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The Manufacture of Adhesives and Sealants Industry in South Africa 2021

Carole Veitch | South Africa | 15 June 2021

The Manufacture of Adhesives and Sealants Industry in South Africa 2018

Carole Veitch | South Africa | 05 February 2018

The Manufacture of Adhesives and Sealants Industry in South Africa 2014

Lionel Williams | South Africa | 30 October 2014

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Report Coverage

This report focuses on the manufacture of adhesives and sealants in South Africa. There are profiles of 25 companies including major South African players such as Qualichem, which produces Genkem, Bourne and Nova, Permoseal (also known as Alcolin), which has local distribution rights for Bostik, Pekay Group, Pratley and Royal Adhesive Industries. Profiles of foreign players with production facilities in South Africa include Henkel, 3M, Sika, Norcros, A.B.E. Construction Chemicals and Mapei.

Introduction

This report focuses on the manufacture of adhesives and sealants in South Africa. Bonding and sealing agents have many different applications and are used in all sectors of the economy. The industry, which generated estimated annual revenue of R1.8bn in 2020, plays a key role in enabling economic activities. Demand for adhesives and sealants has varied noticeably since the onset of the coronavirus pandemic. While home confinement and the surge in online shopping have strengthened demand for packaging adhesives and consumer DIY products, remote working and online learning have contributed to a decline in demand for office and school adhesives. Despite facing unprecedented challenges, some role players say that the innovative industry is well positioned to capitalise on potential growth opportunities.

Strengths

• A number of locally-manufactured brands are exported to regional and international markets.
• Several well-known global brands are produced locally and others are imported and distributed to various markets.
• The industry, comprising SMEs, large manufacturers and major multinational players, is well-established and provides a broad range of products for different applications to almost all sectors.
• There is a strong focus on quality assurance, R&D and innovation.

Weaknesses

• Certain products pose health risks and are harmful to the environment.
• Some raw materials are not available locally and the industry is therefore highly exposed to fluctuating commodity prices, notably petroleum, and the volatility of the rand.
• There is a lack of transformation and the level of black ownership is low.
• There is a shortage of staff with industry-specific technical and managerial skills.

Opportunities

• The African market remains largely untapped. Rising demand for construction products, industrial adhesives and consumer DIY products, is being driven by population growth, urbanisation and rising living standards.
• The development of non-toxic ‘green’ products that are recyclable, biodegradable or compostable.
• The development of specialised products for new materials and specific niche markets, such as adhesives and sealants for the medical and dental markets.
• With trading under the African Continental Free Trade Area agreement underway, analysts anticipate a significant increase in intra-African trade.

Threats

• An influx of imported products.
• Economic pressures, domestically, regionally and globally.
• Health risks and continued pandemic-related disruptions.
• Power outages and load-shedding.
• Supply chain disruptions.

Outlook

With coronavirus infections on the rise, South Africa’s economic recovery hangs in the balance. Analysts say that the vaccination programme must be substantially accelerated if South Africa hopes to mitigate the impact of the pandemic’s third wave. Although the growth prospects of the South African adhesive and sealant manufacturing industry are uncertain, role players expect demand from the healthcare and packaging markets to remain robust. Furthermore, the anticipated uptick in construction activity is expected to boost demand for building adhesives and sealants. Industry players will continue to focus on the development of ‘green’ products, along with high-performance solutions for new materials. Although trading under the African Continental Free Trade Area agreement is underway, analysts do not anticipate a significant increase in intra-African trade until the coronavirus pandemic has abated.

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The Manufacture of Adhesives and Sealants Industry in South Africa
The Manufacture of Adhesives and Sealants Industry in South Africa 2021

