The Adhesives and Sealants Market

By Kerry Pianoforte, Editor | December 4, 2012

Adhesives and sealants manufacturers report on the state of the market for 2012.

Adhesives and sealants are used in a diverse number of markets, from commercial construction to DIY. While the uncertain economy and sagging U.S. housing market has created a difficult situation for adhesive and sealants manufacturers, certain segments such as DIY remain strong.

“Current economic conditions have certainly changed the landscape of today’s marketplace,” said Chuck Houk, president, Tremco Inc.’s commercial sealant and waterproofing division. “Commercial construction was hit hard by the economic downturn and while the results have been devastating for many in our industry, the need to build or restore existing structures to high performance standards has not changed. During this difficult period, we have kept focused on product and system innovation that incorporates connectivity solutions – providing documented, proven performance to our customers that need a total envelope solution. This strategy has positioned us well during this challenging period and our outlook is positive for an early return to growth.”

“The economy has affected every segment in the home improvement industry, adhesives and sealants are no exception, however they are necessity items for the successful completion of a wide variety of projects,” said Joseph McGraw, director of marketing and advertising, United Gilsonite Laboratories (UGL). “The adhesives and sealants category is stable. UGL has found that many dealers have been purchasing on an as needed basis instead of past histories of maintaining larger inventory. But we have seen that demand has remained seasonally strong in the construction sector.”

DAP has seen a significant shift as do-it-yourself consumers account for a much more significant share of purchases in caulks, sealants and adhesives. “This result has certainly been the by-product of the downturn in the housing market going back to 2008,” said Michael Gorman, vice president of marketing, DAP Products Inc. “We remain committed to both our trade professional and DIY consumers though as our focus on developing innovative application solutions has not been altered by the economic conditions.”

DAP’s focus remains on the residential construction repair/remodel market. “We are driving our message towards product solutions for energy improvements and painting projects,” said Gorman. “Weatherization and energy improvements for the home remain a major focus for our consumers as they are looking to live both more cost effectively and responsibly when it comes to home energy use.”

“The use of adhesives is widespread through a number of manufacturing sectors so drops in general economic activity inevitably reduce historic demand,” said Keith Darnell, vice president of SCIGRIP sales and marketing. “However, SCIGRIP is involved in such a wide variety of market segments that the impact on our company specifically is mitigated. The specific properties of our adhesive offering also serve to reduce the cycle cost of manufacturing for many of our customers which drives increased demand even during general downturns.”

“Our products are particularly popular for large scale bonding of certain plastics and composites to themselves or metal and for exposure of the final component to impact or vibration fatigue,” added Darnell. “These properties allow SCIGRIP to benefit from sectors like transport, marine, sport and leisure. We also have adhesive products that are ideal for consumer electronics assembly, which continues to be a fast growing industry.”

Henkel reported that it continued its good performance in the second quarter, despite a difficult market environment. “We expect that the very volatile environment with uncertainties in our markets will persist,” said Holger Elfes, corporate business unit and brand PR, adhesives and technologies at Henkel. “In particular, the effects of the debt and financial crisis in a number of countries will analyze, adapt and further improve our process structures. For Henkel’s adhesives  business the emerging markets in the second quarter provided important momentum for the solid sales increase achieved, with revenues in the regions of Eastern Europe and Africa/Middle East developing particularly well. In Western Europe, sales were slightly below the level of the prior-year quarter, due primarily to negative market conditions in the countries of Southern Europe. By contrast, the strong growth posted once again by our businesses in North America made a significant contribution to the rise in revenues.”

Henkel reported that adhesives for consumers, craftsmen and building business exhibited solid sales performance in the second quarter, with contributions coming from both strong sales and with products for craftsmen and building industry, and from products for do-it-yourselfers. “The regions of Eastern Europe and Africa/Middle East again contributed significantly to the growth achieved,” said Elfes. “Our business in North America also performed very strongly.”

Raw material issues continue to impact the adhesives and sealants market, although some companies have reported a stabilization in prices.

