The global market for adhesives and sealants is growing exponentially. The growth of major end use industries like construction, packaging and automotive is the major driving force behind the same. There is also an increasing penetration across panel lamenting, flooring, facades, insulation, lamination and coating which has generated an increase in demand of the product. Sealants are available in a viscous form with little flow and are preferred for applications that need easy substrate penetration and material insolubility. There is also an increasing demand of adhesives in pressure sensitive applications, construction, furniture, packaging and automotive applications which will fuel industry growth.
The biggest challenge for the industry is the increasing regulatory intervention from environmental bodies along with the federal agencies. It has prompted research and development initiatives to develop bio based adhesives in order to meet the consumer preferences. Bio based products reduce the carbon footprints and give a competitive advantage over their synthetic counterparts. Such products include vegetable based polyamides, soybean derived polyols, epoxies and polyisoprenes. Green additives are also being developed to replace the synthetic raw materials. These products are gaining a higher market share owing to the eco-friendly and low cost properties as compared to convention al counterparts. The share of bio based products in the industry is expected to rise over the coming years. Currently, it comprises of 1-2% of the total industry share.
The global adhesive market can be divided into water based, hot melt, solvent based and reactive according to the technology. Water based formulation is a dominant technology with more than 45% demand in 2014. The major contributing factor to its higher demand is the eco-friendly nature and zero VOC emission. It is expected to replace solvent based counterparts in the coming period. Water based formulations will be the fastest growing with an estimated CAGR of 5.4% from 2014 to 2020. Further, hot melt technology caters to the niche applications and its consumption is rapidly increasing across developing countries. Its global revenue is expected to exceed USD 7 billion by 2020. Lastly, reactive technology is utilized on a small scale as compared to others. However, the products based on this technology have long lasting bond strength and a high temperature resistance.
Majority adhesives include polyurethanes, acrylic, PVA, epoxy, EVA and styrenic block. Acrylic leads the product segment with more than 35% of the total demand. It is estimated to be the fastest growing product with a CAGR of 5.3% from 2014 to 2020. The demand for Polyurethane-based product is expected to reach USD 4.35 billion by 2020 growing at the rate of 6.1% CAGR. According to the application, adhesives and sealants can be divided into building and construction, woodworking and joinery, paperboard and packaging, pressure sensitive applications, furniture and footwear. Pressure sensitive applications emerged as the largest segment and accounted for more than 29% of the total industry share. It was followed by furniture which has seen a fast growth. Key applications for sealants include packaging, automotive, pressure sensitive tapes, and construction and consumer applications. Construction leads the market share with a 27% demand. There is an increasing residential and industrial construction in emerging economies like China, Mexico and India which are expected to drive the application segment growth.
Asia Pacific accounts for a large share in the global demand due to growing end use industries like automotive, construction and packaging. North America is also showing high demand for water based adhesives formulations with an increasing scope in furniture, footwear and pressure sensitive applications. Development in technology is expected to drive the market growth in coming years. The global industry has been affected by significant consolidation through mergers and acquisition. Several companies have increased their presence by implementing sustainable processes to focus on the development of bio based products. In order to keep up with the global trend and to meet the regulatory requirements of the government, companies need to adopt sustainable means of production and cater to the changing preferences of the consumers. An increased investment in research and development will help diversify the product range and contribute towards the growth of the sector.