Global Industrial Adhesives and Sealants Growth Opportunities

Technology is changing the face of several industries and the Global Adhesives and Sealants Market is not far behind which is at the forefront of a tectonic shift in terms of quality and the number of innovative products which could shift the segment towards significant growth with the surging demand for the application for these products. There are lucrative opportunities such as green and sustainable adhesives, New Chemistries and Persistent Innovation and R&D.

Definition / Scope
Market Overview
Top Market Opportunities
Market Risks
Market Drivers
Market Restraints
Industry Challenges
Technology Trends
Regulatory Trends
Post COVID-19 Recovery
Market Size and Forecast
Market Outlook
Technology Roadmap
Distribution Chain Analysis
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References
Appendix

Definition / Scope

Adhesives and sealants are different types of adhesives and sealants that are used to join two or more surfaces together. Adhesives are chemical mixes that are used to hold, fix, or bind two or more objects or materials together. They have strong shear and tensile properties, and the connection can be transient, semi-permanent, or permanent. Sealants, on the other hand, are semi-solid compounds that are employed to stop fluid leaks. They offer a barrier or protective covering by filling gaps between substrates to seal components and joints. Both adhesives and sealants are often used on materials such as metals, wood, glass, and plastics and are based on a variety of formulas, including organic, inorganic, acrylic, polyurethane, and silicone.

By adhesive technology, the market is segmented into

water-borne,
solvent-borne,
reactive,
hot melt, and other adhesive technologies

By sealant product type, the market is segmented into

silicone,
polyurethane,
acrylic,
polyvinyl acetate, and other sealant product types.

By end-user industry, the market is segmented into

building and construction,
paper,
board, and packaging,
transportation,
woodworking and joinery,
footwear and leather,
healthcare,
electrical and electronics, and other end-user industries.

Market Overview

In 2021, The Global adhesives and sealants market were worth over USD 62.64 billion, and it is expected to grow at a CAGR of over 4.9 percent over the forecast period (2022-2028).

Various building efforts have been paused around the world as a result of COVID-19, and industrial activity have been placed on hold for an extended length of time. According to the OICA, automotive manufacturing fell by roughly 23% in the first nine months of 2020 when compared to the same period in 2019. In 2020, this will have a negative impact on the demand for adhesives and sealants.

The shifting focus toward the use of composites and the increasing demand from the packaging industry are important drivers driving the market’s growth over the medium term.

Because of the significant development in demand for packaging materials from food and beverage and e-retail industries, the packaging sector dominated the market and is expected to grow throughout the projected period.

Over the projection period, the increased demand for bio-based adhesives is expected to generate significant prospects for the market analyzed.

With strong demand from end-user industries including as packaging, transportation, electronics, construction, and furniture, Asia-Pacific led the global market.

Market Risks

The Major Risk Factor for Market Players in the Global Adhesives and Sealants Market is

Fragmented Market

The Global Adhesives and Sealants Market is largely fragmented, with a number of conglomerates and medium-sized and small start-up companies accounting for the majority of global market share. Lower entry barriers, a lack of economies of scale, and fierce market competition are all factors contributing to the Global Adhesives and Sealants Market’s fragmentation. Businesses with lower margins and higher costs will benefit from a fragmented market. When interacting with other countries, they also lack the benefit of size.

Top Market Opportunities

The Prime Opportunities for Market Players in the Global Adhesives and Sealants Market are

Non-hazardous, green, and sustainable adhesives

The USEPA (United States Environmental Protection Agency), REACH (Registration, Evaluation, Authorization and Restriction of Chemicals) in Europe, LEED (Leadership in Energy and Environmental Design) in the United States, and other regional regulatory bodies have compelled adhesive and sealant manufacturers to create eco-friendly products with no or low VOC levels. Manufacturers have benefited greatly from the shift toward more environmentally friendly products. The need for ecologically friendly or green buildings is increasing, providing a potential for the development of green and sustainable adhesive solutions. Green adhesives are constructed from renewable, recycled, remanufactured, or biodegradable materials that are both ecologically benign and beneficial to the occupants’ health.

