Exploring the Key Drivers of Growth in the Global Formulation Additives Market

The global formulation additives market is observing significant growth driven by changing consumer preferences along with rising technological advancements.  The formulation additives are materials that are used in small quantities in the compounds to increase the material properties such as adhesives, paints, and coating s and pharmaceuticals, which are essential for improving the material performance and stability utilized on diver sectors. With the industries globally working towards meeting the increasing high-quality expectations of consumers, along with sustainability and cost-effective products, the requirement for formulation additives is predicted to witness a progressive rise. Below are the key drivers which is shaping the trajectory for growth in the global formulation additives market in the coming years,

• Rising Demand from End-Use Industries

The primary driver in this market is the growing demand for diverse industries, especially construction, automotives, paints and coatings, and electronics. These industries depend extensively on these additives for increasing the performance and longevity of their products. The rise in the construction sector with the rise in infrastructure activity is leading to an increase in architectural coating and building materials for improvement of the dispersing properties and foam control. This is needed for improving the pigment dispensing and enhancing the durability of the building materials, which is inclusive of the cement, concrete, and coatings.

For instance, as per the IBEF report, the Indian government’s interim budget for 2024-25 stated an investment of US$133.86 billion for infrastructure development, which is a rise of 11.1% from the previous budget allocation. Moreover, the National Infrastructure Pipeline (NIP) initiative project reported that about 2,476 projects are under the development phase with an investment of US$1.9 trillion. These infrastructure projects will contribute to a rise in the requirement of additives, which can enhance the durability, workability, and performance of the products used, contributing to the market expansion.

Similarly, as per the United States Census Bureau report, the monthly construction spending by the country was valued at US$2,179.9 billion in January 2025, which witnessed an increase to account for US$2,195.8 billion in February 2024.

Rise in Monthly Construction Spending in the United States, in US$ Billion, in January 2025 and February 2025

Source: US Census Bureau

In addition, the increase in the automotive industry led to a rise in demand for these additives as they are used in the automotive application for coatings for properties like enhancing the durability and aesthetic of vehicles. As per the latest OICA data on the production statistics stated that global production of vehicles was accounted for 93.55 million in 2023, which was a rise from 85.02 million in 2022.

• Rapid Industrialization and Urbanization in Emerging Economies

The rise in industrialization along with urbanization in emerging nations is a major driver in the growth of the global formulation additives market. Emerging regions like Asia-Pacific, South America, and countries of the Middle East and Africa are witnessing an increase in population with urbanization, which will lead to a rise in urban development, positively contributing to market growth.

The urban population, as per the World Bank was accounted for 62% of the total population in East Asia & the Pacific, which increased to the value of 63% of the total population in 2023. Additionally,  according to UN-Habitat data, stated that by 2050, around 54 percent of the total urban population will be in the Asia Pacific, which exceeds 2.2 billion individuals living in urban areas. This shift in urbanization also contributes to an increase in demand for consumer goods like electronics and furniture, which will lead to growth in the requirement of formulation additives to enhance the quality and performance standard for the materials used in these industries.

Increase in % of Urban population from total population in East Asia & Pacific in 2022 and 2023

Source: World Bank

• Technological Advancements and Innovation

The rise in technological advancement with continuous investment in the development of new and innovative formulation additives is boosting the growth of the global formulation additives market. This is needed to offer increased dispersion and durability with enhanced physical properties as industries are looking for high-performance materials. In the paint and coating industry, the advancement in the rheology modifiers and defoamers to enhance the stability along with increasing the product quality and aesthetic finish of the coating is leading to manufacturers developing products that align with the safety and environmental regulations globally. For instance, in February 2025, Arxada announced the launch of the Polyboost, which is a multifunctional additive developed to improve the properties of paint and coating. The additive is developed with meeting the safety and environmental standards and works in enhancing the pH and stability of viscosity in paint formulation. It also offers decreased preservative use rates, which work to eliminate an H317 hazard level.

• Growing Emphasis on Sustainability and Eco-Friendly Solutions

The growing sustainability and eco-friendly product demand across the sector is rising, leading to the development of sustainable formulation additives. The growing stringent environmental regulations across the region where governments are encouraging the utilization of bio-based material is leading the increase in demand for clean-label additives. The changing preference of consumers is demanding for environmentally friendly products that decrease ecological impact, which is driving the growth of eco-friendly additives, leading to manufacturers designing the products as per industrial necessity. For instance, in March 2025, Evonik Coating Additives introduced the enhanced additive product portfolios, namely, TEGO Wet 270 eCO and TEGO Foamex 812 eCO, with a focus on providing high performance along with a decreased carbon footprint to offer sustainable coating solutions. These additives are produced with the utilization of bio-attributed materials that are ISCC certified, which offers traceability and sustainable procuring. They can be employed as wetting and defoaming additives in diverse ink and coating applications.

Similarly, in April 2025, BASF announced the launch of biodegradable dispersant Sokalan CP 301 for the agrochemical industry. The dispersants are crucial additives used in agriculture formulation for ensuring active ingredient uniform distribution with enhanced stability.  This is developed as part of environmental regulation such as the EU Green Deal with a focus to boost safer and increase sustainable chemicals in the environment.

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