Brands and countries

Vikas Kulkarni, Managing Director, Bostik India discusses how factors such as rise in adoption of e-commerce, coupled with increased purchasing power are accelerating growth of the adhesives & sealants segment. He also notes how the global movement towards completely biodegradable materials is both a challenge and an opportunity for manufacturers.

Global trends & development in adhesives & sealants industry.

From 2019 to 2021, the global adhesives & sealants market will see growth in applications such as paper and packaging, medical and hygiene, as well as consumer and construction. There are many reasons for this growth, including the increasing global population, technological advancements and the overall rise in purchasing power.

This is especially so in the Asia Pacific region, which is expected to be the largest consumer of adhesives & sealants during the forecast period.The adhesives & sealants market in Asia Pacific is projected to witness the highest growth in the next five years. The surge in demand for medical and hygiene products such as PPE, medical supplies, masks, ventilators, personal hygiene products and paper products comes in light of the current global health crisis. China, India and Japan will be the primary growth generators. Between now and next year, India & China are expected to witness high demand for adhesives, with the growing need for medical structure and PPE from the healthcare industry and packaging products in the FMCG and e-commerce sectors.

On the technology front, water-based technology is dominating the adhesives market because they reduce VOC emissions, and meet the stringent regulations formulated by the relevant authorities. The popularity of the technology comes as consumers grow increasingly aware of the environmental implications of the use of adhesives. In recent years, consumers have started to prefer environmentally-friendly materials that have minimal impact on the environment. On the applications front, pressure sensitive applications are gaining market share globally. In particular, there has been a significant demand for pressure sensitive tapes, safety labels for power equipment – just to name a few.

Potential for adhesives & sealants in India & Asia Pacific.

The paper, board, and packaging segment is the largest end-user industry for the adhesives & sealants market in Asia Pacific. Its applications include composite containers, tubes, bags, carton side seam and closures, cups, labels, specialty envelopes, foil laminates, films, disposables (non-woven), and corrugated boards.The growing adoption of e-commerce, coupled with increased purchasing power as income levels rise, are key factors accelerating the growth of the segment. This is driving the usage of packaging and the consumption of adhesives & sealants.To ensure that goods are delivered safely to customers, Bostik has introduced new technology and materials like Kizen™, a hot-melt adhesive for cardboard packaging based on water-white technology, which combines ease of use with strong bond performance. This will accelerate further growth of adhesives. With Kizen™, packaging manufacturers experience the comfort, security and efficiency they deserve.

Additionally, we also see an increase in demand for engineering adhesives due to growth in industrial outputs in China & India. The adhesives market growth in India is particularly strong, driven by modern technology, smart innovation, demographic shifts and exposure to advanced technology. For instance, there has been a surge in the consumption of adhesives for food packaging purposes. This is a result of changing food habits in India and an increase in ready-to-eat and ready-to-cook meals.In addition to food packaging, other key developments include the use of sealants in the construction industry. We have seen increased use of sealants in new architectural construction projects with glass facades in recent years, as well as in the local footwear industry.

COVID-19 pandemic impact on adhesives & sealants industry in India.

The impact on the adhesive & sealant demand will vary across different end markets. In already fast-growing markets such as medical, hygiene and food packaging, COVID-19 has accelerated their growth.We foresee manufacturers setting up or expanding their manufacturing bases to take advantage of the relatively lower manufacturing cost the world is currently experiencing. As we know, companies that make protective gears have seen an exponential surge in demand due to COVID-19, which has also propelled the share prices of these companies. In the automotive market, we might see a decrease in demand in the short term due to halts in operations in many production facilities. However, we anticipate a rebound in the coming months. The same holds true for the construction industry as we expect growth in infrastructure spending by the government for the construction of highways and affordable housing, which will push demand for sealants.

Having said that, the rising middle class and growing young population in India will continue to increase adhesive & sealant demand for consumer products there. In terms of the raw materials availability for the adhesives & sealants industry there has been minimal impact during COVID-19 pandemic. After the initial supply chain disruptions, we have observed that regular availability of raw materials has been restored, both from domestic and overseas suppliers. Raw material prices are moving but these shifts are not expected to be significant enough to impact demand.

Use of digitalization to support operations and growth of the company.

