The European Pressure-Sensitive Adhesives Market
The ever-increasing use of tapes and labels have maintained buoyant growth in the European pressure-sensitive adhesives (PSA) market recently, despite intense competition and fluctuating prices, brought on by abrupt changes in raw material costs.
A staggering five billion square metres of tapes were produced in Europe last year. Around 70 percent were packaging tapes, 16 percent specialty tapes, 9 percent masking tapes, and 5 percent consumer and office tapes. At the same time, 3.8 billion square metres of labels were produced, with the stock label market was clearly dominated by paper rolls (74 percent), followed by non-paper rolls (17 percent), paper sheets (7 percent), and non-paper sheets (3 percent).
They accounted for 56 percent and 34.7 percent of the $620.4 million revenues generated by the total European PSA market in 2000, according to a new study by Frost & Sullivan. The international marketing consulting company predicts the upward trend in prices will continue this year, however, it will start to decrease when cost pressures ease in 2002. Despite this, the market is expected to reach $796.5 million in 2007.
Research analyst Max Crosetti explains: "In early 1999 the price of crude oil increased from $10 to $30 a barrel. As a consequence, the prices rose by 7.1 percent in 2000, as the dramatic increase in oil prices began to have an effect downstream. This increase is expected to continue through 2001, as some of the major competitors, such as National Starch & Chemical, have already announced price increases at the beginning of the year.
"Between 2002 and 2007, PSA prices are forecast to decrease as the prices of raw materials get back to previous levels, and the market becomes more mature."
The PSA industry faced numerous challenges in 2000. One was the move away from solvent-based technology. Solvent-based is the oldest and most established technology in the PSA area. Growing concern for the environment led to the introduction of many national and European legislation, the latest being the solvent Emission Directive (SED), adopted in 1999 by the European Commission. This directive has created a stringent and demanding legal framework for those industries that use organic solvents in the European Union, forcing adhesives users and manufacturers to find ways of meeting new solvent emission targets.
The more environmentally friendly UV-cured PSAs were predicted to do well in light of the new legislation, however they have not done as well as expected.
The study found the main challenge facing the European PSA market at this time is the need to find innovative ways of improving margins. "Research and development is an important driving force in the continued growth of the PSA market. One way the PSA market size increased was through the discovery of new applications and new markets, such as self-adhesive envelopes and stamps, and medical applications," Max Crosetti continues.
"Existing products reach the maturing stage very rapidly, and it continues to be challenging to develop new products and new applications. However, there are always possibilities for new technologies, and for existing technologies to move into other application areas."
Italy was the largest market in terms of revenue ($253.1 million) and unit shipment (129,100 tonnes). This is due to the simple fact that most packaging tape manufacturers are based there. Its small tape manufacturers account for 60 percent of the total European tape production. The second largest market in revenue terms in 2000 was Germany, with 15.6 percent of total revenues. France was third with 14.4 percent.
Frost & Sullivan is an international marketing consulting company that monitors a comprehensive spectrum of chemicals markets for trends, market measurements and strategies. This on-going research is utilised to complement a series of research publications, such as the company's recent analysis
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