Adhesives and Sealants Market

Market Overview

The global adhesives and sealants market size was valued at USD 68,371.03 million in 2022. It is estimated to reach USD 110,604.74 million by 2031, growing at a CAGR of 5.49% during the forecast period (2023–2031).

Adhesives are substances that firmly and indefinitely join at least two surfaces. Materials known as sealants attach to at least two surfaces and fill the space between them to create a barrier or protective coating. Adhesives and sealants are versatile products frequently used in industrial sectors ranging from plastic packaging and textile to structural applications because of their excellent bonding strength. Both adhesives and sealants are produced using comparable techniques and substances, and both have a wide range of uses. Materials known as sealants are semi-solid and are primarily used to stop fluid leaks.

Adhesives offer a barrier or protective coating by bridging gaps between substrates to seal joints and components. Adhesives and sealants are frequently used on various materials, including metals, wood, glass, and plastics. These products are based on multiple formulations: organic, inorganic, acrylic, polyurethane, and silicone. Electronics, aerospace, automotive, food and beverage, and transportation are just a few industries that use adhesives and sealants. Although sealants are flexible, adhesives are stronger. As a result, they are employed to both fill in gaps and hold substrates in place.

Highlights

• Adhesives dominate the type segment
• Water-based dominates the adhesives by technology segment
• Paper and packaging dominate the end-user segment
• Asia-Pacific is the highest shareholder in the global market

Market Dynamics

Market Drivers

Surging Demand from Building and Construction Industry

The higher demand for adhesives and sealants is attributable to the growth of the robust construction and packaging industry. Adhesives and sealants are commonly used to lay carpets, install wallpapers and insulation systems, bond curtain wall panels, or insulate glasses. They are also used for countertop lamination, ceramic tiles, underlayment, drywall lamination, manufactured housings, pre-finished panels, resilient flooring, roofing, and wall coverings. Rapid population expansion and urbanization in developing countries such as China, India, Brazil, Indonesia, Mexico, and Bangladesh have greatly accelerated the demand for adhesives and sealants.

According to estimates, between 2020 and 2030, around 43 million new houses will be built each year worldwide. From USD 9.5 trillion in 2014, global spending on construction went up to USD 12 trillion in 2019, witnessing steady and robust growth. This growth is expected to continue strongly in the coming years due to the expanding population and middle-class economy. Thus, the unprecedented growth across the construction and building industry is expected to drive the development of the global market.

High Demand from Packaging Industry

The paper and packaging industry is one of the major consumers of adhesives. The paper and packaging industry offers various products; therefore, many types of adhesives are built for specific applications. In 2019, the global packaging industry was valued at USD 917.1 billion, expected to grow at a CAGR of 2.8% to reach USD 1.05 trillion by 2024. In addition, factors such as rising incomes, an increasing pace of urbanization and infrastructure development, and expanding population in various developing regions of Asia, the Middle East, Europe, and Africa are driving the growth of the packaging industry.

Furthermore, the packaging industry in these regions will witness higher growth than the world average. Transit packaging is one of the major packaging industry segments and involves using corrugated boxes to transport various products. The demand for transit packaging solutions is expected to grow steadily in the coming five years due to the rising trend of e-commerce. Thus, the packaging industry is a crucial global driver.

Market Restraint:

Environmental Regulations and Standards

The increasing focus on sustainable product development has contributed to strict regulations for using Volatile Organic Compounds (VOCs) in adhesives and sealants worldwide. However, most of these regulations are tighter in North America and Europe. For instance, the South Coast Air Quality Management District (SCAQMD) has adopted Rule 1168 for adhesive and sealant applications. The rule came into effect on April 7, 1989, and since then has been amended several times between 2015 and 2018 to include stricter regulations. Similarly, in 2008, the Environmental Protection Department (EPD), a Hong Kong government department, also introduced a proposal to control VOC emissions from adhesives and sealants. Such factors are expected to hinder market growth.

