H.B. Fuller state of the U.S. Adhesive and Sealant Market 2014
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Transcript of H.B. Fuller state of the U.S. Adhesive and Sealant Market 2014
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An Overview of the North American Adhesive and Sealant Industry
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Content
1. Adhesive and sealant market overview
2. General trends impacting industry
3. H.B. Fuller view on trends
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Harmonized market definitions
(ASC-CATIA-FEICA)
Detailed definitions can be found at
www.ascouncil.org, under Industry Intelligence – Resources section
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2013 market size for adhesives & sealants
$42.5 billion (sales demand) global CAGR 3.2%
$11.8b
$8.7b
$1.6b2012-2015CAGR 4.3%
2012-2015CAGR 5%
$13.8b
$4.5b*
ROW = 2.1b
2012-2015CAGR 2.3%
2012-2015CAGR 3%
2012-2015CAGR 4.4%
2012-2015*CAGR 3%
Source: 2013 ASC/DPNA North America Market Report
Note 2: * = Calculated Average Growth Rates in % (CAGR) are based uponlbs. of material sold (Demand) – not revenue
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Adhesives market segment definitions
1. Paper, Board, Related Products
• Converting/packaging
• Dry and wet lamination
• High-gloss laminating for graphic arts
• Bookbinding, graphic arts industry
• Nonwoven fabrics
• Pressure sensitive products
2. Transportation
• Passenger cars/light trucks
• Repair, maintenance (aftermarket)
• Trucks, buses
• Bicycles, motorcycles and RVs
• Aircraft/aerospace
• Railway
• Shipbuilding and offshore
3. Footwear and Leather
• Footwear
• Leather goods
4. Consumer/Do-It-Yourself (Retail)
5. Building/Construction/Civil Engineering
• On-site applications
• Civil engineering
• Factory assembled parts
• Prefabricated houses
• Thermal insulation materials, curtain
wall panels, etc.
6. Woodworking and Joinery
• Cabinet making
• Furniture manufacture
• Window frames, door manufacture
• Upholstery
7. Assembly Operations
• Sandwich panels
• Appliances and electrical/electronic
• HVAC
• Fabric/apparel
• Medical applications
• Sports equipment and toys
• Abrasives, filters
Source: ASC Market Report
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North America
(Percent Share of Adhesive and Sealant Demand)
Value: $11.86 Billion
Formulated Product Demand: 7.9 Billion Lbs. 3.6 Million MT
2012-2015 AGR: 2.3%
Source: ASC/DPNA International Inc.
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North America market statistics 2013 estimated
Source: ASC/DPNA International Inc.
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North America adhesive market: 2013 est.
Value: $10.13 Billion
Formulated Product Demand: 7.20 Billion Lbs. 3.3 Million MT
2012-2015 AGR: 2.2%
Source: ASC/DPNA International Inc.
Paper, etc., 58.8%
Transportation 5.3%
Footwear 0.5%
Consumer 2.8%
Bldg. & Const. 14.1%
Woodworking 8.3%
Assembly 10.2%
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North America outlook: 2014 adhesive market growth
forecast estimates
Paper, Board and Related Products 2.0%
Consumer/DIY 3.0%
Woodworking/Joinery 2.7%
Assembly 1.8%
Footwear and Leather 2.2%
Building and Construction 2.4%
Transportation 3.1 %
(Annual growth in pounds of consumption)
Source: ASC/DPNA International Inc.
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Sealants market segment definitions
1. Transportation
• Passenger cars/light trucks
• Trucks, buses, trailers
• Repair and maintenance (Aftermarket)
• Commercial, recreational watercraft
• Aircraft/aerospace
• Railway
• Ships
2. Consumer/Do-It-Yourself (Retail)
• Household
3. Construction
• Construction/renovation
• OEM, maintenance
• Insulating glass/glazing
• Civil engineering, infrastructure
4. Assembly Operations
• Appliances
• Electronic equipment
• Metal cabinets and housing
Source: ASC/DPNA International Inc.
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North America sealant market: 2013 est.
Value: $1.734 Billion
Formulated Product Demand: 716 Million Lbs. 325 K MT
2012-2015 AGR: 2.3%
Source: ASC/DPNA International Inc.
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North America outlook: 2014 sealant market growth
forecasts
Assembly/Other 2.7%
Consumer/DIY 1.4%
Transportation 2.4%
Building & Construction 1.8%
(Annual growth in pounds of consumption)
Source: ASC/DPNA International Inc.
