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The global cross laminated timber market size was USD 756.9 Million in 2019 and is projected to reach USD 2,062.2 Million by 2027, exhibiting a CAGR of 13.7% during the forecast period.
Cross laminated timber, also called as XLam or CLT, is a prefabricated engineered wood lumber product consisting of at least three layers of solid-sawn lumber or structural composite lumber. The layers are placed such that the adjacent layers are cross-oriented and are bonded with an adhesive or a mechanical fastening to form a solid wood element. CLT was developed in the Alpine countries of Europe in the early 1990s and is now a well-established building material. The product is widely used across Europe, and is gaining popularity in several countries across North America and Asia Pacific. It is primarily used in the construction of prefabricated buildings or to construct buildings on-site in a small amount of time.
CLT has advantages such as design flexibility and good seismic performance. It also shows good acoustic and thermal insulation performance along with being an environmentally sustainable material. These factors have led to the adoption of CLT in the construction of many buildings in Europe and North America.
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Substitution of Conventional Alpine Wood with Soft and Temperate Wood Species and Non-Timber Alternatives
Traditionally, this type of timber was manufactured using local raw material, hardwood from coniferous trees, available in the alpine region. But, with increasing popularity in other parts of the world, companies are experimenting with soft and temperate wood species for the manufacture of CLT. In North America, especially, softwood is available in plenty and thus substitution of conventional hardwood is inevitable in the region. China, on the other hand, is researching the usage of bamboo in the alternate layers to increase the share of the local raw material utilized in the product. Such product developments may lead to improved performance of the material and are projected to increase the adoption of CLT over conventional construction material in these regions.
Demand for Environment-friendly Construction Materials Will Aid Growth
The demand for environmentally sustainable construction materials is on the rise with increasing consumer awareness regarding damages caused to the environment during the manufacturing process of cement and bricks. Thus, consumers and technicians are shifting their focus on the usage of sustainable materials such as wood in the commercial construction of buildings and other infrastructure. As CLT is manufactured using wood, governments across numerous countries also support its usage in construction and provide monetary and space-liberty benefits to the user. Furthermore, it also shows better thermal and acoustic insulation as compared to conventional construction materials and thus reduces the usage of detrimental materials such as glass wool and foamed plastics for building insulation. Thus, the environmental benefits provided by CLT has been a vital reason for its adoption in the construction industry.
Growth in the Construction Industry to Have a Positive Impact on the Market
The construction industry, especially in Asia Pacific and Latin America, is expected to show considerable growth in the near future owing to large scale investments planned by governments of India, China, Brazil, and Pacific countries. Despite being numbed by the occurrence of pandemic COVID-19, the growth in construction industry is expected to translate into the growth of the market. This is due to the increasing demand for sustainable building materials from governments and construction for developing infrastructures within the WHO standards for CO2 emissions. In addition to this, wood is a known carbon sequester, its usage in construction is expected to expand, thus driving the growth of wood products including mass timber materials such as XLam.
Mediocre Fire and Moisture Resistance is Impeding Product Adoption
Cross laminated timber, being a wood-based material, has similar disadvantages such as mediocre performance against fire and moisture. While many companies claim that CLT can burn up to 2 hours in case of fire, showing good fire-proof capability, it doesn’t match the performance of conventional building materials. Furthermore, it is susceptible to damage caused by moisture. Accumulation of water in walls may lead to the formation of mold and bacteria, which may prove to be detrimental to the infrastructure. Thus, these factors will restrain the market growth.
Adhesive Bonded Segment to Hold Largest Share in the Market throughout the Forecast Period
Based on bonding technology, the market is classified into adhesive bonded, and mechanically fastened. The strength of CLT is dependent on how strong the adjacent layers are attached. As adhesives provide higher bond strength and are less affected by environmental conditions as compared to the mechanical fasteners, adhesive bonded CLT is utilized on a large scale in the market. Another reason behind the dominance of adhesive bonded segment in this market is that cost of adhesives is significantly lower than the mechanical fasteners which lower the cost of manufacture of adhesive bonded CLT as compared to mechanically fastened CLT.
Despite all the aforementioned disadvantages, the mechanically fastened segment is gaining market share owing to environmental concerns regarding the usage of adhesives, that are manufactured using petrochemicals and other harmful materials. Furthermore, mechanically fastened CLT is easier to be customized, which provides a novel pathway for its growth in the global market.
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Residential Buildings Segment to Account for the Largest Share in the Market
In terms of application, the market is segmented into residential buildings, non-residential buildings, and others. Non-residential buildings application holds the largest share on account of large scale application of CLT in construction of office buildings in North America and Asia Pacific. The usage of this product in commercial buildings in Europe is also expanding, which further results in the growth of the non-residential buildings segment.
On the flip side, residential buildings segment is expected to give stiff competition to the non-residential segment on account of large scale consumption of CLT for construction of multi-family buildings in developing regions. Furthermore, in Europe, it is majorly used in residential buildings as they provide excellent thermal insulation performance, which has resulted in the growth of residential segment in this timber market.
Europe Cross Laminated Timber Market Size, 2019 (USD Million)
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The cross laminated timber market size in Europe stood at USD 466.48 million in 2019. Europe is expected to lead the market owing to the large adoption of CLT in the building of small and medium-sized houses in the region. Europe accounts for 65% of the global CLT production and the majority of the product is used locally as this type of timber provides better insulation performance against the cold temperatures usually present in the region. On the flip side, the market in North America is governed by the adoption of CLT in the construction of hybrid buildings that utilize a combination of CLT and conventional materials to create artistic building design for office spaces.
The market in Asia Pacific will derive growth from the increasing product demand in Japan, Australia & New Zealand, wherein CLT is utilized for construction of wood-based buildings with enhanced seismic performance characteristics. The market in China is expected to expand owing to increasing research activities being carried out to include locally grown bamboo into CLT manufacturing. This in turn will reduce the costing of the product making it affordable, comparable to conventional building materials. The market in Rest of World is at a nascent stage and thus shall gain market share in the near future as the adoption of CLT increases in the region.
Key Market Players Focused on Capacity Expansion to Maintain Their Authority in theMarket
The competitive landscape of the cross laminated timber market is highly consolidated with the top 5 companies accounting for a majority share in the market. Key players in the market are investing a large number of resources in research and development of cross laminated timber grades and applications. Companies are carrying out several research activities to develop this type of timber from lumber obtained from trees and plants such as bamboo. In addition, they are focusing on improving product performance against temperature fluctuations and acoustic variation as a course-way to gain market share.
Moreover, key players operating in the market have adopted the strategy of capacity expansion to improve their turnaround time and serve their customers faster. This trend is projected to positively impact the global market during the forecast period.
The global cross laminated timber market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, laminate bonding technologies, and leading applications of this timber. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over recent years.
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Volume - Thousand cubic meters (TCM) Value - USD Million (US$ Mn)
By Bonding Technology
Fortune Business Insights says that the global market size was USD 756.9 million in 2019 and is projected to reach USD 2,062.2 million by 2027.
In 2019, the market value stood at USD 756.9 million.
Growing at a CAGR of 13.7%, the market will exhibit rapid growth in the forecast period (2020-2027).
Non-residential buildings segment is expected to be the leading segment in this market during the forecast period.
Growing demand for environment-friendly construction materials shall be the key driving factor for the growth of the market.
Europe held the highest market share in 2019.
Environment-friendly nature of the raw material coupled with excellent insulation and seismic performance as compared to conventional building products shall be the key factors driving the adoption of cross laminated timber.
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