“Due to raw material price rises, cost of sales at all Henkel business units increased compared to the prior-year period by 3.5 percent to €4,322 million  in the first half,” said Elfes. “Raw material prices stabilized toward the end of the first half of 2012. We succeeded in further growing gross margin by increasing our selling prices and maintaining our strict cost discipline. We expect the increase in prices for direct materials to decelerate compared to 2011. We will remain firmly focused on maintaining our strict cost discipline. We also expect an increase in the prices for raw materials, packaging, contract manufacturing and traded goods in the low single-digit percentage range in 2012.”

“While we have passed along a few price increases when appropriate, we have tried to take a balanced approach to this challenge,” said Houk. “From the R&D perspective, we continue to look at ways to reduce our dependency on petroleum-based feedstocks as well as consider renewable raw material alternatives. Also, we are taking very real steps to reduce our internal energy consumption and subsequently reducing our corporate carbon footprint.”
SCIGRIP reports that  it is continually improving production yields and process efficiencies to reduce the amount of raw materials used to make its products and the energy required to process them. “On a global basis, SCIGRIP is now manufacturing in Europe and the U.S. to avoid having to ship goods halfway around the world,” said Darnell. “This serves to reduce transport costs and shorten supply chains for our customers.”

In addition to raw material prices, complying with environmental regulations is a key issue for adhesives and sealants manufacturers.

“Regulatory agencies have certainly forced the industry to think differently about the chemicals used to manufacture the products sold into the commercial construction industry,” said Houk. “At Tremco, we favor taking a proactive approach that allows us to help the agency achieve its VOC goals without compromising our ability to deliver high performance solutions to building owners. This strategy has resulted in a multi-pronged innovative approach to product stewardship. We are capable of offering a suite of products that currently meet the most stringent laws for VOC content with compromising performance. In addition, in the Spring of 2012 Tremco became the first building envelope solutions provider to earn Greenguard Child and Schools certification for indoor air quality. This provides our customers with additional assurance that volatile organic emissions from building components used behind the facade or in the enclosure construction will not negatively impact the quality of the interior environment. Finally, we will continue to incorporate the use of recycled content in our products and packaging and utilize renewable raw materials such as naturally occurring polyols, plasticizers and fillers to take the place of petroleum-based raw materials as appropriate.”

SCIGRIP views regulations as an opportunity to grow its market share against the more traditional products in use. “For instance, we have clients interested in reducing emissions by using SCIGRIP systems, which require lower surface preparation and cure by reaction rather than solvent evaporation,” said Darnell. “The two largest challenges we face are managing the complex administrative requirements of varied, global regulations and find suitable replacements for key raw materials that are newly prohibited by regulatory agencies.”

“The impact of VOC and other environmental regulations can be seen across the board in terms of formulations, handling, storage and transportation,” said Gorman. “DAP is committed in terms of organizational resources and research to develop and deliver the appropriate products that meet the required regulatory requirements.”

New product offerings
Tremco has recently launched ExoAir 230 fluid-applied vapor-permeable air barrier membrane. ExoAir 203 is a monolithic, synthetic vapor-permeable air barrier membrane designed to seal exterior above-grade walls from air infiltration/exfiltration, while serving as a weather-resistant barrier to keep water out. “It remains permeable to the passage of water vapor to prevent moisture from being trapped within the wall which may lead to deterioration of structural membranes and poor indoor air quality, which is particularly compromising in hospitals, schools, laboratories and other sensitive environments,” said Houk. “ExoAir 230 is formulated to resist temperatures up to 240˚F (115˚C), provide unprecedented UV resistance and surpass ASTM 84 testing for flame spread and smoke development along with other components with which it may be used.”
Tremco also launched Vulkem 45 SSL semi-self-leveling sealant. “Commercial construction schedules can be dramatically expedited with Vulkem 45SSL, which allows next-day application to joints in concrete slab pours while ensuring adhesion and eliminating 'green cracking' as the concrete cures,” said Houk.

