The demand for adhesives and sealants in Latin America has been primarily driven by Brazil, which is one of the fastest growing economies in the world. Brazil is all set to host the FIFA World Cup in 2014 followed by the Olympics in 2016. Organizing such large-scale international events is likely to stimulate continuous demand for adhesives and sealants from various end-use industries such as construction, packaging, and furniture. In addition, Brazil is also emerging as one of the fastest growing markets for automobiles and is expected to be included in the top five auto markets of the world by 2015. Other Latin American countries such as Mexico and Argentina are also emerging as automobile manufacturing hubs of the West. Major auto manufacturers in Brazil are shifting their manufacturing bases to Latin American countries to harness the benefits of cheap labor and flexible regulations in the region. However, volatility in raw material prices coupled with growing environmental concerns regarding the use of petrochemical based adhesives and sealants is expected to hinder market growth over the next six years. In order to minimize such effects, the industry has shifted its focus towards developing bio-based alternatives to adhesives and sealants which provides an environmental friendly substitute to synthetic adhesives and sealants.
Water-based adhesives emerged as the leading technology used in Latin America and accounted for 48.3% of total market volume in 2013. Along with being the largest technology segment, water-based adhesive is also expected to be the fastest growing technology in Latin America at an estimated CAGR of 6.6% from 2014 to 2020. Hot melt adhesives followed water-based adhesives and accounted for 21.1% of total market volume in 2013. Solvent-based adhesives technology is expected to reach a market worth USD 225.4 million by 2020, growing at an estimated CAGR of 4% from 2014 to 2020.
Acrylic adhesives emerged as the leading product segment and accounted for 38.2% of total market volume in 2013. The most common acrylic adhesives are made from monomeric esters and from solutions of polyacrylates in the monomers. Acrylic adhesives have fast setting time, high adhesion for difficult to bond substrates and good environmental resistance. Acrylic adhesives are also expected to be the fastest growing adhesives at an estimated CAGR of 6.4% from 2014 to 2020. Acrylic adhesives were followed by PVA adhesives which accounted for 27.9% of total regional consumption in 2013. On the other hand, silicone sealants dominated the regional sealants consumption and accounted for 31.1% of total market volume in 2013. Silicone sealants are also expected to be the fastest growing product segment in the region at an estimated CAGR of 5.3% from 2014 to 2020.
Pressure sensitive applications emerged as the leading application segment in the region for adhesives and accounted for 26.9% of total market volume in 2013. However, owing to increasing disposable income level mainly in Brazil and Argentina is expected to push the demand for adhesives from furniture, making it the most lucrative market in the region. Demand for adhesives from furniture is expected to grow at an estimated CAGR of 6.6% from 2014 to 2020. On the other hand, construction dominated the regional sealants demand and accounted for 28.1% of total market volume in 2013. However, automotive is expected to be the fastest growing application segment in the region for sealants at an estimated CAGR of 5.9% from 2014 to 2020.
Brazil emerged as the leading market for both adhesives and sealants. Brazilian market for adhesives is expected to reach a market worth USD 1,168.6 million by 2020, growing at an estimated CAGR of 6.6% from 2014 to 2020. Brazil is followed by Argentina and Mexico which accounts for considerable amount of share in the regional market.