Recent global adhesive market dynamics

Some time ago, companies such as Henkel, Cytec, Sovereign, Sika, etc., in order to maintain their leading position in global adhesives, expand the market, reduce production costs, and implemented global cross-regional mergers and acquisitions. This regional strategic shift can benefit these companies because the growth rate of adhesive consumption in the developed regions is three times that of the United States and Western Europe. In 2002, the total consumption of development areas was 5.7 billion U.S. dollars. Except for Japan, Asia is the largest development area, and its adhesive consumption amounted to 3.5 billion U.S. dollars.

In 2002, the consumption of adhesives in Latin America was US$1.3 billion, with the largest users being Brazil and Mexico. Although many Latin American countries are lagging behind due to the economic impact, their needs have begun to accelerate. In 2002, the sales volume of adhesives in Eastern Europe was US$600 million. With more countries joining the European Union, it showed a strong growth trend. About 3 billion U.S. dollars are consumed in Africa and the Middle East.

One of the characteristics of changing the situation is to shift the production base to the developing market. In December 2003, Degussa announced that it will build a paint factory in Shanghai, China and a device for producing paint polyester. The company is facing the fierce challenge of 1800 adhesives manufacturing plants in China. According to foreign comments, in 2002, the total output of adhesives and sealants in China was 2.89 million tons, an increase of 10.7%. Acrylate emulsion jumped 33.3%, hot melt pressure sensitive adhesives increased 34.6%, and silicones increased 55.2%. The reason why this is so rapid is not only that the labor force is cheap, but more importantly that China has a modern factory, which is much more efficient than the old United States. China also faces restructuring of its industrial structure. In 2002, 200 adhesive factories were closed or annexed.

On the contrary, the adhesive market in developed industrial regions is basically mature. Japan used 1.5 billion US dollars of adhesive, but its annual growth rate is only 1%, and there is a downward trend. In 2001, production fell by 5.5% to 1.05 million tons, while in 2002 it dropped by 0.9% again to 1.04 million tons.

Most Western European markets have also matured and are experiencing economic decline. Feica (European Adhesive Manufacturers Association) estimates that the growth rate will not exceed 2.5% in the next 5 to 10 years. Europe’s largest market, Germany, has only a 25% share and has fallen into a depression. The construction and furniture industries showed a particularly weak performance. Compared with the same period in 2002, the demand for adhesives and sealants for buildings fell by 5% in the first three months of 2003, a decrease of 20% compared with 1999. The German furniture industry has shrunk by 12%, so adhesives are undoubtedly affected.

However, German adhesive manufacturers have the opportunity to export to Eastern Europe. In 2002, Germany's adhesive exports increased by 15% to 658 million euros, and it is estimated that it will continue to grow in 2003. For example, in 2002, Poland imported 53,450 tons of adhesive and finished goods, and Germany supplied 45.2 million US dollars, which is almost half of the amount needed. The active market for polyurethane adhesives in Eastern Europe has also given Germany great opportunities for export.