Vulkem 45 SSL was specially developed for sealing joints in level and/or slightly sloped surfaces up to 6 percent, such as sidewalks, swimming pool decks, terraces, parking decks and plazas. It can be applied to fresh concrete 24 hours after concrete forms have been pulled and uses moisture in either damp or ‘green’ concrete to cure. Vulkem 24 SSL provides exceptional wear- and tear-resistance required in high traffic areas and allows continuous immersion in non-chlorinated water, according to the company.

UGL manufactures a variety of caulks and sealants for all types of home-repair jobs. Drylok masonry crack filler seals and waterproofs cracks in concrete sidewalks, walls, steps, floors, replaces cracked mortar joints and dries to color of concrete. UGL’s Tub and Tile caulk waterproofs around tubs, sinks and showers. This mildew resistant, non-staining compound stays white and provides excellent adhesion to most building materials, according to the company.

The most recent SCIGRIP product launch is SG100, an improved white UV resistant methacrylate adhesive. “This product is very popular in industries such as boat building and transportation where visual aesthetics are important and blue, gray or black adhesives are unsightly,” said Darnell.  “The most exciting news for SCIGRIP is the continued expansion of the number of products manufactured in our Washington, UK facility. Several key structural systems that have a very successful history in the U.S. are now being manufactured and shipped directly from the UK plant. This dramatically shortens the lead time and increase product shelf life for both our UK and European customers. It also provides the peace of mind to our global customers that our products can be made in two different locations with reliable consistency.”

Henkel has recently improved on a number of its adhesives. Loctite 403, 408 and 460 have been improved and can be used for bonding a wide variety materials. Already market leaders in terms of health and safety, these products now offer even better performance, according to Henkel. The three Loctite instant adhesives are suitable for bonding almost all materials, from plastic through metal to rubber. Thanks to a special formulation, they do not irritate the skin, nor does their safety data sheet list any hazard symbols or chemical substances that pose a risk to health. In launching these improved products, Henkel is strengthening its portfolio of innovative solutions with regard to occupational health and safety. The improved formulation has higher moisture tolerance and leads to a longer lasting bond.

For the construction market DAP has launched the Spec Line, the first full line of sealants and adhesives designed specifically to help professionals meet industry specifications for each job by including the required spec as part of the product name. With numeric labels that match federal specification standards, professionals can now easily select the best product for the application and take the guesswork out of the purchasing process. The DAP Spec Line also includes the Performance Facts on the product, mimicking the layout of a nutrition label. The Performance Facts include the amount and coverage per cartridge, recommended use, features and specifications, among other details. The DAP Spec Line bundle of products includes DAP Dynaflex 230, DAP Dynaflex 800 and DAP Dynaflex 920 to seal, DAP Dynagrip 557, DAP Dynagrip 3498 and DAP Dynagrip FRP to adhere and DAP Draftstop 812 to install. 

To help professionals and do-it-yourselfers weatherize and make home improvements faster, DAP Products Inc. has introduced the newly-formulated DAP 3.0.  DAP 3.0 establishes first-to-market technology with high-performance sealants that are both paintable and water resistant in 30 minutes.  DAP 3.0 is low odor and VOC compliant, backed by a lifetime guarantee.
Designed to address a wide range of sealing applications in kitchens and baths, around windows, doors, trim and siding, and on concrete and masonry surfaces, the new line of project-oriented sealants includes several distinct formulations: DAP 3.0 Kitchen, Bath and Plumbing Sealants, DAP 3.0  Window, Door, Trim and Siding Sealants and DAP 3.0  Self-Leveling Concrete and Masonry Sealant.

Henkel acquires Cytec's pressure sensitive adhesives product range

Henkel recently acquired the high-performance pressure sensitive adhesives (PSA) product range from the U.S.-based specialty chemicals company Cytec Industries Inc. Pressure sensitive adhesives are specialized adhesives used in the packaging, automotive, electronic and durable goods industries for foils and films, tapes or labels offering high performance adhesive characteristics. The acquisition strengthens Henkel’s position in the area of high-sensitive adhesives as the acquired product range is complementary to Henkel’s well established high-performance PSA business. In fiscal 2011, Cytec’s PSA product range generated sales of $94 million. The business includes approximately 80 employees.

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