Market Opportunities:

Rising Demand in the Asia-Pacific Countries

Asia-Pacific will emerge as a significant market for adhesives and sealants due to the ongoing industrialization and urbanization projects in countries such as China, India, Indonesia, and Thailand. The increasing income of the middle class, rising frequency of construction activities, and surging demand from the automotive and packaging industry will drive market growth in these countries. Several players in the automotive industry use adhesives and sealants as alternatives for welding to reduce manufacturing costs and the weight of vehicles.

Adhesives and sealants enable automotive players to ensure better fuel economy. Similarly, the paper and packaging industry is one of the significant markets for adhesives and sealants. Also, conventional fastening and joining solutions are replaced with adhesives and sealants in many construction activities. Using adhesives and sealants in construction activities offers durable bonding and ensures lower complexity and demand for human resources. Thus, the increasing use of adhesive sealants by various end-user industries in the Asia-Pacific region is estimated to provide lucrative opportunities for the market to grow.

Regional Analysis

Asia-Pacific Dominates the Global Market

Based on region, the global adhesives and sealants market is bifurcated into North America, Europe, Asia-Pacific, Latin America, and the Middle East and Africa.

Asia-Pacific is the most significant global adhesives and sealants market shareholder and is expected to grow at a CAGR of 5.64% during the forecast period. Asia-Pacific has emerged as the largest market for adhesives and sealants among all regions. This growth is attributable to factors such as the rising population, rapid urbanization, increase in demand from several industries such as construction, electronics, packaging, medical, and healthcare. In addition, China has been the leading market in Asia-Pacific, followed by India. The healthy growth of these countries' industries, such as construction, packaging, automotive, and healthcare, has propelled the regional adhesives and sealants market growth. Moreover, factors such as population migration from rural to urban areas and the need for affordable housing drive construction activities in China, thereby contributing to regional market growth.

Europe is anticipated to exhibit a CAGR of 5.47% over the forecast period. The major end-user sectors for adhesives and sealants in Europe are building and construction, paper and packaging, industrial assembly, and transportation, with half of the products used in industrial applications. The rising trend of e-commerce applications has led to strong demand in the paper and board packaging end-use segment. In addition, according to FEICA, COVID-19 had a mixed effect on the industry and will foster the growth of paper and packaging, healthcare, and medical technology industries, while negatively impacting the building and construction and automotive and transportation industries. Although the COVID-19 outbreak adversely affected the building and construction sector in 2020, the rising demand for eco-friendly materials due to the focus on sustainable development will drive the market's growth.

The key drivers for the North American market include the rising demand from various sectors, such as building and construction, transportation, electrical and electronics, and paper and packaging. The building and construction sector in the region is expected to account for the highest consumption of adhesives and sealants. However, the shifting focus toward bio-based adhesives and sealants is a key opportunity for vendors in the future. The rising trend of flexible packaging, healthcare and hygiene products, and medical technology devices will also drive the demand for adhesives and sealants.

In addition, the US has been witnessing a steady rise in the consumption of adhesives and sealants due to significant growth in the construction and packaging industry. Likewise, the US is one of the largest construction markets globally and is expected to be a significant player alongside India and China, thereby driving market growth. Some major North American adhesives and sealants market companies include 3M, Arkema Group, Sika AG, Henkel AG & Co., and HB Fuller.

Latin America is an emerging market with rapidly growing economies such as Brazil, Argentina, Colombia, and Mexico. There is an increased emphasis on and popularity of polyurethane-based sealants. These sealants are widely used in the category for the new and renovation of construction projects. There have been investments in R&D to lower isocyanate content, improve the slump resistance, and ensure product safety for easier applications. The automotive and construction sectors fuel the region's growth of adhesives and sealants. Owing to various environmental concerns, several bio-based adhesives and sealants will find a significant share in the market during the forecast period.

Segmental Analysis

The global market is bifurcated into type, adhesives by technology, sealants by structure, and end-user.

Based on type, the global market is divided into adhesives and sealants. 

