Market Trends of Adhesives And Sealants Industry
Packaging Industry to Dominate the Market
- The packaging segment is the largest consumer of the adhesives and sealants market. The packaging industry is witnessing strong demand from end-user industries, such as food and beverages, cosmetics, consumer goods, stationery, etc.
- The current rise in oil costs favors paperboard over plastics, finally giving paperboard an advantage, plateauing at 41% of the worldwide packaging sales for a decade, even as the share of plastic increased by 5% to 37% during the same period.
- As per the CEPI, the European Union's member countries collectively produced 84.8 million tons of paper and board in 2022. In 2022, there was a decline in nearly all paper and board categories, except for household and sanitary grades, which exhibited notable exceptions. Concurrently, paper consumption demonstrates rated stability despite the economic slowdown experienced in the European Union.
- In the United States, the differential growth across materials and formats is a by-product of the shifting consumer behaviors and product innovation within the market. This drives the fundamental shifts in the packaging industry.
- The beverage industry in the United States has experienced substantial growth as a result of shifting trends in consumer habits. According to PMMI's Beverage Report, the North American beverage industry is expected to grow by 4.5% during the period of 2018 to 2028. Sellers are anticipated to achieve the major portion of beverage sales in North America.
- The increase in the use of internet technologies and web applications support the growth of online retail shopping. This phenomenon supports the growth of the packaging industry.
- The demand for cosmetics and food and beverage products is expected to increase due to the growth in population, the demand for quality products, urbanization, and the consumers’ inclination toward technology. This factor is fueling the demand in the packaging industry.
- Hence, the demand in the adhesives and sealants market is expected to increase due to the robust growth of the global packaging industry during the forecast period.
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Asia-Pacific Region to Dominate the Market
- The Asia-Pacific region dominated the global market. The increasing demand from industries such as packaging, construction, automotive, healthcare, etc., in countries such as China, India, and Japan is driving the market.
- China's growth is fueled mainly by rapid expansion in the residential and commercial building sectors and the country's expanding economy. China is encouraging and enduring a continuous urbanization process, with a projected rate of 70% by 2030. As a result, increased building activity in nations like China is projected to fuel the region's adhesive industry. All such factors tend to increase the demand for adhesives across the region.
- Industries such as food and beverage, cosmetics, and consumer goods are continuously innovating new products, increasing production, and resorting to attractive packaging materials to attract customers. For example, in India, the packaging category is the highest end-user category, holding about 67% of total adhesive users.
- According to the Indonesian Packaging Association, the majority of demand is made up of flexible and rigid plastic packaging, driven by the domestic food, beverage, and pharmaceutical industries.
- The adhesives are an excellent substitute for nuts & bolts used in the automotive and aerospace industry, and hence, their increasing application automatically minimizes the overall weight of the vehicle.
- As per OICA, the Global Automotive Industry is currently growing at a substantial rate of 6% in 2022 over 2021. In 2022, various developed and developing countries across the world, including China, Germany, South Korea, Canada, the United Kingdom, and Italy, experienced an increase in automotive production. In 2022, over 85 Million Units of Motor vehicles were manufactured.
- Furthermore, several countries in the region are putting efforts into enhancing the automotive sector by investing heavily in electric cars to achieve net zero emissions. For example, as of 2022, approximately 3% of passenger cars sold in Japan were electric vehicles, increasing by 1.8% compared to the previous year.
- Construction activities are growing in the region with the lockdown measure eased up. The area is always at the forefront of infrastructure development and is expected to witness growth in funding for construction activities in the forecast period, hence driving the market.
- As per Invest India, the Indian construction industry is expected to reach USD 1.4 Trillion by 2025, and the construction industry in India works across 250 sub-sectors with linkages across sectors and over 54 global innovative construction technologies identified under a Technology Sub-Mission of PMAY-U to start a new era in Indian Construction Sectors.
- According to the National Bureau of Statistics of China, the value of construction output accounted for CNY 31.2 trillion (USD 4.5 trillion) in 2022, up from CNY 29.31 trillion (USD 4.2 trillion) in 2021. Moreover, as per the forecast given by the Ministry of Housing and Urban-Rural Development, China’s construction sector is expected to maintain a 6% share of the country’s GDP going into 2025.
- Furthermore, South Korean builders' overseas building orders have surpassed 30 billion US dollars for the third consecutive year in 2022, owing to strong demand from Asia, North America, and the Pacific Ocean regions.
- Hence, such market trends are expected to significantly impact the growth of the adhesives and sealants market in the region during the forecast period.
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