Pune, India – The solvent based adhesives market exhibits high growth potential and is projected to reach a market size of $8.5 billion by 2026 from $7.6 billion in 2021, at a CAGR of 2.3 percent. The market growth opportunities are increasing due to the strength of solvent based adhesives. They provide superior shear and peel strength. The growth of the market is supported by the increasing construction and automobile applications and growing demand in the APAC region.
COVID-19 has posed many challenges for the automotive sector. The U.S., Germany, U.K., Italy, South Korea, Spain and Japan are among the adversely affected major industrialized economies. According to a study by Boston Consulting Group, despite encouraging reports on progress toward a vaccine, numerous risks remain. It is projected that the sales in Europe and the U.S. will not rebound to pre-COVID levels until 2023 at the earliest.
COVID-19 has posed many challenges in the construction sector. Major economies across the world, such as the U.S., Germany, U.K., Italy, South Korea, Spain and Japan, are among the severely affected countries by the pandemic. Social distancing measures, supply chain disruptions and workforce dislocation have led to the suspension of construction activities in most countries due to the disruptions in supply chains and shortage of raw materials and labor. Construction companies with high debts and lower cash reserves faced a liquidity crisis. However, the construction of temporary hospitals and quarantine centers increased with this outbreak of coronavirus.
The recent outbreak of the COVID-19 pandemic has driven the healthcare and medical devices sectors globally. Medical devices such as ventilators, pulse oximeters, oxygen concentrators/generators and syringe pumps are being used in large numbers. This has increased the use of solvent based adhesives in the medical industry.
The aging population driven by increasing life expectancy fuels the demand for medical devices. Emerging economies are increasingly accounting for the consumption of healthcare products and services, including medical devices and related procedures, owing to rising economic prosperity, growing medical awareness and increasing aging populations. The continuous increase in expenditure on healthcare globally has enhanced the sales of medical devices, thereby driving the growth of medical device companies that are mostly based in the U.S. According to the World Bank, all regions (except sub-Saharan Africa and South Asia) have seen an increase in healthcare spending over the last two decades. Thus, the growth of the medical industry is expected to drive the market for solvent based adhesives.
The price and availability of raw materials are the key factors that need to be considered by solvent based adhesive manufacturers to decide the cost structure of their products. PP, paper, PVC, adhesives and release liners are the raw materials used in the manufacturing of solvent based adhesives. Most of these raw materials are petroleum based derivatives that are vulnerable to fluctuations in commodity prices. Oil prices have been highly volatile in the past due to the increasing global demand and unrest in the Middle East region. The uncertainty and fluctuations in the cost and the availability of feedstock are negatively affecting the market.
The adhesives industry is affected by higher manufacturing costs resulting from increased energy costs. The consistently increasing global demand for chemicals and the capacity constraints in the supply of these primary chemicals and resin feedstock have fueled the increase in raw material prices. The supply shortages of monomers, such as piperylene and C9 monomers, used to make the raw materials of adhesives have increased the cost of the raw materials.
The demand for food and healthcare products is expected to increase in tandem with the rise in population. Food packaging is a mature sector in Europe and North America because of high market penetration and steady economic growth. As a result, emerging regions such as APAC and South America offer huge growth potential for the packaging industry. The increasing industrial and bulk packaging solutions are boosting the solvent based adhesive demand in the packaging industry in these regions.
The demand for packaged food products has increased over the past few years with changing lifestyle, particularly in the urban cities of developing countries such as China, India and Malaysia. The changes in consumer demographics, especially in aging, infant and female population, have increased the demand for nonwoven textile products such as baby diapers, sanitary pads and adult diapers. Emerging economies, such as China, India and Brazil, are projected to register a high CAGR during the forecast period for the solvent based adhesives market. Global players in this market are focusing on expansion and investment strategies to expand their presence in these countries.
Stringent regulations by the USEPA (the United States Environmental Protection Association), Europe’s Registration, Evaluation, Authorization and Restrictions of Chemicals (REACH), Leadership in Energy and Environmental Design (LEED) and other regional regulatory authorities have compelled adhesive manufacturers to make eco-friendly products with no- or low-VOC levels. The shift toward more sustainable products has provided manufacturers with significant growth opportunities. Some products, such as H4500, H4710, H4720 and H3151, offered by the leading solvent based adhesives company, Henkel, are solvent-free and comply with environmental regulators.
There is a growing demand for environment-friendly or green buildings, which gives an opportunity for the development of green and sustainable adhesive solutions. Green adhesive solutions are made from renewable, recycled, remanufactured or biodegradable materials.
The global packaging industry in expanding and changing continuously. The developing countries are the fastest-growing markets due to the shift toward urban lifestyle and the growth of the e-commerce industry. The packaging methods are growing more and more eco-friendly. Economic growth and demographic change are the major factors driving the packaging industry. Incomes are expected to rise, which will lead to an increase in consumer spending on packaged goods. Another driving factor for the packaging industry is the increase in the demand for pharmaceutical products due to rising life expectancy, especially in developed markets such as Japan. The demand for pharmaceutical products has increased due the COVID-19 global pandemic. The pandemic also increased online shopping. It also had a negative effect as developed countries started putting their wastepaper in landfills or burning them to avoid coronavirus spread, which led to a shortage of raw materials for the developing countries such as India. It is estimated that the demand for packaging would increase due to the outbreak and the packaging industry is supposed to be the backbone of consumer market during the outbreak.
Polyurethane provide better tint-ability, adhesion, and abrasion resistance. In the automotive industry, polyurethane adhesives are used in the manufacturing of vehicles, in the repair of auto glass, sealing of metal structures such as containers and trucks, in the manufacturing and installation of air conditioning in HVAC systems, to reduce vibration and provide sealing in metal sheet joints. In APAC, polyurethane adhesives are mainly used in automotive & transportation applications, as the region leads in vehicle production globally. More than 90 percent of automobiles are produced with bonded windshields and rear windows using polyurethane globally. Therefore, the increasing demand from automotive and other applications in APAC is expected to drive the polyurethane segment.
APAC has emerged as one of the leading producers as well as consumers of solvent-based adhesives due to the increasing domestic demand, rising income levels, and easy access to resources. The automotive industry is one of the major consumers of solvent-based adhesives in this region. The economic growth in the APAC region, particularly in the emerging markets such as India, Taiwan, Indonesia, Malaysia, Thailand and Vietnam, is contributing to the increase in the number of infrastructure projects, which is expected to drive the demand for solvent-based adhesives in the building and construction industry.