New Chemistries and Versatility at the Forefront

Water-based adhesives are currently the most popular technological segment for adhesives, accounting for more than half of global demand.

Hot melt adhesives are expected to rise in popularity in the next years, owing to continued growth in the packaging and construction industries. In the past few years, tapes and labels have seen tremendous growth, and hot melt adhesives have surpassed solvent-borne adhesives in this category since HMA does not require any drying or curing.

Reactive adhesives based on epoxies and urethanes are expected to be the fastest expanding technology in the coming years due to their vast range of chemistries and adaptability. Manufacturers are transitioning to composites, plastics, and other lightweight materials to reduce total weight, which is driving up demand for specialty adhesives in aerospace and automotive.

The large demand for sealants has been driven by robust growth in the building industry across all areas. Sealants are increasingly being used to bridge greater gaps without losing adhesion or cracking. In Europe and North America, there is a growing trend for energy-efficient construction, and window makers are in high demand for sealants to create these naturally lit projects.

Persistent Innovation and R&D to Give Competitive Edge

In 2018, the top ten adhesive and sealant businesses accounted for just over half of the global market. With cost-focused and product-based initiatives, leading firms such as 3M, Henkel, Bostik, H.B. Fuller, Sika, and Dow maintain their market positions. Companies are pouring a lot of money into developing new products, nurturing their customer bases, and building their brands. Henkel has committed more than $150 million to the construction of a digital innovation Centre in Düsseldorf, Germany. This investment is in keeping with Henkel’s goal of providing more innovative and sustainable adhesive and sealant solutions to the increasing market.

Synergies from mergers and acquisitions have become an important component of today’s industry. To achieve a competitive advantage, leading manufacturers such as H.B. Fuller, Sika, and 3M are focusing on strategic partnership. H.B. Fuller has completed a handful of mergers in the last several years, and it has lately integrated and consolidated its operations to achieve targeted revenue synergies and procurement savings. This will also aid the company’s manufacturing technology and supply chain efficiency improvements.

Market Drivers

The Major Factors driving the Global Adhesives and Sealants Market are

Surging demand for adhesives & sealants from the building & construction industry Residential building is being driven by population growth and urbanization in developing countries such as China, India, Indonesia, Vietnam, Brazil, and Mexico. In these countries, there is a growing desire for permanent housing, which is fueling demand for adhesives and sealants. Adhesives and sealants are used in a variety of building applications, including carpet, tiling, wallpapers, and exterior insulation systems. Curtain wall panels and insulating glass modules are also held in place with adhesives and sealants. As a result, the construction industry’s growing demand for adhesives and sealants is a major market driver.

Growing demand for water-based adhesive

Global water based adhesive market size exceeded USD 23.1 Billion in 2021 and is estimated to grow at over 5.5% CAGR between 2021 and 2027.

Furniture demand has increased as a result of rising disposable income and an increase in the number of construction projects, which should help the adhesives and sealants industry grow. The adhesives market for furniture applications was valued at more than USD 5.6 billion in 2019. Due to increased adoption of sustainable adhesives by manufacturers for furniture production, sustainable business practices should increase demand for sustainable and eco-friendly adhesives.

The adhesives and sealants market share should be driven by increasing consumer awareness of sustainable products and propensity to purchase sustainable products. Moreover, furniture industry is expected to rise in coming future pertaining to growing employee preference for flexible workspace and workspace designs which should drive the furniture market thereby stimulating adhesives market growth.

In the construction and automotive industries, water-based adhesives are favored in porous and non-porous substrates. Water-based adhesives have excellent water resistance, high bond strength, and corrosion and water resistance. Water-based adhesives are environmentally benign since they contain no volatile organic compounds (VOCs), which is driving demand for adhesives and sealants in industrial applications.

Once the water in the formulation evaporates, a water-based adhesive produces a bind between two substrates. Because of the rising need for industrial uses for packaging and bottling, the product is environmentally beneficial because it comprises water rather than solvents. Water-based adhesives are commonly premixed powder solutions that are mixed with water before use.