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Trends the Adhesives and Sealants Council (ASC) is
monitoring
• Growth of mergers and acquisitions
• Transparency in chemical formulations
• U.S. shale oil and gas production
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Trends ASC is monitoring
Mergers and acquisitions continue to drive value within
North America – and the world
Forbo and Tonsan
ADCO, APS and Clifton
ISP and Hercules
$5.5 billion in cash
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Trends ASC is monitoring
Expecting more transparency in chemical disclosure
• NGO and regulatory agencies are increasingly adopting hazard-
based tools and requiring companies to disclose chemical make-
up/footprint
• ASC collaborating with industry to ensure risk models are
included for more accuracy
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U.S. oil and gas production provides raw material
capacity
Fracking oil rich shale deposits + natural gas availability is providing
United States with strong capacity for major raw material feedstocks
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After 30 years of production decline, the U.S. is
producing crude at 20-year highs
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Fracking is allowing for growth
Source: North Dakota Department of Mineral Resources
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And it’s not just oil…
Rising Shale Gas Production:
Marcellus: 11.5 BCFD
Barnett: 4.4 BCFD
Eagle Ford: 3.9 BCFD
Fayetteville: 2.9 BCFD
Woodford: 1.6 BCFD
Bakken: 0.6 BCFD
Rese of US: 3.6 BCFD
Peaked:
Haynesville
Peaked November 2011
Antrim
Declining Since 2000
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Ethylene impacts key raw material supply
Heavy feeds
100/160
Eth
yle
ne
By-p
rod
ucts
Steam
Cracking
Process
Ethylene
Butadiene
Isoprene
Resin Oils
Aromatics
Gas
Feed (Light)
Liquid
Feed(Heavy)
Light feeds
100/25
Eth
yle
ne
By-p
rod
ucts
Critical to
Adhesive
Polymers
By-products
propylene
crude C4s
pygas
Polypropylene(film grade)
Economic
Driver
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Benefits to U.S. adhesive and sealant formulators
• Raw materials sourced from light feeds more supply stable
• Formulations based on light feed expected to provide most price stability
• Solid competitive framework for industry
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H.B. Fuller View on Trends in Key Growth Markets
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The markets H.B. Fuller serves
Packaging AutomotiveBuilding and
ConstructionHygiene
General
Assembly
Paper
ConvertingConsumer
Products
Woodworking Emulsion
Polymers
Electronic
and Assembly
Materials
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Targeted growth in key markets
HygieneBaby diapers, Feminine products, Adult incontinence
PackagingConsumer Packaging, Labeling, Flexible Packaging, Packaging Integrity
Durable AssemblyAutomotive, Water Filters, Panel Assembly, Electronic & Assembly Materials, Engineered Textiles, Insulating Glass
Construction ProductsResidential, Remodel, Commercial and Industrial Construction, including Ceramic Tile and Flooring Installation
Global visionStronger teamworkBetter accountability
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Hygiene industry market trends
Healthy
Comfortable
Safe
Convenient
Premiumisation
• Low odor
• Breathable
• Natural materials (pure cotton or cotton containing top sheets)
• Soft hand feel
• Moisture management
• Thinner is better
• Leak-proof
• Stretchable waistband or ears for baby diapers
• Wetness indicator becoming the norm
• Consumers demanding higher quality
• Looking for value-added features
• Easy to wear and change
• Online shopping more and more popular
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Packaging industry market trends
• Packaging integrity through supply chain
• Wider operating temperature window
• Adhesion to a variety of substrates
• Hassle-free adhesives for ease of use
• Food safety
• Use of bio-degradable and recyclable materials
• Reduce dependency on volatile natural raw materials
• Improved mileage
• Down-time reduction
• Lower total cost in use
Durable
Adaptive
Efficient
Economic
Sustainable
• Reduce non-value added manual labor
• Faster line speeds
• Clean machining
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Durable assembly market trends
• Consistent performance
• Proactive problem solving - FMEA
• Leaner
• Faster
• Thinner
• Implementation of industry standards
• Bluesign / Ecopassport for textile
• NSF for drinking water elements
• UL for air filtration
• VOC reduction
• Commitment to environmentally-friendly solutions from manufacturer to consumer
• Sustainable materials
Reliable
Innovative
Standardized
Sustainable
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Electronics industry market trends
• Smaller, thinner devices
• Lighter weight devices
• Wearable, portable devices
• Flexible, touchable and reliable devices
• Functionality in watch, shirts and shoes
• Fashion forward, trendy
• Challenging substrates
• Appearance
• Ability to function in today’s active lifestyle
• Durable and long lasting
• More functionality while devices get smaller
• High performance under extreme conditions
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Compact
Wearable
Fashion
Multifunctional
Reliable
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China manufacturing trends
• Labor costs increasing in mainland China
• Shift from low cost to high quality mentality
• VOC reduction
• Industry standards developing
• Greener solutions desired
• Employee safety a priority
• Business ethics becoming more important
• Conversion from solvent-based technology to environmentally-friendly solutions
• Manufacturing excellence
• Process improvement to drive efficiencies
• Shift from price per unit to total cost of ownership focus
• Moving from coastal provinces to lower cost inland provinces is encouraged by Chinese government policies
• Some labor intensive manufacturing moving to lower cost countries such as textile and footwear industries
Automation
Green
Safe
Cost Effective
Relocation
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Thank You!