Rauch Guide points to $12.3 billion in 2008

The fourth edition of the Rauch Guide to the U.S. Adhesives and Sealants Industry, a new 324-page study, reports that adhesives and sealants registered sales of $11,850 million in 2003, spurred by resumed growth in the economy. It forecasts that the U.S. adhesives and sealants industry will resume growth after five years of stagnant or declining sales. During the next five years, volume will increase by 12% to reach $12,316 million.

Fastest growth, when measured by end use, is forecast for dental and medical adhesives, although they are growing from a small base. Among the larger categories, electrical/electronics and industrial assembly will increase substantially. Packaging, the largest end use, will grow 12.6% by 2008 (see Table 1).

General-purpose adhesives and sealants, which are used in a variety of applications, including commercial, consumer, and industrial end uses, are the leading type of product. They are forecast to grow 11% by 2008, according to the guide. Hot melts, spurred by renewed growth in the packaging industry, will increase by nearly 17% during that time (see Table 2).

The fourth edition of the Rauch Guide states that some 45 different chemical types of adhesives and sealants are produced. Polyolefins and phenolics, the leaders, each account for 11% of sales. Acrylics (9%), polyurethanes (9%), silicone rubber (7%) and starches and dextrin (6%) follow. Consumption varies by whether the product is an adhesive or sealant. Polyolefins, phenolics, acrylics and starch and dextrin are the leading adhesives; silicones, thermoset polyurethanes, and bitumens are the largest sealants (see Table 3).

There are eight major end-use markets. Packaging, with 28% of the market, and industrial assembly, with 23%, dominate. Transportation, wood and related products, and on-site construction are also important end uses (see Figure 1). The industry supports some 800 suppliers, according to the report. Despite major acquisitions in recent years, the business is not very concentrated. Henkel, with annual sales of $770 million in the United States, controlled 7% of the market in 2003. National Starch came in second with $575 million, or 5%, followed by H.B. Fuller and 3M. Nine companies had domestic sales over $200 million (see Table 4).

According to the study, the major adhesive end uses based on dollar value are: packaging with 44%; wood and wood products with 25%; and industrial assembly with 13%. Major sealant end uses are on-site construction with 37%, transportation with 21%, and industrial assembly with 8% (see Figure 2).

Captive consumption also plays an important role in the industry. Major captive end uses are wood processing, such as manufacturing of particleboard, pressure-sensitive tape production and rubber-to-metal bonding. Captive manufacturing accounts for about 25% of production.

The adhesives market is extremely complex and difficult to quantify. The Rauch Guide is known worldwide as a comprehensive analysis of the entire industry, covering products and end uses often excluded from government and other reports. For example, the guide details unformulated adhesives, captive consumption and such end uses as bottle cap adhesives, binders, and tie-layer adhesives.

The new guide contains six chapters, including industry economics, raw materials, types of adhesives and sealants, end-use markets, and a unique directory of 705 manufacturers of adhesives and sealants.

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