As the economic downturn continues, the demand for adhesives and sealants
sales remain soft.
BY KERRY PIANOFORTE
ASSOCIATE EDITOR
The adhesives and sealants industry has endured another tough year. As industrial sectors, the automotive industry and the housing market all
continue to struggle, manufacturers of adhesives and
sealants reported softer demand.
The major markets for adhesives and sealants—
transportation and construction—are down significantly,
which of course has had a negative impact on many of the
technology categories of adhesives and sealants, according to Steve Meehan, bonding business director, 3M
industrial adhesives and tapes division. “There is also
significant overcapacity in the industry, from suppliers to
manufacturers to customers, so things will remain fierce-
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ly competitive during a recovery,” he said. “The recession
has given some relief on the availability of some raw
materials, such as synthetic rubber, but depending on the
rate of recovery, we could experience some shortages
again in the near future.”
Although certain major markets have stabilized somewhat, the demand being generated by major industrial
customers remains significantly below the prior-year
level. “The global reduction in manufacturing output
among major industrial customers again significantly
impacted the development of the specialty adhesives and
surface treatment segment,” said Christoph Schmidt,
brand and business unit communications, adhesives
technologies, Henkel. “This is particularly so in the case
of the automotive and electronics sectors, and also the
metals industry, with the associated markets having
shrunken, in some cases, by up to 20%. The effects of the
recession are particularly noticeable in Western Europe
and North America.”
According to David Fuller, vice president, marketing,
DAP Products Inc, the biggest factor impacting the manufacture of adhesives and sealants has been the housing
market. “The sale of existing homes has curtailed DIY
and professional activity due to a slowdown in the
turnover of homes,” he said. “The National Association of
Realtors indicates that sales of existing homes, in number of
units, dropped from 6. 5 million in 2006 to a seasonally adjusted rate of 5.1 million units at the end of August 2009 representing a 21% drop. This has a direct impact on our business
considering our products are used in the preparation of putting a house up for sale as well as the changes a buyer makes
to their new home after purchase.”
In addition to the challenges of the economic downturn,
adhesives and sealant manufacturers have had to contend
with raw material prices. “Soft demand and overcapacity
means that passing on any raw material cost increase to the
end user customer is a difficult proposition,” said Meehan.
“Therefore, cost control is an absolute necessity to offset raw
material and energy cost increases. Lean manufacturing
practices and insourcing where there is available capacity are
