03/25/2010, Düsseldorf / Germany

 

Henkel adhesives – part of our daily lives

 

Invisible, but nearly always indispensable

“Hidden champions” is the phrase that Thomas Geitner, head of the Adhesives business at Henkel, likes to use when talking about his products – because though they are mostly never seen, they are nearly always indispensable. The future potential of this advanced joining technology is just as strong as ever, even after a challenging year like 2009. Henkel’s Adhesive Technologies business sector is therefore well positioned for profitable organic growth.

Adhesives are the hidden champions of everyday life. Although they are rarely noticed, they are all around us: cell phones, cars, aircraft, furniture, books, baby’s diapers, wallpaper – the list of things that would not work without adhesives is endless. “Adhesives are what we call a critical C component,” explains Thomas Geitner, Executive Vice President, Henkel Adhesive Technologies. “They account for only a fraction of the total cost of the end product, but if the adhesive doesn’t deliver the promised performance, this can have serious consequences.” Books would fall apart, cars would no longer be safe, wallpaper would begin to peel off the wall – and this list, too, is a long one.

According to the company’s estimates, the world market for adhesives, sealants and surface treatment products amounts to some 47 billion euros. On a long-term scale, it is growing annually by about three to five percent. “Even if last year was a difficult one, the adhesives market has lost none of its attractiveness,” says Geitner. There are four major trends driving growth in the adhesives segment:

  1. Steadily rising adhesives consumption in emerging markets,
  2. the increasing importance of sustainable manufacturing of industrial goods, as in the automotive and aircraft sectors,
  3. 3. the continuing trend toward replacing traditional techniques such as welding or riveting by structural bonding, and
  4. adhesive solutions for completely new fields of application in areas such as medicine or even agriculture, for example the grafting of tomato plants.

With leading positions worldwide, Henkel is excellently poised to profit from these trends. In the meantime, the company generates almost half of its sales with adhesive technologies for a wide variety of market segments. The portfolio ranges from the Pritt glue stick to products for professional craftsmen and DIYers to solutions for many different industrial markets, such as the packaging, electronics and automotive industries. Geitner: “We are the first choice for all customers seeking broad-based applications and technology expertise, looking for reliable global availability of consistently top quality from a single-source provider, and who depend on having a local partner capable of guaranteeing them the technical support they need.” Many smaller companies do not have the scope to serve all of these needs.

After an economically challenging year, Henkel’s Adhesive Technologies business is focusing strongly on generating profitable growth again in 2010 and beyond.

A key factor in this effort is the innovative power of the company, which invests some 4 million euros every week of the year in research and development activities for its adhesives. In addition to its own broad technological expertise and an extensive cooperation network with external research partners and university institutes, Henkel profits from the close research and development cooperations it maintains with many of its customers.

Furthermore, individual areas within Henkel’s Adhesives business – for example, Packaging, Consumer goods and Construction Adhesives – have now grown to a size where scale effects support further growth and make them interesting prospective partners for customers. Operating on a larger scale can generate advantages in areas such as purchasing, logistics and manufacturing, thus enabling volume business at competitive conditions – all of which benefits customers in their turn.

Another growth factor which remains as important as ever is emerging markets. These already account for 41% of Henkel Adhesive Technologies’ sales, and the trend is upward. Increasing consumer demand in the large markets of India and China will have a positive impact on sales of adhesives.

Thomas Geitner: “We are excellently positioned for profitable organic growth – and we will grow faster than our markets.”