The adhesives segment accounts for the largest market share and is anticipated to grow at a CAGR of 5.69% over the forecast period. Adhesives are materials that hold two substrates together in a manner that resists separation. Based on usage, adhesives may be used to hold different or the same substrates. Also, adhesives can be classified based on various technologies and used for different applications based on their formulation. Waterborne adhesives, solvent-borne adhesives, reactive adhesives, hot melt adhesives, and pressure-sensitive adhesives are prominent industry technologies.

In addition, adhesives and sealants are predominantly used in the healthcare sector as they have significant applications in dentistry and the medical and pharmaceutical sectors. The assembly of modern medical equipment requires adhesives, offering tremendous potential for their application. Factors such as diversified applications, innovations in bio-based adhesives, and a rise in demand from markets such as Asia-Pacific will boost the consumption of adhesives during the forecast period.

Based on adhesives by technology, the global market is divided into water-based, solvent-based, hot melt, reactive, pressure sensitive, and other. 

The water-based segment is the most significant contributor to the market and is estimated to exhibit a CAGR of 6.77% over the forecast period. Adhesives formulated by water-based technology are based on environment-friendly solutions for adhesion. They generally contain negligible volatile organic compounds (VOCs), making them suitable for regulations and standards. They form a bond between two substrates, either when the water is evaporated or absorbed by the latter, thus leaving behind only adhesive. They generally possess good heat and water resistance and are suitable for porous or non-porous substrates. They find vast applications in packaging and labeling. Based on chemistry and resin types, waterborne adhesives are further classified as acrylic-based, vinyl acetate monomers (VAM) based, polyurethane dispersion-based, and styrene-butadiene latex.

Based on sealants by structure, the global market is bifurcated into silicone, PU, acrylic, polysulfide, butyl, plastisol, and others. 

The silicone segment owns the highest market share and is predicted to grow at a CAGR of 4.41% over the forecast period. Silicone-based sealants have excellent low-temperature movement capability and outstanding UV and heat stability. Although Acetoxy chemistry-based silicone sealants have a strong odor, the newer chemistries have relatively lower odor levels. Silicone sealants are available as high, medium, and low modulus and may stain some natural stones without primers. In addition, significant applications of such sealants include protecting glazing systems, insulating glass units, and improving thermal performance in missile impact and bomb blasts. Major market players for sealants, in general, are Henkel AG and Co., H.B. Fuller, ITW, 3M, and Sika AG, to name a few.

Based on end-user, the global market is divided into building and construction, paper and packaging, transportation, woodwork and joinery, consumer/DIY, footwear and leather, and others. 

The paper and packaging segment is the largest contributor to the market and is anticipated to exhibit a CAGR of 6.29% over the forecast period. Adhesives are used in paper bonding applications, including producing corrugated boxes or laminating printed sheets. They are also used to make bathroom tissues, paper towels, and books. Other crucial applications of adhesives and sealants in the packaging industry include bags, cigarettes and filters, cups, disposables, envelopes, flexible packaging, composite containers and tubes, specialty packaging, and labels.

From e-commerce transit to food and beverage, packaging has been predicted as a key growth engine for adhesives and sealants in the forecast period. Due to numerous advantages over rigid packaging, flexible packaging has grown tremendously in the last few years. Laminating adhesives are used extensively in flexible packaging, and with ever-growing growing manufacturing activities, there has been an increase in flexible packaging. Thus, it can be assessed that the paper and packaging industry has been and will be a crucial target market for adhesives and sealants during the forecast period.

Recent Developments

• January 2023- H.B. Fuller, one of the world's top adhesives manufacturers, introduced Swift®melt 1515-I, its first bio-compatible product complying with IMEA (India, Middle East, and Africa).

• February 2023- Nippon Paint Holdings Co., Ltd. (NPHD) announced that DuluxGroup Limited, its specified subsidiary, has committed to acquire 51 percent of the share capital of N.P.T. s.r.l. N.P.T. is a manufacturer and distributor of sealants and adhesives based in Italy.