Winning in a Dynamic and Inclusive Market
Companies must become more agile to take advantage of new growth opportunities in the adhesives and sealants industry.
If the past year taught us anything, it’s that the world is becoming an unpredictable place and change is the only constant. In the Asia-Pacific region, the convergence of economic, technological, customer and regulatory forces are remaking the market into a more dynamic, inclusive playing field. With this transition, we expect to see consistent demand for reliable products, breakthrough technology and innovative high-impact solutions.
As our customers work to enhance operational productivity, we believe that demand for adhesive technologies will surge across multiple industries, including automotive, flexible packaging, goods assembling and general manufacturing. A sluggish world economy, together with rising labor costs and slowing worker productivity gains, are challenging every global company doing business in Asia-Pacific. The need for cost-effective and productivity-enhancing solutions is unprecedented. Serving as key activators in multiple industries to expedite automation and modernization, adhesive technologies are set to benefit.
In the automotive industry, for example, adhesives and sealants help original equipment manufacturers (OEMs) bond different substrates of metal, eliminating the need for welding and mechanical rivets. These adhesive products are making strong inroads in the industry, as car makers and OEMs see the clear benefits of new materials, a simplified manufacturing process and related cost savings. In fact, a recent market report estimates that the automotive adhesives market will grow from $4.03 billion in 2016 to $6.05 billion by 2021, at a compound annual growth rate of 8.5%.1
A two-step surface treatment method from Henkel enables pretreatment of body shells with an aluminum content of up to 100% while reducing waste and the use of energy and chemicals. This process allows vehicle manufacturers to reduce costs and enhance productivity. In addition, sound-deadening solutions for car manufacturers replace bitumen mats with a new generation water-based material, which can be sprayed onto car bodies with robots to significantly increase production efficiency.
Also set to surge is the use of adhesive technologies in a vast array of consumer goods—everything from daily care products to medical devices. As incomes rise in Asia, the region’s rising middle class is more optimistic than it is in the most mature markets. Some 73% of respondents from Southeast Asia believe that they’ll fulfill their biggest dream in their lifetimes, according to a recent AIA Group survey, which will lead to higher consumer spending. In addition, consumers are becoming more sophisticated, particularly those from the upper middle class and those 35 years old and younger. In China, 81% of consumption growth from now to 2020 will come from those with an annual household income of over $24,000. Chinese consumers 35 or younger will drive 65% of that growth.2
An important component of growing consumer sophistication is the demand for high-quality and safe products. In the healthcare industry, the growing importance of adhesive dentistry contributes to the global medical adhesives market growth, projected to reach approximately
$10 billion by 2019.3 Growth in this segment in Asia-Pacific is expected to outpace that of both the U.S. and Europe as more manufacturing shifts to the region.
Adhesive technologies are also enabling a host of innovative features and improvements in such medical care products as syringes, ducts and surgical masks. Bio-sensitive conductive ink and thermal management materials are also meeting increasing demand in products such as blood glucose monitor testing paper. Additional healthcare applications made better by adhesive technologies include drug delivery systems, catheters, implants and therapeutic devices.
Entrepreneurs in Asia are leading global development in drones. China is leading its global rise, with five out of the world’s top 11 venture capital-funded drone companies based in the country. This industry uses adhesive technologies to improve efficiency and safety across joints in the latest- to next-generation commercial drones.
Throughout a company-owned scouting to commercialization process, Henkel Adhesive Technologies is partnering with startup companies whose products range from next-generation flexible displays to game-changing surface treatment technologies. Innovation at an early design stage and high-impact solutions are a winning combination of best-in-class service and unique solutions.
Productivity enhancement, evolving consumer demand and new technologies exploitation are constantly driving adhesives demand. In a turbulent business environment, every company must increase agility to rapidly adapt and steer itself to spot and exploit these growth opportunities.
Henkel continues to transform the way it does business, in line with the Henkel 2020+ vision setting ambitious goals for 2020 and beyond across Asia-Pacific. The company aims to digitize interactions with customers, consumers, business partners and suppliers along the value chain, as well as establish a strategic partnership with 1688, a B2B e-commerce platform, that promises to double “digitally driven” sales to more than @4 billion (~ $4.5 billion) by 2020. ASI
For more information, visit www.henkel.com.
1. Markets & Markets: “Automotive Adhesives Market by Resin Type, Application, Vehicle Type, and Region-Global Forecast to 2021.”
2. “BCG: The New China Playbook” report, December 2015.
3. Markets & Markets: “Medical Adhesive Market-Global Forecast to 2019.”