Rising Demand from Developing Regions

The Asia-Pacific region’s remarkable economic expansion has greatly outpaced that of other areas, and is consequently predicted to fuel market growth. The region’s rising middle-class population, particularly in China, is driving significant demand, mostly from automobile OEMs and packaging materials producers like Amcor, Crown Holdings, and Mondi. Rapid urbanization and population expansion in Asia-Pacific are boosting infrastructure and development activities, which is driving up product demand in the region. In addition, Asia-Pacific is drawing investments for localized production and R&D operations, allowing for speedier and more efficient customer service while retaining long-term market competitiveness. Because of the increasing amount of construction activities, this area has the biggest market share.

The construction sealants market in the United States is primarily impacted by rising per capita income, fast urbanization, expanding housing sectors, and favorable government policies that have increased demand for modern architecture and home décor. In addition, rising demand from the residential and non-residential sectors, as well as government investment in existing and new infrastructure projects, are supporting growth in the North American construction market. The growing demand for electronics devices such as electronics components, laptops, smartphones, and other gadgets is expected to fuel market expansion in the European area, which would in turn boost overall market growth.

Market Restraints

The Major Factors Restraining the growth of the Global Adhesives and Sealants Market are

Environmental regulations in North America and Europe

The manufacture of chemical and Petro-based products is heavily regulated in Europe and North America by environmental legislation. The manufacturing of solvent-based goods in these regions is regulated by organizations such as the Epoxy Resin Committee (ERC) and the European Commission (EC). This has an impact on the manufacturing capacities of manufacturers in Europe and North America. Environmental laws, on the other hand, are forcing manufacturers to focus on manufacturing environmentally friendly adhesives.

Excessive Amount of Chemicals Used in Production of Adhesives and Sealants

When these goods are used, a large number of chemical gases are released, which are regarded dangerous and hazardous when inhaled. As a result, the rules governing their use are getting more stringent. Furthermore, producers are concerned about increased customer knowledge about health and the environment. ‘The regulatory framework is causing substantial hurdles for the sector,’ says Emerald Performance Materials’ Vice President. Environmental protection authorities, such as the United States Environmental Protection Agency, are implementing different steps and, as a result, producers are facing greater obstacles and constraints.

Industry Challenges

The Key Challenge for Market Players in the Global Adhesives and Sealants Market is

Shifting rules and changing standards

In terms of norms and rules, the adhesives and sealants industry is constantly changing. The Construction Products Regulation (CPR) imposed new regulations for the marketing of construction products in the EU, such as regulation (EU) No 305/2011. Manufacturers must now shoulder an additional burden in terms of labelling and documentation to establish compliance, as well as increased external testing costs, as a result of the new laws.

Additional material alerts focusing on biocides and waste packaging are issued on a regular basis, resulting in regulatory modifications. Manufacturers of adhesives and sealants must follow the laws and changing standards in order to commercialize their goods. Manufacturers face a hurdle as a result of this.

Technology Trends

Technology is changing the face of several industries and the Global Adhesives and Sealants Market is not far behind. The Major Tech Trends in the Global Adhesives and Sealants Market are

Use of 3-D vision in adhesive applications

Inspection of adhesive applications that can’t be inspected with traditional 2-D vision systems is done with 3-D vision systems. When adhesive is used to hold two components together or seal a joint against the elements, 2-D machine vision or a human inspector can often determine the footprint of the adhesive, but when the adhesive and the part or background are black on black, these techniques cannot accurately determine the volume of the glue or the glue’s features. These obstacles are solved using a 3-D vision system that uses a combination of a laser that projects a line and an image sensor to calculate the position and volume of the adhesive. This makes it easy to verify that the correct amount has been applied and that it is in the right position to seal the part.

Ebeam technology is thriving

Ebeam technology has been around for over 40 years, but it’s only lately gained popularity as an alternative to oven drying and ultraviolet curing among glue makers and package converters. Because it is both powerful and cost-effective, the technology is advantageous. The Adhesive and Sealant Council regards VOCs (volatile organic compounds) as a negative since they can lead to respiratory disorders and poor air quality. Ebeam technology creates virtually no VOCs. An ebeam system is typically more expensive up front than a UV system, but the payback period is commonly measured in months because they provide more consistent output and use less energy.

