Indian Adhesive & Sealant Industry
Indian Adhesive & Sealant industry is about ₹13500cr. It can be categorized into:
1) Industrial Adhesives : caters to B2B industries such as Packaging, Footwear, Paints, Automotive, etc
2) Consumer/ Bazaar Adhesives: caters to industries such as Furniture/Woodwork, Building Construction, Arts and Craft, Electrical fittings, etc.
The report by CRISIL is primarily focused on Consumer/Bazaar Adhesive.
The adhesives and sealants market grew at a CAGR of 8-9% between FY15-FY20.
Consumer/Bazaar Adhesive market: The Indian consumer adhesive market grew at the rate of 8-10% between 2015-20 and currently estimated to be valued around ₹5400cr.
Furniture/Woodwork is the largest user for consumer adhesives, constituting ~53% of the market in FY21, estimating the market at ₹2850cr.
India’s consumer adhesives industry is expected to clock 9-10% CAGR between fiscals 2021 and 2026 driven by economic recovery and growth in end-user industries.
Consumer adhesive market can be split into 3 types based on the technology they uses:
1) Water Borne Adhesives: PVA (poly vinyl acetate) is a water-borne adhesive. It individually dominates the market (26-28% of revenue) due to growing application in woodwork and furniture industry.
2) Solvent-borne adhesives: PVC solvent cement is used for joining PVC pipes in the irrigation and building construction segments.
SBR (styrene butadiene rubber) is used as a sprayable adhesive for foam and mattress applications.
Chloroprene rubber has a wide range of applications from wood working to leather to foam applications, forming 12-14% of the market.
3) Reactive adhesives: This category dominated by epoxy adhesives (15-17%). These also find application in the furniture, woodworking and tiling industries. They are used for their water and heat resistance along with durability.
Among Cyanoacrylates, FeviKwik is a well known name. They are used for bonding plastics, metal and rubber components. These are used in molded furniture, signboards and a wide range of industrial applications.
Silicone sealants are are liquid adhesives. Their strong adhesive bonds resistant to chemicals, moisture and weathering, and are widely used for basic household repairs and areas around the sink or any piping due to their water-resistant nature.
Amongst the Consumer adhesive market, PVA dominates in terms of its application in the furniture market. Lately, chloroprene rubber (Belonging to Solvent borne category) has also gained significance in wood and joinery applications due to lower prices and faster drying properties. But, Growing awareness of environmental friendliness of water-based adhesives has led to the sustenance of PVA demand.
The silicone sealants segment is also expected to witness healthy growth driven by rising construction investments and their wide application in sanitary ware and household repairs owing to superior properties.
Healthy growth in the pipes and fittings market due to rising construction activity, coupled with rapid increase in irrigation spends and replacement of metal pipes will drive demand for PVC solvent cements.
Key Demand Drivers for Consumer adhesive segment:
Rising demand for wooden furniture to drive demand: driven by work-from-home and online classes of children. The pandemic made it necessary for everyone to stay inside their homes to prevent the spread of the virus, which led to a boom in household furniture demand.
Demand for electronics to witness a sharp growth of 19-24% CAGR: The electronics industry uses adhesives for various applications, including conformal coatings, protecting terminal electrodes, bonding of surface mount devices, among many others.
Infrastructure and increasing spending on building construction to drive construction activity: The construction industry makes use of adhesives and sealants across various applications, such as flooring and carpets, tile insulation, garage doors, resilient flooring, wall covering, pre-finish panels, perimeters of doors, drywall, lamination, and fixed window frames, among others. These applications primarily make use of three types of adhesives and sealants, namely epoxy, silicone and cyanoacrylates.
Increasing demand for non-hazardous, green and sustainable adhesives
Key players in respective categories:
While 'Pidilite Industries' and 'Astral Adhesives' are present across all consumer adhesive categories, the rest of the players have presence across 2-3 categories only
Indian PVC (polyvinyl chloride) adhesives market
Since the report was prepared by Crisil for the IPO of HP Adhesive. HP Adhesive has its largest presence in PVC solvent cement.
PVC adhesives, also known as PVC solvent cement, are adhesives, which are used for joining PVC pipes. The process is similar to welding, since it melts two pieces of PVC into a single piece.
A PVC adhesive consists of :
1. PVC resin
3. Methyl ethyl ketone – which breaks the top layer of the pipes and fittings to be joined together.
The largest application of PVC adhesives is in the PVC pipes industry, where it is widely used to join pipes.
There are three broad product categories in the PVC adhesives market –PVC, u-PVC and CPVC, based on the category of pipe they are used for. Similar to PVC pipes, the PVC adhesives business is a largely B2C business, where the key customers are applicators, including contractors/plumbers, which are in charge of installing and fixing the pipes and fittings at a particular site.
The market size of the Indian PVC adhesives market was Rs 681cr as of FY20 while in fiscal 2021, the market de-grew by ~9% to Rs 620cr mainly due to pandemic induced lockdowns.
The market has both core manufacturers and pipes and fittings players who have entered the PVC adhesive manufacturing space. While leading manufacturers include HP Adhesives Ltd., Astral Adhesives, and Ashirvad Pipes Pvt. Ltd., the latter category has Prince Pipes, Apollo Pipes, Jain Irrigation, and Supreme Industries, among others. However, these players manufacture very small volumes as compared with core manufacturers.
HP Adhesives Ltd. is the largest manufacturer, having 14-16% market share followed by Astral Adhesive with a share of 11-13%. Both players offer a wide range of solvent cements for various types of plastic pipes and fittings. Pidilite Limited and Ashirvad Pipes Pvt. Ltd. are also among the major manufacturers of PVC adhesives in the Indian market.
Please find here the link to the report: