Part of the fragmentation is due, of course, to the fact that there are a large number of types of chemical sealants, each with its own set of properties that makes it more suitable for some applications than for others. What is troubling, however, is the lack of consistency from supplier to supplier as to what is or is not a sealant. Some products called sealants are in fact adhesives, while some that are called adhesives are actually sealants.
In addition, there are no standards on how to classify a product that has both adhesion and sealing capabilities. This poses a challenge to the industry in that if suppliers of adhesives, sealants and coatings all lack agreement on product definition, the potential customer must be even more confused.
Defining a SealantFrost & Sullivan defines a sealant as a liquid, paste or foam material, that, when applied to a joint or orifice, forms a tight seal against liquids or gases. Furthermore, caulks are generally used where elastomeric properties are needed, while sealants are materials that are used where elastomeric as well as structural strength properties may be needed.
The Frost & Sullivan definition encompasses both caulks and sealants in its report, which also includes products such as oil-based caulks, which show poor elastomeric properties. While there are many different chemical types of sealants available on the market, the report breaks out these segments into nine basic types:
- polyvinyl chloride (PVC) plastisol types,
- oleoresinous and
- all other types.
The ¿all other¿ group further consists of sealants made from one of the following materials:
- styrene-butadiene rubber,
- ethylene-propylene-diene- monomer (EPDM),
- neoprene (polychloroprene),
- nitrile (acrylonitrile-butadiene),
- chlorosulfonated polyethylene,
- all other thermoplastic elastomers (TPEs) and
- modified silane polymers.
A $1.76 Billion MarketThe 1999 market for North American sealants, as shown in Figure 1, is estimated at $1.76 billion, reflecting 1.24 billion pounds in shipments. It is expected to grow at a compound annual growth rate (CAGR) of 3.0 percent during the 1999-2006 forecast period.
In 1999, the U.S. represented 93.2 percent of these revenues, with a CAGR of 3.1 percent, compared to Canada¿s CAGR of 2.6 percent. The relatively slower growth in Canada reflects its greater dependency on older, less-costly sealant technologies as well as its slower rate of industrial production and construction activity, compared to the United States.
While construction and industrial sectors, as a percent of total revenues, will remain relatively constant in 2006, DIY and aerospace will grow in share importance, while automotive will decline as its CAGR level of 2.5 percent will be lower than that of the other end-use application sectors.
What is happening with automotive sealants is that its growth follows the production growth for North American cars and light trucks. While production of cars and light trucks was strong in the past several years due to population increases and a booming economy, a flat growth in production is forecast through 2006 as economists see an economic slowdown and an increase in import sales in the years ahead. Also, automakers will produce vehicles with fewer seam parts requiring sealants.
Flourishing Market for High PerformersNonetheless, the market for higher-performing sealants will continue to flourish in the years ahead. Construction will need one-part sealants that perform at least as well as two-part systems, without the inconveniences imposed by two-part systems. The aerospace industry will be looking for sealants that can withstand the high temperatures of fuel tanks. The DIY user will want lower-cost sealants for routine applications that will have a longer life than the one or two years currently obtainable from oleoresinous sealants.
One of the market challenges to the North American sealants industry, in fact, is that traditional types of sealants are facing increasing competition from new entrants. Polyurethane-foam sealants, for instance, are offering cost efficiency and ease-of-use benefits. Latex-foam sealants are threatening polyurethane foams by offering easy cleanup and better environmental compliance. Modified silane polymers are encroaching on silicone on polyurethane turf by providing excellent weather resistance, good paintability and environmental friendliness. Polyurea chemistry is showing strong promise in delivering good sealant capabilities in highly corrosive environments.
The wide array of available sealants with different properties, is in fact, one of the challenges to the DIY market in North America. Retailers as well as sealant and caulk suppliers struggle with the growing problem of how to merchandise those products to make them less confusing to the end-user. A study conducted by GE Silicones found that a consumer¿s decision on brand and product choice is largely based on the information printed on the package itself. Some sealant manufacturers make the tragic mistake of compounding the confusion that exists on store shelves by marketing a proliferation of stocking units to the DIY user.
Another market challenge is that adhesive and sealant firms need to examine ways to reduce supply-chain complexity and cost in order to improve their market efficiencies. Supply-chain management (SCM) requires that suppliers obtain the right kind of information that is focused on solving problems or taking advantage of opportunities.
The Frost & Sullivan report, for instance, reveals specific market strategies that sealant companies cannot ignore if they are to improve their performance in the years ahead. Streamlining product development is yet another difficult part of the SCM process. Often the R&D system utilized by sealant companies is complex and somewhat inefficient, with the duplication of earlier formulas and creation of performance outcomes that fail to match the real needs of end users.
Major Issues Facing the IndustrySome of the major issues facing the North American sealants industry as a whole include:
- A transition in the composition of sealants, including base polymers, elastomers and modifiers to meet different performance specifications;
- An increasing need for more technologically advanced sealant products;
- A continuing shift away from solvent-based sealants toward more environmentally friendly sealants, especially waterborne acrylics;
- The tendency for silicone sealants to influence pricing strategy and end-use applications for other types of sealants because of the long-standing reputation of silicones;
- A continuation in the relative importance of the construction, DIY and industrial markets; and
- The need for leadership in the adhesives and sealants industry to clarify the definition and market position of sealants as a distinct group of products, separate from adhesives or coatings.
There will be some interesting market-share movements between sealant types in the years ahead. As shown in Figure 3, the highest CAGRs will come from polyurethane sealants, at 4.1 percent, followed by silicones at 3.5 percent, the ¿all other¿ group of sealants at 3.4 percent and acrylics at 3.2 percent. Polyurethane growth is coming from three areas:
- Continued growth of polyurethane foam sealants in the DIY and construction sectors;
- Increasing importance of other chemistries in the polyurethane family, such as polyureas; and
- Growing acceptance of polyurethane sealants as a replacement of older technologies, such polysulfides for marine applications.
It is worth noting that PVC plastisol sealants are on a decline in the automotive industry because of the planned phase-out of these sealants by U.S. automakers and the environmental concerns over lawsuits that may stem from this type of sealant.
The future of the North America sealants market indeed looks promising provided that it meets the challenges it faces. It is important that adhesives and coatings manufacturers differentiate sealants from their other products. Sealants need to be recognized as a distinct product class that requires ¿ and deserves ¿ a unique set of sales and marketing strategies to prosper.
The recent Report #7149-37 on The North American Sealants Market is available from Frost & Sullivan. For more information, contact Frost & Sullivan Client Services, 2525 Charleston Road, Mountain View, CA 94043; call 650-961-9000; or fax 650-961-5042.