Adhesive tapes are the forefront of innovation

Adhesive tapes are the newest market trend, thanks to their quick working time, flexibility, and bonding ability. Engineers across a variety of areas, from automotive to aviation, are increasingly turning to these tapes. Adhesives can be made with a variety of viscosities and drawn into films and tapes to meet specific requirements, and they can also be used as a substitute for mechanical fasteners in a variety of assemblies. Furthermore, because of the low labor and production costs, these are gaining appeal. Furthermore, they are chosen over traditional goods because of their minimal odor, which helps to create a pleasant working environment.

Regulatory Trends

Regulatory consequences in the field of adhesives and sealants have been lax. Nonetheless, administrative entities at the local, regional, and national levels have not endorsed any of these, despite the fact that they do not violate any laws or regulations. The government’s backing has undoubtedly resulted in a significant increase in the market for marine adhesives and sealants. The market’s expansion has surely been fueled by factors such as increased demand for electronic gadgets and, as a result, increased consumer spending power.

At the same time, regulatory organizations have conducted frequent quality checks on them, ensuring that the dedication to quality is not compromised in any way. This has been proved beneficial to the end-users because they can breathe a sigh of relief about the quality.

Post COVID-19 Recovery

The effect on adhesive and sealant demand will vary depending on the end market. COVID-19 has expedited the growth of existing fast-growing areas such as medical, hygiene, and food packaging. Manufacturers are expected to establish up or extend their manufacturing facilities in order to take advantage of the world’s current cheap manufacturing costs. As we all know, protective gear manufacturers have seen an exponential increase in demand as a result of COVID-19, which has boosted their stock values.

Due to the halting of operations at numerous manufacturing facilities, we may witness a drop in demand in the automobile sector in the short term. In the next months, however, we expect a resurgence. The same is true for the construction industry, as we anticipate increased government infrastructure spending for motorways and affordable housing, which will drive demand for sealants.

Having said that, India’s burgeoning middle class and young population would continue to drive up demand for consumer adhesives and sealants. The availability of raw materials for the adhesives and sealants industry has been unaffected by the COVID-19 epidemic. Following the initial supply chain delays, we’ve noticed that regular raw material availability has been restored, both from domestic and international vendors. Although raw material prices are fluctuating, these changes are not likely to have a significant influence on demand.

Market Size and Forecast

In 2021, the global adhesives and sealants market was valued at USD 62.64 billion. COVID-19’s impact has been unprecedented and startling, with adhesives and sealants experiencing a demand shock across all regions as a result of the pandemic.

According to our calculations, the worldwide market contracted by 7.1 percent in 2020, compared to the average year-on-year growth of 2017-2019. During the period 2021-2028, the market is expected to increase at a CAGR of 4.9 percent, from USD 65.71 billion in 2022 to USD 87.47 billion in 2028. The abrupt increase in CAGR is due to the demand and expansion of this market, which will return to pre-pandemic levels once the pandemic is gone. Because of its application in the building and construction industry, the market is predicted to rise at a rapid rate.

With the emergence of high-performance polymers and formulas, their use has exploded. They are the most significant materials in building, and the industry is expected to expand as new technologies and design techniques are adopted. Furthermore, builders and artisans are continually experimenting with newly produced items, prompting manufacturers to conduct tests on new product advancements. For example, in May 2020, Creative Materials, Inc. released 128-24, a new gold conductive ink glue that provides great effectiveness while requiring less gold.

The water-based adhesives segment contributes a major share in the global market

The global adhesives market has been divided into four categories depending on formulation technology: water-based, solvent-based, hot-melt, reactive, and others. In 2021, the water-based adhesives category accounts for over 30% of the worldwide Adhesives and Sealants market. Because of its eco-friendliness, the water-based adhesives segment holds a significant market share among these technologies. It also has a high-water content and low toxicity, indicating that it is becoming more popular as a less flammable technology.

