TAGS: Waterborne Adhesives Hot-melt Adhesives Reactive Adhesives Solvent borne Adhesives
Fortune Business Insights (FBI) anticipates that the adhesives & sealants market is projected to grow from USD 62.64 billion in 2021 to USD 87.47 billion in 2028 at a CAGR of 4.9% during the 2021-2028 forecast period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
The global adhesives and sealants market size were USD 59.95 billion in 2020. The impact of COVID-19 has been unprecedented and staggering, with adhesives and sealants witnessing a negative demand shock across all regions amid the pandemic.
Increasing Demand from Building & Construction Industry
The market is expected to grow exponentially owing to its application in the building & construction industry. Their usage has grown rapidly with the introduction of high-performance polymers and formulations. They are considered the most important materials in construction activities, and the market is likely to grow with the adoption of new technologies and design techniques.
Moreover, contractors and craftsmen are constantly experimenting with the newly developed products, and this is pushing manufacturers to perform trials on new product developments. For example, in May 2020, Creative Materials launched a new gold conductive ink adhesive, 128-24, that offers high effectiveness with the less gold requirement.
The outbreak of COVID-19 has disrupted most of the supply chains around the world. This market is no exception. There has been a logistics issue owing to the less availability of manpower, as well as resources to some extent. Some raw materials, such as alcohol, have been diverted to other industries for the manufacturing of essential goods, namely, sanitizers and cleaning products.
Moreover, the absence of consumers in the market has seriously impacted businesses in the second quarter of 2020. For instance, H. B. Fuller Co. reported an 11% decline in business in Q2 2020 as compared to the same period in 2019.
Certain adhesive products witnessed strong demand due to their applications in the paper & packaging, as well as in the healthcare industry. Sealant consumption, on the other hand, is anticipated to be down by double-digit figures in 2020 owing to the extension of lockdown and other restrictions that have severely impacted building and construction activities. Several projects related to road construction activities, buildings, irrigation projects, rural areas, and industrial projects have been halted since the lockdown. For instance, the sales of Sika AG, a key manufacturer, have dropped by 6.1% in this pandemic situation.
Adhesive Tapes: New Trend Among Engineers
Adhesive tapes are the new trend in the market due to their fast-working time, flexibility, and quick bonding property. These tapes are becoming a preferred choice for engineers in different fields, ranging from automotive to aviation. Adhesives act as an alternative to mechanical fasteners for all kinds of assemblies and also can be formulated with multiple viscosities, as well as be drawn into films and tapes according to requirements. Additionally, these are gaining popularity owing to the low labor costs and production costs.
Moreover, they are also preferred over traditional products due to the low odor, which helps to create a comfortable environment for work. In 2016, for example, 3M Industrial Adhesives and Tapes Division designed new acrylic tapes to offer immediate handling strength and easy tape solutions. Also, many Japanese adhesives companies are working on it.
Highest Growth in APAC Region
The tremendous economic growth in the Asia-Pacific region has significantly overtaken the other regions and is, thus, expected to drive market growth. The growing middle-class population, especially in China, is generating a strong demand in this region, majorly from the automotive industry OEMs and packaging materials manufacturers, such as Amcor, Crown Holdings, Mondi, and others. The rapid urbanization and population growth are propelling infrastructure & construction activities in Asia-Pacific, which, in turn, is surging the product demand in this region.
Additionally, Asia-Pacific is also attracting investments for localized production and R&D activities to enable faster and more efficient catering to customer requirements and maintaining long-term competitiveness in this market. This region holds the largest market share owing to the increasing number of construction activities being carried out.
In the U.S., the construction sealants market is mainly influenced by the rise in per-capita income, rapid urbanization, growing housing sectors, and favorable government policies that have boosted the demand for advanced architecture and home décor. Also, the growing demand from the residential and non-residential sectors and government investment in existing and new infrastructure projects are factors driving the construction market growth in the North American region.
The booming demand for electronics devices such as electronics components, laptops, smartphones, and others is likely to drive the market growth for the electronic industry in the European region, which in turn is augmenting the overall market growth.
The application of these products emits abundant chemical gases, which are considered to be harmful and hazardous when inhaled. Thus, the regulations imposed on their usage are becoming stricter. Moreover, the rising consumer awareness about health and the environment has become a prominent concern for manufacturers. According to the Vice President of Emerald Performance Materials, “The regulatory landscape is creating significant challenges for the industry. Environment protection agencies, such as the U.S. Environmental Protection Agency, are taking different measures and thus are placing more hurdles and restrictions on manufacturers.”
Water-based Segment: Generate the Highest Share
The market is classified based on technology into water-based, solvent-based, hotmelt, reactive, and others. The water-based segment holds a significant share in the market. These materials are supplied as a pre-mixed solution or are formulated as a dry powder, which producers and distributors mix with water to obtain adhesive properties. As the polymer in water-based product is soluble in water, the bond formed between them is more susceptible to moisture and water. Water-based adhesives are flexible, economical, and available in wider varieties than other adhesives, and thus have applications in various industries, such as packaging, paper, plastic, and fabric.
The reactive adhesives segment is expected to grow at a significant rate as they provide a tremendous and long-lasting bond in case of intense moisture and temperature change. This material is ideally used in cell phones, computers, blood-glucose meters, and others as it is not as pressure-sensitive as its non-reactive counterparts. Thus, the increasing demand for high-tech devices is the primary factor driving the demand for reactive additives and boosting market growth.
