This is marketing research on the Adhesives industry and can include information on the background, market structure, definitions, competitors, trends and developments of abrasives and is related to other topics such as sealants, glue, cement and manufacturing.

Table of Contents

[edit] Background

Adhesives are any material able to be fastened or adhered to by surface attachment. Glue, mucilage, mastic and cement can all be included in adhesives. They may be wither organic or inorganic. In general, adhesives are regarded as different organic materials, mainly polymeric. In construction, manufacturing and other processes, adhesives are vital parts of the industry. Sealants are adhesives generally used to seal openings or holes to prevent passage of liquids or gases. This is a key part of the construction and manufacturing industries. Other adhesives are used in filling dental cavities for example. Sealants and Adhesives are chemically different but functionally very similar - the adhesives industries also specialize in developing sealant compounds.

In history, Egyptians were prominent users of adhesives. They used animal glues to adhere tombs, papyrus, ivory etc. Instances of adhesive usage have been found among Babylonians and American Indians as well. Primarily, adhesives used in ancient times had been the natural gums and other plant resins or animal glues made from animal products such as buffalo hooves. In the 18th century, the first glue factory in Europe was established in Holland. Modern adhesives have improved in terms of flexibility, toughness, curing rate, temperature and chemical resistance.

By origin, adhesives are natural or synthetic. Natural adhesives are derived from vegetable (natural resin), carrots, food (animal hide & skin) and minerals (inorganic). Synthetic adhesives are based on elastomers, thermoplastic or thermosets. By method of application, adhesives are generally of six types:

• Drying Adhesives
• Contact Adhesive
• Hot Adhesives
• Reactive Adhesives
• UV & Light Curing Adhesives
• Pressure Sensitive Adhesives.

[edit] Market Structure

The adhesives and sealants industry in USA consists primarily of the manufacturers of industrial and household adhesives, glues, sealants, tile, rubber, cements from vegetable, animal, or synthetic plastics materials. In 2002, there were approximately 600 adhesive manufacturers in USA, with Ohio the leading manufacturing state.

In the late 90s, the U.S. adhesives and sealant industry had revenues of approximately US $ 9.2 billion. Principal uses of adhesives included the following:

• Industry assembly (24%)
• Packaging (23%)
• Construction (16%)
• Wood bonding (16%)
• Transportation (11%)
• Consumer products (6%)

Considering adhesives only, construction and packaging contributed 40% each in total volume of demand. Due to the high cost of transportation, exports are not a large factor in the global adhesives industry. There are, however, some exceptions of specific high-performance, application-specific adhesives products in the export trade.

U.S. firms have increased their global market share through international acquisitions recently. Reich-hold, for example, purchased two firms in Italy in the 1990s. HB Fuller also purchased three European firms based in the UK and Germany. At the same time, foreign firms have also entered the U.S. domestic market by the same process.

Use of reactive adhesives expanded as the automotive industry shifted away from mechanical fasteners. Packaging applications for reactive adhesives rose at the same time. The reactive adhesive sector of the industry was dominated by epoxy and polyurethane systems with urethanes taking a prominently larger portion of the market. Growth of epoxy/urethane hybrids has also drawn attention due to the high range of demand placed on adhesives in the automotive industry.

The adhesives and sealants industry has constantly grown at a rate higher than growth of the overall U.S. GDP over past 30-40 years. Much of the credit goes to the industry's contiuing ability to innovate. Lately, however, raw material costs have begun to adversely impact market growth. To counter this, adhesives and sealants manufacturers have taken steps to further develop production efficiencies and increase production in countries such as India and China where manufacturing costs are lower.

[edit] Industry Definitions

• Polymer - polymers are natural or synthetic compounds usually having high molecular weight with millions of repeated linked units. Each of the linked units is relatively light and composed of simple molecules.

• Adherends - the two materials which are to be fastened by the adhesive.

• Adhesive Joint/Bond - the adhesive bond or joint is the resulting assembly of applying the adhesive.

• Adhesion - physical attraction of the surface of one material with the surface of another material.

• Elastomers - polymers having the elastic properties of natural rubber.

• Thermoplastic - polymers which become liquid when heated and solid when cooled.

• Thermosets - polymers that grow to a stronger form through addition of energy. The energy may be heat, chemical reaction or irradiation.

[edit] Market Metrics

The adhesives and sealant market is valued at over $9 billion, with most sales divided among the following groups: industry assembly (24%), packaging (23%), construction (16%), wood bonding (16%), transportation (11%), and consumer products (6%). For adhesives alone, the largest markets were construction and packaging, each with a nearly 40% share of demand, as measured by volume (rather than by sales).

Leading markets for the adhesives industry include the following:

• U.S.
• China
• India
• Germany
• Japan
• Canada
• Brazil
• Argentina

Canada, Germany, China and Japan were the top exporters of adhesives to the U.S. in the first half of 2005. At the same time, the principal importers from U.S. were Canada and Mexico.

[edit] Industry Players

In the late 90s, Sovereign Chemical Company and TACC International of the U.S. were two of the largest producers. Sovereign purchased a portion of former industry leader BF Goodrich's adhesives and sealants business. At the same time, European companies increased investments in American firms. Major European firms included the following:

• Imperial Chemical Industries
• Henkel
• Elf Atochem

As of 1998, Henkel was considered the top-selling company in the industry worldwide.

In 1998, the U.S. consumed almost half of the world consumption of adhesives and sealants. The growth in foreign markets was higher than domestic growth. Latin America consumption has also increased significantly. Demand in that area was expected to increase from 885,000 metric tons in 1997 to 1.1 billion metric tons by 2002.

[edit] Recent Trends and Developments

The adhesives industries is an integral part of other manufacturing and process industries. The growth of the adhesives industry is therefore heavily dependent on the health of those other industries. Some such as the automotive industry have done well in general, but less so in the U.S. domestic market in 2006 and 2007.

Products showing the highest growth in the late 90s comprised of natural-base glues and adhesives; specifically those made from natural gums, shellac, lacquers and varnishes; hot melt adhesives; epoxy adhesives etc. Pressure-sensitive adhesives also increased. Products with decreasing sales have included several types of synthetic resin and rubber adhesives, rubber and synthetic resin combinations. When measured by the value of product shipments, synthetic resin and rubber adhesives accounted for 58% of the market share.

Looking ahead, products expected to see the most growth include electronics adhesives for printed wiring boards, hot melt systems, and automotive adhesives. In the late 90s, the U.S. hot melt adhesives market was valued at $1 billion in the U.S. and was expected to grow at the rate of 3% per annum. Most common final uses for hot melt adhesives were packaging, with 38% of the market, and disposable & pressure-sensitive products, each with 15%.

Growth of the adhesives industry is conditioned by the availability of raw materials. Hot melt adhesives require hydrocarbon resins. Demand for such resins was expected to rise by 2.6% annually in the early years of the new century. Various manufacturers were trying to expand their production capacities to keep up with the growth of the raw materials market. Demand was expected to rise by a rate of 4% per annum.

[edit] Sources

• Wikipedia
• Answers.com (Business & Finance)
• US Census Bureau
• The Adhesive and Sealant Council, Inc.

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