethane and polystyrene are ...

3.3 Sector development and geographical breakdown.

An analysis of CNAE code **.*, which covers "electrical, piping and other installations in building works", gives us an idea of the value of the sector, even though it includes activities other than those linked solely to building renovation.

The CNAE **.* code produced by the Instituto Nacional de Estadísticas covers the following activities:

Electrical cable installations Telecommunications cables Internet and cable TV networks Lighting systems Alarm systems Street lighting and signals Heating and air-conditioning systems Other building installations Elevators and escalators Automatic doors Vacuum cleaning systems Thermal and acoustic insulation.

Unfortunately, no detailed statistics are available for thermal and acoustic insulation alone. Nevertheless, a sectoral analysis of the latter shows an expansion in the number of total companies. They numbered **,*** in **** and, following an increase of *.**%, will have reached a total of **,*** by ****. The sector also proved resilient to the covid ** crisis in ****, with the total number of companies declining by * between **** and ****.

Number of companies in CNAE code: **.* Spain, ****-****, thousands of companies Source: ****

In terms of the total number of employees, there is an overall trend towards an increase in the number of people working in the sector. Between **** and ****, the overall workforce grew by **.**%, representing an average annual ...

4.1 Insulation types and prices

Insulation materials are made up of different materials, each with different insulation qualities. Insulating materials used in construction form a large family of diversified products. These products can be classified into * main groups:

Mineral wool insulation : glass wool, rock wool and cellular glass; Vacuum insulation : this is a new generation of insulating materials with good thermal performance and low thickness. This saves precious centimeters. They are designed for interior insulation; Plant wool insulation : cork, plant fiber, wood fiber, hemp, wood wool, absorbent cotton, flax wool or cellulose wadding; Animal wool insulation : duck feathers or sheep's wool; Thin insulation : PMR, etc. Consisting of one or more layers of aluminum foil or aluminized plastic film, thin reflective products include intermediate layers of various kinds: flexible foam, felt of animal, vegetable or synthetic origin, bubble polyethylene...; the number and nature of superimposed layers vary their advertised thermal performance; Polystyrene insulation (***): of organic origin, expanded polystyrene, extruded polystyrene and others.[***]

A **** European Commission study on the sector reveals in this table the characteristics of the main insulating materials. Glass wool appears to be the preferred material, while polyurethane seems to be to be avoided.

Characteristics of the main insulation materials

Source: ****

Installation prices for different ...

4.2 Different insulation techniques

There are several options for carrying out insulation work:

Source: ****

4.3 Average installation price

The average installation price in Spain ranges from €* to €*** per square meter. This average price is estimated by CronoShare on the basis of the quotes continually received on the platform. However, prices differ according to the installation technique used:

Average price range according to insulation technique used Spain, ****, €/square meter Source: ****

Below is a table summarizing average prices according to the type of materials used and the size of the surface area, produced by Habitissimo, which like CronoShare, estimates average prices based on quotes provided by customers on the platform.

Materials Price Surface Spray polyurethane foam ***€ Interior walls Insulation with cork panels * ***€ **m* bedroom Thermal insulation with rock wool * ***€ **m* roof Thermal insulation with cellulose * ***€ ***m* facade Thermal insulation with extruded polystyrene * ***€ ***m* windowsills with * cm thickness.

Source: ****

4.4 Thermal insulation in conjunction with home automation.

Home automation is a digitalized way of managing your home, which helps you save energy in particular. Linked to insulation, it enables heating or air conditioning to be switched on or off according to room temperature. In Spain, demand for this type of offer is very high. In addition to insulation, the installation of home automation systems could be a business opportunity for insulation companies, in a market that is set to grow by ***% between **** and ****, according to UCI, the French mortgage credit union.

Statistics on home automation Spain, ****, % of total Source: ****

The projected number of fully-equipped homes inSpain by **** is**%. Also, **% of Spaniards are interested in home automation, although **% also consider the cost of installing such a system to be high.

5.1 Insulation requirements

The technical requirements for insulation are explained in the "Documento Básico DB-HE Ahorro de Energía del Código Técnico de la Edificación (***)", in the section "DB-HE* Condiciones para el control de la demanda energética". They were created by the body known as CTE or Código tecnico de edificación. Insulation standards differ according to the climatic regions of Spain. The table below sets out these standards for thermal insulation in older buildings.

For new housing, these standards are also summarized in the table below:

Below is a map of Spain's climate zones.

Source: ****

6.1 Segmentation

• Isover Saint-Gobain
• Knauf
• Soprema Groupe
• Rockwool
• Dow Chemical
• Ursa France (Xella)
• Aísla y ahorra
• Aislacasa
• Impol Murcia
• AislaHome
• CIA ESPAÑOLA DE AISLAMIENTOS S.A