The water-based adhesive market size is estimated at USD 15.3 billion in 2018 and is projected to reach USD 20.2 billion by 2023, at a CAGR of 5.7%. This growth is attributed to the high demand for water-based adhesives from the tapes & labels, paper & packaging, and woodworking applications.
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The major players operating in the water-based adhesive market include Henkel (Germany), Arkema (Bostik) (France), H.B. Fuller (US), and Sika (Switzerland). The key growth strategies adopted by these companies include investment & expansion, merger & acquisition, partnership & collaboration, and new product launch.
Henkel holds the leading position in the water-based adhesive market. The company offers a wide range of water-based adhesive products for the automotive & transportation, building & construction, woodworking, electronics, and energy and utilities industries. It focuses on both organic and inorganic growth to increase its production capacity, sales, and market share. For instance, in July 2017, the company acquired Darex Packaging Technologies (US), a supplier of high-performance adhesives, sealants, and coatings for the metal packaging industry. With this acquisition, the company expanded its market position and strengthened its adhesive technologies business.
H.B. Fuller is one of the key companies in the water-based adhesive market due to its strong product portfolio and new product launches. The company offers water-based adhesives for various applications in the assembly, packaging, converting, nonwoven and hygiene, performance wood, flooring, textile, flexible packaging, graphic arts, envelope, transportation, electronics, medical, clean energy, appliance, heavy machinery, audio equipment, and automotive sectors. It acquired four companies, namely, Royal Adhesives and Sealant (US), Wisdom Worldwide Adhesives (US), Cyberbond (Germany), and Advanced Adhesives Pty (Australia), to strengthen its market position and enhance its technology portfolio. In October 2017, the company acquired Royal Adhesives & Sealants (US), which helped its customer with a broader product portfolio along with expanded development and production capabilities.
Water-based adhesives are manufactured by the emulsification and polymerization of resins, such as polyvinyl acetate (PVA) emulsion, vinyl acetate ethylene (VAE), and acrylic polymer emulsion, in water. They are generally free from solvents and hence are non-toxic and non-flammable. These adhesives are mainly used to join porous materials such as paper, cloth, and wood. The water-based adhesive market size is estimated at USD 15.3 billion in 2018 and is projected to reach USD 20.2 billion by 2023, at a CAGR of 5.7%. The increasing use of water-based adhesives in various applications such as tapes & labels, paper & packaging, and woodworking is majorly driving the market.
The water-based adhesive market is highly regulated and driven by environmental regulations in APAC, Europe, and North America. For instance, the European Union directive 2004/42/EC was created to minimize, monitor, and control the harmful effects of VOCs. It states that any water-based product (adhesives, fillers, paints, primers, or decorative materials) manufactured in Europe cannot contain more than 30g of VOCs content per liter of the total volume. The AgBB Committee, which was founded in 1997 by the Working Group on Environment-related Health Protection, has developed certain criteria for the testing and evaluated scheme for VOC emissions from building products that are suitable for indoor use. Also, in the US, EPA has finalized a rule mandating the VOC limits for a wide range of consumer products that include adhesives and sealants. Hence, the major players are focusing on R&D to innovate products across various applications. Recently, in March 2017, H.B. fuller expanded its operations in India by opening an R&D center at its plant in Shirwal, Pune. The new R&D center focuses on conducting experiments, running demonstrations, and training customers on its hot melt, water-based, anaerobic, and cyanoacrylate technologies. The expansion also strengthened the company’s business in India and the neighboring countries.
Based on resin type, the acrylic polymer emulsion segment is estimated to account for the largest share and is also projected to register a high CAGR during the forecast period. Acrylic polymer emulsion is a water-based emulsion, which provides excellent adhesion to different substrates. This leads to its use in a wide variety of packaging applications, such as bookbinding, paper bags, cartons, labels, foils, films, paperboard decals, wood assembly, automobile upholstery, and leather binding.
On the basis of application, the tapes & labels application segment is estimated to account for the largest market share, in terms of volume, in 2018. This growth is attributed to the extensive use of water-based adhesives in applications such as medium & heavy-duty carton sealing, gift wrapping & decoration, general purpose repair, bundling & strapping, and stationery. Rapid urbanization, increasing consumer awareness, and growth of the e-commerce industry have also propelled the growth of the water-based adhesive market.
Based on region, APAC is projected to register the highest CAGR in the water-based adhesive market during the forecast period. China leads the water-based adhesive market in APAC. Countries such as China and India are likely to lead the growth in this region. The high usage in various industries and presence of manufacturing facilities of major key players such as Henkel (Germany), Sika (Switzerland), Arkema (Bostik) (France), and H.B. Fuller (US) in APAC is driving the market. There is continuous development of new products in the region, which is also supporting the growth of the market. With a projected high GDP rate in the next five years, India is expected to witness high growth in the economic and infrastructural segments. This will contribute to the growth of the water-based adhesive market.
Established water-based adhesive manufacturers in Europe are further expanding their presence in APAC through the strategies of investment & expansion and partnership & collaboration to tap the emerging opportunities. Major players such as Henkel (Germany) and H.B. Fuller (US) have framed their strategies to lay more importance on penetrating and creating a base in these emerging markets.