South East Asian polyurethane (PU) adhesives market demand was 44.0 kilo tons in 2012. The growth of major end-use industries such as automotive, footwear, construction and packaging is expected to drive regional PU adhesives market over the next six years. Vietnam is one of the largest manufacturers of footwear in the world. Recently, leading footwear manufacturers have shifted their manufacturing bases to Vietnam from China and Bangladesh on account of cheap labor cost. This has impacted on the nation’s demand for PU adhesives. Increasing construction spending, particularly in Vietnam, Indonesia and Thailand is also expected to have a positive influence on the regional PU adhesives market growth. The emergence of Thailand and Indonesia as a major automobile manufacturing hub has also created new demand for PU adhesives in the region. Leading manufacturers have been forming partnerships with major end-use industry participants. Henkel one of the leading PU adhesives, manufacturers in the world, has been working with more than 80 direct customers linked with the automotive industry in Thailand. Thailand’s automotive industry has been growing at a tremendous pace and is pronounced to be “Detroit of the East” on account of its growing popularity as a major automobile hub. Volatility in petrochemical-based raw materials coupled with stagnant production levels to meet the domestic demand is expected to remain a key challenge for market participants over the next six years. The shift in consumer trend towards development of bio-based polyols is expected to yield opportunities for market participants. Biobased polyols along with providing a clean solution also provide a substitute raw material supply stream for PU adhesives manufacturers.
South East Asia PU Adhesives Market Volume by Application, 2012-2020 (Kilo Tons)
Footwear was the leading PU adhesives application segment and accounted for over one-fourth of total market volume in 2012. The surge in demand for innovative footwear designs is expected to have a positive influence on the overall market. South East Asian countries such as Indonesia and Vietnam are leading exporters of footwear worldwide. In addition, Vietnam footwear industry also enjoys the benefits of Generalized System of Preference (GSP) offered by EU. Trans-Pacific Partnership (TPP) is expected to provide numerous opportunities for South East Asian Footwear industry to access markets such as U.S. and Japan. Other PU adhesives applications include automotive, construction and packaging. Automotive is expected to witness the highest growth rate over the forecast period. The presence of major automotive manufacturers such as Toyota Motor, Honda, and Nissan in Thailand and Indonesia coupled with favorable government regulations in the form of financial subsidies is expected to remain a key driving force for the market over the forecast period.
Indonesia emerged as the leading national market in the region and accounted for just over one-third of total market volume in 2013. Growing population base with increased disposable income is expected to have a positive impact on the market over the forecast period. Indonesia is one of the fastest growing economies in the world which has been experiencing rapid growth in major end-use industries. Indonesia is all set to overtake Thailand to become the largest automotive market in South East Asia by 2015-16, which is expected to drive PU adhesives market in the nation. The growth of food & beverage industry in the nation is also expected to have a positive impact on the market growth over the next six years. Vietnam is expected to witness rapid market expansion and hence is anticipated to impact positively the regional PU adhesives market. Political instability and civil unrest in Thailand is expected to remain a key threat to the regional PU adhesives market.
South East Asia PU adhesives market is dominated by top multinational corporations and is moderately concentrated, with the top four manufacturing companies accounting for just below half of total market. Major market participants include 3M Company, Ashland Inc., BASF AG, Avery Dennison Corporation, Beardow & Adams (Adhesives) Ltd., The Dow Chemicals Company, Bostik SA, Eastman Chemical Company, Ellsworth Adhesives, H.B. Fuller Company, Henkel AG & Co. KGaA, Momentive Performance Materials Inc., ND Industries, Sika AG, Uniseal Inc. Most of the PU adhesives manufacturers get into manufacturing raw materials as well to avoid uncertainty in raw material supply.
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