Bostik has developed smart solutions that touch and improve people’s daily lives. Our smart identity is underpinned by innovation. We pursue innovation vigorously, applying the latest technological advances to develop ‘smart’ adhesives. Our archives are laden with examples of Bostik technologies that have disrupted markets – from potato starch-based wallpaper paste to elastic attachment adhesive for diapers. Today, our commitment to innovation is as strong as ever.

We innovate with our customers through a global R&D network, comprising three international Smart Technology Centres and 11 regional centres. Artificial intelligence and automation will leave no industry untouched. The adhesive industry is benefiting from its use in manufacturing and will continue to evolve with further improvement in technology. To support the growth of the industry, Bostik recently launched Born2Bond™ - a result of our collaborative approach in developing next-generation products that improve efficiencies and enhance sustainability, allowing manufacturers to make better, safer and more innovative products.Born2Bond™ addresses demands for faster curing processes and reduction in waste, all while complying with environmental and health & safety regulations. Born2Bond™ is a portfolio of ground-breaking engineering adhesives that focus on ‘by-the-dot’ bonding applications.

Company’s business in India and future growth strategies.

Bostik has been in India for 20 years and is amongst the industry leaders in most markets in which it operates. It is present in various segments through its four business verticals. They are: durable goods, advanced packaging, construction and non-woven. With Bostik’s strong manufacturing footprint and strong sales and technical services teams, supported by an R&D centre focused on meeting emerging customer needs, it will continue to leverage its global technology platforms to bring world class products that offer value to Indian customers. Bostik will also continue to invest in the country to support the growing demands of customers, and the adhesive and sealant market.

Emphasis on adhesives & sealants segment R&D for India.

Bostik has an R&D centre in India. Our chemists are connected with global R&D centres, leveraging on their global expertise in the product development process. Bostik also has the ability to develop formulations and rigorously test them before launching in the market.With our sales and technical services teams constantly in touch with our customers to understand their changing needs, we are able to work closely with the R&D centres to design products that fit well with our customer requirements.

Maintaining a sustainable approach in the adhesives & sealants industry.

For Bostik, sustainability means achieving harmony between the environment, economics and the social aspect of what we do. These three pillars can be further defined as:

  • Environment: the ability to use natural resources without negatively impacting the environment; the ability to replace or rectify any negative environmental impacts from use
  • Economic: the ability to maintain and grow economic conditions
  • Societal: the ability to advance the quality of life of the community in which we operate.

The key to managing the mega-trend of sustainability is to be adaptable.Bostik offers products that improve the quality of life in the environment we live in, from aesthetically-pleasing design option , to improving the sound quality of our floor and improving the safety of fire retardant adhesives. From automotive sealants to adhesives for diapers, Bostik offers a variety of solutions to meet the needs of our customers and enable our customers to achieve their individual sustainability goals.

Global challenges faced by adhesives & sealants manufacturers.

The global movement towards completely biodegradable materials can be seen as both a challenge and an opportunity for manufacturers. The rising popularity of biodegradable materials means that there is a demand for such products. However, this also poses a challenge to manufacturers as stringent environmental regulations from legal environmental bodies related to VOC (Volatile Organic Compound) emission can hinder the growth of the global adhesives & sealants market. This is because manufacturers are limited to synthetic adhesives & sealants, and also have to bear the rising cost of the key raw materials to produce them.

Suggestions for improving industry growth during COVID-19 pandemic.

We hope that government bodies continue to take measures to ensure enough liquidity in the market so that securing supplies does not become a constraint. Stimulus measures that would propel demand like cash transfers or wage subsidisation may also become necessary as countries emerge from lockdowns. For the industry, companies may want to look at the reallocation of production assets to address product shortages, such as in medical equipment, sanitisers and cleaners. Companies may also want to look at using digital technologies to provide access to customers through digital and e-commerce means, wherever it is possible to do so efficiently. In addition to production flow, companies should also understand their risk profiles and work towards developing contingency plans for various probabilities and risks. This could help companies rebound from the crisis and regain momentum.The pandemic may change demand patterns. Hence, industries should reassess the market and re-evaluate their business and R&D portfolios. The market remains uncertain. We encourage companies to keep a finger on the pulse of the market and stay nimble to adapt to rapid changes.