Foreign companies glimpse China's huge adhesive market

Some time ago, companies such as Henkel, Cytec, etc., in order to maintain their leading position in global adhesives, expand the market, reduce production costs, and implemented global cross-regional mergers and acquisitions. This regional strategic shift has benefited these companies because the growth rate of adhesive consumption in the developed regions is three times that of the United States and Western Europe. In 2002, the total consumption of development areas was 5.7 billion U.S. dollars. Except for Japan, Asia is the largest development area, and its adhesive consumption amounted to 3.5 billion U.S. dollars.

In 2002, Latin America consumed $1.3 billion in adhesives, with the largest users being Brazil and Mexico.
Although many Latin American countries are lagging behind due to the economic impact, their needs have begun to accelerate. In 2002, the sales volume of adhesives in Eastern Europe was US$600 million. With more countries joining the European Union, there was a strong growth trend. About 3 billion U.S. dollars are consumed in Africa and the Middle East.

One of the characteristics of changing the situation is to shift the production base to the developing market. In December 2003, Degussa announced that it will build a paint factory in Shanghai, China and a device for producing paint polyester. The company faces the fierce challenge of 1800 adhesives manufacturing plants in China. According to foreign comments, in 2002, the total output of adhesives and sealants in China was 2.89 million tons, an increase of 10.7%. Acrylate emulsion jumped 33.3%, hot melt pressure sensitive adhesives increased 34.6%, and silicones increased 55.2%. The reason why this is so rapid is not only that the labor force is cheap, but more importantly that China has a modern factory, which is much more efficient than the old United States.

On the contrary, the adhesive market in industrially developed regions is basically mature. Japan used 1.5 billion U.S. dollars in adhesives, but its annual growth rate is only 1%, and there is a downward trend. In 2001, production fell by 5.5% to 1.05 million tons, while in 2002 it dropped by 0.9% again to 1.04 million tons. Most Western European markets have also matured and are experiencing economic decline. Feica (European Adhesive Manufacturers Association) estimates that the growth rate will not exceed 2.5% in the next 5 to 10 years.