TAGS: Sustainability / Natural Adhesives Sealants Waterborne Adhesives
Markets and Markets (M&M) anticipates that the global adhesives & sealants market size was USD 76.1 billion in 2024 and is projected to reach USD 86.6 billion by 2029, at a CAGR of 2.6% between 2024 and 2029 forecast period. The growing building & construction industry is a major factor behind the market's growth.
The increasing population and swift urbanization are driving the residential construction sector in developing nations. This surge in demand for permanent housing is consequently driving the need for adhesives and sealants.
Drivers: Growth of Building & Construction Industry
The burgeoning population and rapid urbanization are propelling the residential construction sector in developing nations such as China, India, Indonesia, Vietnam, Brazil, and Mexico. This surge in demand for permanent housing is consequently driving the need for adhesives and sealants.
Within the construction industry, adhesives and sealants find various applications including carpeting, tiling, wallpapers, and exterior insulation systems, as well as in securing curtain wall panels and insulating glass units.
According to Global Construction Perspectives and Oxford Economics, the global construction output is projected to increase by 85% to reach USD 15.5 trillion by 2030, with China, the US, and India contributing significantly to this overall growth. This expansion is primarily attributed to economic recovery in these major economies.
Factors such as globalization, urbanization, improving standards of living, increasing purchasing power parity (PPP), infrastructural development, and the rising demand to construct megacities in emerging economies are driving the construction industry worldwide.
The construction sector accounts for approximately 5% of GDP in developed countries and 8% in developing economies. There is an anticipated substantial demand for infrastructure in emerging economies over the next two decades, with global infrastructure investment estimated to reach USD 3.7 trillion annually by 2040.
Restraints: Stringent Environmental Regulatons in North America and Europe
In Europe and North America, strict environmental regulations govern the production of chemical and petroleum-based products. Agencies such as the Epoxy Resin Committee (ERC) and the European Commission (EC) oversee the manufacturing of solvent-based products in these regions.
Consequently, these regulations are impacting the production capacities of manufacturers in Europe and North America, prompting them to prioritize the development of eco-friendly adhesives and sealants.
The chemical industry is subject to regulation by authorities such as the Control of Substances Hazardous to Health (COSHH), the European Union (EU), Registration, Evaluation, Authorization, and Restriction of Chemicals (REACH), the Globally Harmonized System (GHS), and the Environmental Protection Agency (EPA) in Europe and North America.
Manufacturers in these regions must adhere to regulations governing the production and use of plastic adhesives and sealants across various applications to minimize volatile organic compound (VOC) emissions.
Compliance with these regulations entails additional burdens such as labeling, paperwork, and extra costs for external testing to demonstrate adherence. Plastic adhesive and sealant manufacturers must continuously meet evolving standards and regulations for the commercialization of their products, which serves as a constraint for manufacturers in these regions.
Opportunities: Investments in Emerging Markets of Asia Pacific
Emerging economies are directing substantial investments into large-scale infrastructure development projects, driving higher growth rates in developing markets compared to North America and Europe. This trend is fueled by significant investments from leading companies in these regions. Asia Pacific, particularly China and India, presents notable growth prospects for manufacturers of adhesives and sealants.
Rapid urbanization, stable economies, and a thriving construction sector are driving demand for adhesives and sealants in various Asia Pacific countries. The construction of more residential buildings is underway to accommodate the growing populations in major cities across Indonesia, Malaysia, Thailand, Vietnam, and other nations.
The rising income levels and increased purchasing power in emerging economies across Asia Pacific, the Middle East & Africa, and South America are driving heightened investments in construction.
Consequently, manufacturers of adhesives and sealants have opportunities to leverage the growth potential of emerging markets such as China, India, Russia, and Brazil.
Challenges: Regulatory Compliance
The adhesives and sealants market experiences frequent regulatory changes as various regulatory authorities implement new standards and rules. For instance, the Construction Products Regulation (CPR) introduced regulation (EU) No 305/2011 for marketing construction products in the EU. These new regulations impose additional burdens on manufacturers, including increased labeling and paperwork requirements, as well as additional costs for external testing to ensure compliance.
Furthermore, regular substance alerts focusing on biocides and waste packaging contribute to ongoing adjustments in regulatory standards. Adhesives and sealants manufacturers must adhere to these evolving rules and standards to commercialize their products, presenting a challenge for them in the process.
Water-based Technology Accounted for Largest Growing Segment
The surge in demand for water-based adhesives stems from the steady uptick in building and construction activities in North America, coupled with the launch of new infrastructure projects in India, Taiwan, and other developing nations globally.
With their exceptional adhesion properties across diverse substrates, these adhesives find extensive use in packaging applications, including bookbinding, paper bags, cartons, labels, foils, films, paperboard decals, wood assembly, automobile upholstery, and leather binding.
Highest Growth in Asia Pacific Region
Asia Pacific has emerged as a prominent hub for both the production and consumption of adhesives and sealants, owing to growing domestic demand, rising income levels, and abundant access to resources. Additionally, it leads the world in automobile production, with the automotive and transportation industry serving as a major consumer of adhesives and sealants in the region. Economic growth in Asia Pacific, particularly in emerging markets like India, Taiwan, Indonesia, Malaysia, Thailand, and Vietnam, is fueling an increase in infrastructure projects. Consequently, this surge is expected to drive demand for adhesives and sealants in building and construction applications.
Key Market Players
Henkel AG & Co. KGaA (Germany), H.B. Fuller Company (US), Sika AG (Switzerland), Arkema (Bostik) (France), and 3M (US) are the key players in the global adhesives & sealants market.
Henkel maintains a widespread global presence with a meticulously structured and diversified portfolio. Its operations encompass the manufacturing and global distribution of homecare, laundry, cosmetics, and adhesive products. The company operates across four primary business segments: adhesive technologies, laundry & home care, beauty care, and corporate functions.
Adhesive products are specifically manufactured within the adhesive technologies segment. Henkel caters to a diverse array of applications tailored to meet the requirements of various customer demographics, including consumers, craftsmen, and industrial enterprises. Renowned as a global frontrunner, Henkel Adhesive Technologies leads the market in adhesives, sealants, and functional coatings worldwide. This comprehensive solution offering is organized into five technology cluster brands: LOCTITE, BONDERITE, TECHNOMELT, TEROSON, and AQUENCE.
Recent Developments
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In November 2023, Henkel has launched a novel medical grade light cure adhesive designed for devices that are to be worn on the body. The new product is formulated without IBOA (Isobornyl Acrylate) or any other known skin sensitizing monomers. The newly developed adhesive is available in two different grades. Loctite WT 3001 and Loctite WT 3003 have both been tested according to ISO 10993 standards, ensuring high safety and performance for users. The solutions have also been tested for skin sensitization, making them suitable for a wide range of medical applications including wearable devices.
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In January 2022, Henkel Adhesive Technologies invested in Smartz AG (Smartz), a medical technology start-up headquartered in Baar, Switzerland, to strengthen its capabilities to meet the growing demand for smart adult care solutions.
Source: Markets and Markets (M&M)