Global sealants market to be driven by silicone resins

The market has been divided into acrylic, polyvinyl acetate (PVA), polyurethane (PU), silicone, and others based on sealants. Due to various favourable qualities, such as high-temperature resistance, the silicone segment accounts for the majority of the market share in sealants. This boosts its acceptance in a variety of industries, including the building industry.

Based on application, the automotive & transportation segment is expected to grow at the fastest rate of CAGR 7.5% during the forecast period

The Adhesives and Sealants market has been divided into paper & packaging, automotive & transportation, building & construction, woodworking, consumer products, healthcare, and others, based on applications. In 2021, the automotive and transportation segment is expected to increase significantly in the market. The demand for adhesives in the automotive industry is skyrocketing, thanks to rising desire for lightweight, environmentally friendly, and efficient vehicles. The car industry’s global development is being fueled by government regulations aimed at improving fuel efficiency.

Asia Pacific to exhibit the fastest growth in the global market throughout the forecast period

During the projection period, Asia Pacific is expected to develop at the quickest rate in the worldwide adhesives and sealants market, with a CAGR of 12 percent. This expansion can be attributed to a number of factors, including the continued rise of the manufacturing industry in nations like India and China. Furthermore, these economies have a sizable automotive and electronics industries, which contribute to the region’s adhesives and sealants market growth.

Market Outlook

The global adhesives and sealants market was worth USD 62.64 billion in 2021, and it is predicted to increase at a CAGR of 4.9 percent between 2021 and 2028. Over the next eight years, changes in material consumption patterns, with materials such as aluminium, metal, and paper being replaced by more durable materials, are expected to have a favorable impact on product demand in packaging applications.

The market in the United States is expected to be driven by consistent demand for packaging products from the food and beverage industry. Furthermore, the growing presence of discount retailers in the United States, as well as the great potential for grocery retail, are expected to drive adhesive demand for packaging products. This, in turn, is likely to benefit the long-term growth of the market.

The shifting focus toward the use of composites and the increasing demand from the packaging industry are important drivers driving the market’s growth over the medium term.

Over the projection period, the increased demand for bio-based adhesives is expected to generate significant prospects for the market analyzed.

With strong demand from end-user industries including as packaging, transportation, electronics, construction, and furniture, Asia-Pacific led the global market.

Technology Roadmap

The rising demand for adhesives and sealants from a variety of end-use sectors offers promising growth opportunities. Participants in the market should think about the following:

Growing demand for biodegradable adhesives is projected to be fueled by the growing popularity of sustainable packaging: Packaging adhesive makers must focus on developing chemistries that fulfil high bonding standards while also being compostable in order to develop sustainable packaging.

New adhesive demand is being created by high-performance elastic adhesives for electrical and electronic applications: Electronic adhesive makers should concentrate on creating adhesive product portfolios with a wide range of elasticity and flexibility.

Strategic acquisition of key businesses: Adhesive and sealant companies should focus on using their inorganic growth skills to develop and compete in newer markets.

Distribution Chain Analysis

The Supply Chain of the Global Adhesives and Sealants Market is as in the below image

Competitive Landscape

The adhesives and sealants market is highly fragmented, with the top five firms controlling nearly 36% of the market. Henkel AG & Co. KGaA, 3M, H.B. Fuller Company, Arkema Group (Bostik SA), and Sika AG are only a few of the market’s key participants.

Key Market Developments

In November 2020, Full-Care 5885 was created by H.B. Fuller to fulfil the expanding need for natural-based hygiene products in the industry. This adhesive provides excellent value by combining high-performance 100% cotton bonding with reduced application costs.

In February 2020, Henkel has opened its new manufacturing site in Kurkumbh, India, near Pune. The business unit, which has a total investment of almost USD 57 million, aims to meet the growing need for high-performance adhesives, sealants, and surface treatment products in Indian industries. The new plant, which was designed as a smart factory, is capable of a wide range of Industry 4.0 processes and fulfils the highest sustainability criteria.