The hot-melt segment is expected to grow at a fast rate due to the increasing demand for solvent-free adhesives. Moreover, these provide benefits, such as high production speed, short setting time, and smooth surfacing. It can also be reactivated by heating and other similar processes. The hot-melt adhesive has applications in industries, such as furniture, automotive, construction, and packaging.
Silicone Sealant Segment to Account for the Largest Share
Based on the sealants resin, the market is classified into silicone, polyurethane, emulsion, polysulfide, and others.
Silicone is the most commonly used as it is much more than simply glue and thus holds the largest share in the market. These are vital components in thousands of products, as they provide advantages, such as flexibility, resistance to temperature, water resistance, oil & chemical resistance, excellent binding properties, and inertness. The major application of silicone is in the building & construction industry and is expected to increase in the forecast period due to infrastructural developments across the world.
The polyurethane segment holds a significant share in the global market. Silicone and polyurethane both fall into elastomeric material categories and are used to fill gaps and keep water and air out. Despite these similarities, they have different chemical properties, lifespan, and cost and thus have different types of applications. Polyurethane sealant is used in industries, such as building & construction and the automotive sector due to its properties, namely, quick-drying and moisture resistance.
Paper & Packaging Segment: High Demand for Packaged Food
Based on the application, the market is segmented as paper & packaging, building & construction, woodworking, consumer/DIY, automotive & transportation, leather & footwear, and others.
The paper & packaging segment held the largest share in the global market. This segment is anticipated to witness an ascendant demand in the upcoming years due to the rising demand for packaged food. More than 80% of food packaging contains adhesives, and thus they are indispensable in this industry. Also, these products have wide applications in the bonding of refined paper and finish surfaces, and therefore have significant demand in the paper industry.
Based on the application, the market is segmented into building & construction, automotive & transportation, consumer, and others.
The building and construction segment holds the largest share in the market. The building & construction sector is on a growth trajectory and is continuously reporting considerable gains in revenue. As a result, the demand for building elements is also rising, thereby boosting the need for sealants and fueling the market growth in the process. Sealants find a variety of applications in flooring, glazing, walls, ceilings, and windows, and thus the market will continue to grow as the building & construction industry expands.
The other major applications include automotive & transportation, consumer, and others. The demand in the automotive & transportation segment is expected to grow at a high rate, owing to an increase in the demand for lightweight, efficient, and eco-friendly cars.
Regional Insights
The Asia Pacific is expected to hold the major market share during the forecast period, owing to the rising demand from the building & construction, packaging, and automotive industries. The market in this region is driven by factors, such as the rising population and surging expenditure in the industrial sector. The rising population is augmenting the demand for vehicles, leading to high product demand in the automotive industry. Also, the rapidly increasing building & construction activities in Asia-Pacific are augmenting the product demand.
Asia-Pacific is the largest consumer of these materials, and China holds the highest share. China, Japan, and India are the key countries contributing to the growth of this regional market. Moreover, Japanese adhesive companies, such as 3M Japan Limited, Alteco Inc., Sika Ltd., and others, are constantly investing in research and development activities and have made great contributions to this market. Several manufacturing plants are under construction in India and China with improved production capacities.
The product demand in North America is increasing due to the higher preference for flexible packaging. The changing trend in consumer behavior and inclination towards more recyclable products has benefited manufacturers in the flexible packaging market.
On the other hand, Europe is projected to witness significant growth in the market. Henkel, Arkema, and Wacker Chemie AG are the top companies in this region and are the major contributors in the global market. Stringent environmental regulations in Europe and the increasing demand for green adhesives would offer lucrative opportunities to manufacturers.
The product demand in Latin America has been negatively affected by the recent economic downturn. However, the demand has remained stable in this region mainly due to the uptake of these materials from the building & construction industry.
Iran has the largest market share in the Middle East, and Egypt is the largest market in Africa in terms of consumption as the building & construction sector is growing tremendously. According to the Saudi Vision 2030, there will be a 70% increase in manufacturing facilities in the region.
Market Players to Strengthen Position by Offering Innovative Solutions
The market is fragmented in nature and comprises small-scale and medium-scale companies. Most of them are continuously adopting strategies, such as acquisitions, collaboration, new product launches, and expanding their manufacturing facilities to strengthen their positions in the market and to drive business growth. Key players in the market have, therefore, developed a strong regional presence, distribution channels, and product offerings to maintain their positions in the market.
In January 2020, GE Sealants & Adhesives launched a new nine-product line of Siliconized Acrylic Latex caulks and sealants to protect painting projects of inside and outside home renovation, including painting & sealing, bath & kitchen, and doors & windows.
In September 2019, Bostik, an adhesive specialist for consumer, construction, and industrial markets launched a modified and innovative silicone sealant for back bedding applications.
September 2019: Sika AG, a specialty chemical company, acquired Crevo-Hengxin, a manufacturer of silicone sealants and adhesives based in China. This acquisition was done to expand target markets and sealing & bonding presence in China and the Asia-Pacific region.
July 2020: Arkema acquired Fixatti, a manufacturer of thermos-bonding adhesive powder. This acquisition was done to strengthen the global offering of hot melt adhesive solutions for niche industrial applications in industries, such as construction, automotive, textile, and others.
Source: Fortune Business Insights