Boeing 787 Dreamliner
Photo courtesy of Boeing
Figure 1. Geographic Distribution
The global adhesives and
sealants industry reached a record $36 billion in 2006, with nearly 4% growth
over 2005, and is forecast to grow at 3.8% through 2008. Not surprisingly, the
greatest advancements occurred in Asia, fueled by emerging markets in China, India,
Vietnam, Korea and Malaysia. Representing nearly a
quarter of global consumption, Asia is growing
2-2½ times faster than developed regions (see Figure 1).
Figure 2. End Markets
Packaging remains the largest
market sector with a 28% share, but the title for the fastest-growing market
sectors belongs to the construction and pressure-sensitive tapes sectors.
Construction grew globally at 4.7%, fueled by major global construction
projects. None was more evident than in China’s unquenchable infrastructure
expansion and preparation for the upcoming world games and 2008 Olympics.
is also making its mark. India’s
government is investing heavily in infrastructure projects to attract foreign
investment. While still in the shadows of China,
will not remain there long, recording a solid 9.2% GDP growth - one of the
fastest in the region and the world.
Pressure-sensitive tapes grew at 5.1% globally. Replacement of mechanical
fasteners and liquid adhesives are major drivers, fueling PSA growth as
user-friendly application alternatives. Energy prices are putting a lot of
pressure on fuel efficiency and financial performance within sectors such as
transportation. This is driving design changes to incorporate lighter-weight
alloys and composites, making it attractive to use adhesives - and specifically
PSAs - to fasten dissimilar materials. Medical and electronic applications,
while relatively smaller, contributed significantly to PSA tape growth as well.
Three resin families, comprised of acrylic, polyurethane and silicones/hybrids,
were the greatest benefactors, reflecting growth greater than 5% per annum. Not
surprisingly, these resins families, supplied both in liquid and PSA tape
forms, benefited primarily from expansion in construction spending,
transportation, and medical applications.
Perhaps the greatest growth has been in moisture-cure hot melts, which are used
for assembly applications including engineered lumber, furniture assembly and
automotive and manufactured housing.
Epoxy and styrene block
copolymers (SBC) follow closely behind with greater than 4% growth. Epoxy
growth is fueled by the resurgence of the consumer electronic sector and the
increased use of structural adhesives for lightweight composites, e.g., the
transportation sector evidenced by Boeing’s 787 Dreamliner and the Airbus
A-380. SBC growth comes as a result of faster growth of hot-melt adhesives due
to their distinct advantages for improved operational efficiencies.
While still negligible, the
industry advanced the use of synthetic polymers from renewable bio-based
materials. Faced with record energy prices, end users were eager to evaluate
new technology to mitigate their dwindling margins.
The industry is bullish on 2007, even with a slowdown in construction spending
due to higher interest rates in North America and Europe.
First-quarter performance showed moderate revenue growth but significant
improvement in margins as a result of slightly lower raw-material prices relative
to first quarter 2006.
In closing, few industries are as stalwart and vibrant as the global adhesives
and sealants industry. It will continue to be a good portfolio investment for
the foreseeable future.
For more information, phone (513) 469-7555 or visit www.chemquest.com.