Competitive Factors

The Market Players are engaged in both organic and inorganic strategies for business development. The Organic Strategies adopted by the Market Players include optimization of processes, reallocation of resources, and new product offerings and the Inorganic strategies include Mergers & Acquisitions, Partnerships and Business Alliances.

Key Market Players

Some of the key players in the Global Adhesives and Sealants Market are

Henkel AG & Co KGaA is a consumer and industrial goods company. Consumer adhesives, craftsmen and building adhesives, industrial adhesives, beauty care, and laundry and home care are among the company’s segments. Western Europe, Eastern Europe, Africa/Middle East, North America, Latin America, and Asia-Pacific are all served by the company. Adhesives for Consumers, Artisans, and Building is the company’s operating segment that sells a variety of brand-name adhesives to individual consumers, craftsmen, and the building industry. Packaging and consumer goods adhesives, transportation and metal, general industries, and electronics are among the Industrial Adhesives categories.

H.B. Fuller Company is an adhesives, sealants, and other specialized chemical product formulator, manufacturer, and marketer. Hygiene, Health and Consumable Adhesives, Engineering Adhesives, and Construction Adhesives are the company’s segments. In the assembly, packaging, converting, nonwoven and hygiene, health and beauty, packaging, graphic arts, and envelope markets, the Hygiene, Health, and Consumable Adhesives section manufactures and supplies adhesives. Transportation, electronics, medical, energy, aerospace and defense, wood, insulating glass, textile, appliance, and heavy machinery are all served by the Engineering Adhesives section. Floor preparation, grouts and mortars for tile setting, and adhesives are all part of the Construction Adhesives segment. It provides its services to customers in electronics, disposable hygiene, health and beauty, transportation and infrastructure, aerospace, energy, packaging, construction, woodworking and general industries.

Sika AG is a chemical corporation with headquarters in Switzerland. The company primarily manufactures items for the automotive and auto parts industries, as well as renewable energy and equipment and components. The Company’s operations are split into two divisions: the Construction Division sells concrete admixtures, ready-to-use mortars, roofing systems, waterproofing systems, flooring systems, and steel protection solutions, among other things, and the Industry Division develops bonding, sealing, damping, glazing, and reinforcing solutions, among other things. Sarnafil, Sikadur, Sikaflex, SikaGrout, SikaPower, SikaHydroPrep, SikaReinforcer, SikaViscoCrete, Sikaplan, and SikaRapid are among the company’s brands.

Arkema SA is a chemical company that is engaged in the production of specialized chemicals and innovative materials. Construction, packaging, chemical, automotive, electronics, food, and pharmaceutical sectors are among the areas for which the company produces products. High Performance Materials, Industrial Specialties, and Coating Solutions are the company’s three main segments. Specialty Adhesives, Technical Polymers, and Performance Additives are among the business lines in the company’s High-Performance Materials section.

Strategic Conclusion

The Global Adhesives and Sealants Market is at a Saturation state but it is poised to grow significantly once the supply-chain disruptions caused by the outbreak of the COVID-19 Pandemic sets in. As the segment witnessed a significant breakdown due to the constraints caused by the pandemic there is a turnaround witnessed as the economies are opening up their borders. The Global Adhesives and Sealants Market is poised to grow at a CAGR of 4.9% in the forecast period (2022 – 2028) to reach a Market Size of US$ 87.47 Billion in 2028 from a value of US$ 62.64 Billion in 2021.

There are ample opportunities for Market Players with the innovations and advancements in technology which is expected to augur well for the transformation of the segment. There are lucrative opportunities such as the green adhesives, New Chemistries and Versatility at the Forefront, Persistent Innovation and R&D are expected to Give Competitive Edge to Market Players. As Market Players are investing their budgets heavily on R&D activities there is a wave of innovative products that are in the forefront of new launches which is expected to positively impact the revenue generation in the segment.

References

Appendix

OICA – Organization Internationale des Constructeurs d’Automobiles
USEPA – United States Environmental Protection Agency
REACH – Registration, Evaluation, Authorization and Restriction of Chemicals
LEED – Leadership in Energy and Environmental Design
R&D – Research & Development
ERC – Epoxy Resin Committee