Full Report

R 6 500.00(ZAR) estimated $352.36 (USD)*

Industry Landscape

R 4 550.00(ZAR) estimated $ 246.65 (USD)*

Historical Reports

The Manufacture of Adhesives and Sealants Industry in South Africa 2018-02-05

R 1 900.00(ZAR) estimated $103.00 (USD)*

View Report Add to Cart

The Manufacture of Adhesives and Sealants Industry in South Africa 2014-10-30

R 1 900.00(ZAR) estimated $103.00 (USD)*

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Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 3
2.2. Geographic Position 5
3. SIZE OF THE INDUSTRY 5
4. STATE OF THE INDUSTRY 7
4.1. Local 7
4.1.1. Corporate Actions 9
4.1.2. Regulations 9
4.1.3. Enterprise Development and Social Economic Development 11
4.2. Continental 12
4.3. International 15
5. INFLUENCING FACTORS 16
5.1. Coronavirus 16
5.2. Economic Environment 17
5.3. Government Interventions 18
5.4. Technology, Research and Development (R&D) and Innovation 19
5.5. Labour 22
5.6. Imported Products 23
5.7. Health and Safety Concerns 23
5.8. Environmental Concerns 24
5.9. Production Costs 24
6. COMPETITION 25
6.1. Barriers to Entry 25
7. SWOT ANALYSIS 26
8. OUTLOOK 27
9. INDUSTRY ASSOCIATIONS 27
10. REFERENCES 27
10.1. Publications 27
10.2. Websites 28
APPENDIX 1 1
Summary of Notable Players 1
COMPANY PROFILES 4
3M SOUTH AFRICA (PTY) LTD 4
A B E CONSTRUCTION CHEMICALS (PTY) LTD 7
ANCHOR TECHNICAL TAPES CC 10
BIDVEST COMMERCIAL PRODUCTS (PTY) LTD 12
BRUMMER ADHESIVES (SA) (PTY) LTD 14
HENKEL SOUTH AFRICA (PTY) LTD 16
LEXXON ADHESIVES (PTY) LTD 19
MAPEI SOUTH AFRICA (PTY) LTD 21
NATIONAL ADHESIVE DISTRIBUTORS CC 23
NORCROS (S A) (PTY) LTD 25
NTE COMPANY (PTY) LTD 29
PEKAY GROUP (PTY) LTD (THE) 31
PERMOSEAL (PTY) LTD 33
PRATLEY (PTY) LTD 35
QUALICHEM (PTY) LTD 38
ROYAL ADHESIVE INDUSTRIES CC 40
SIKA SOUTH AFRICA (PTY) LTD 42
SOUDAL SA (PTY) LTD 44
SOUTH AFRICAN ADHESIVES (SA ADHESIVES) (PTY) LTD 46
STONCOR AFRICA (PTY) LTD 47
STRONGBOND MANUFACTURING (PTY) LTD 51
TYL-PRO ADHESIVES (PTY) LTD 53
UNIMELT CC 55
UNITED ADHESIVES CC 57
XCHEM CHEMICALS (PTY) LTD 59

Introduction

Boasting iconic products like Pratley Putty®, which was sent to the Moon by NASA in 1967 and also used in the repair of a crack on San Francisco’s Golden Gate Bridge, South Africa’s adhesive and sealant manufacturing industry has a longstanding reputation for quality and innovation. In the second decade of the 21st Century, local producers of adhesive solutions currently find themselves on the cusp of the so-called “Fourth Industrial Revolution.” Grappling with tech-driven disruption and the challenges presented by a faltering domestic economy, the South African adhesive and sealant manufacturing industry is clearly under pressure. However, some commentators believe that technological advances may rekindle the industry’s pioneering spirit and generate a multitude of opportunities for manufacturers, as new iterations of adhesives and sealants are developed to respond to the rapidly changing landscape.

Strengths

• Numerous locally-manufactured brands are produced for the export market and the quality of numerous ‘Made in South Africa’ products compares favourably with that of leading global brands.
• The industry is highly innovative, with a strong focus on R&D.
• The industry, comprising SMMEs, large contract manufacturers and major multinationals, serves a broad spectrum of different target markets.
• The manufacture of adhesives and sealants in South Africa is a well-established industry that produces a multitude of products for a wide range of applications.

Weaknesses

• Manufacturers and suppliers continue to source various raw materials, as well as finished end-products from foreign markets.
• Profit margins are slim.
• The industry continues to depend on chemicals that are harmful to both the environment and to human health.
• There is a lack of transformation and the level of black ownership is low.
• There is a lack of transparency in the industry and no official statistical information is in the public domain.
• There is a shortage of skilled staff with industry-specific technical competencies.

Opportunities

• The African market remains largely untapped. Rising demand for industrial adhesives, as well as consumer DIY products, continues to be driven by population growth, the rapid rate of urbanisation, consumerism and rising living standards.
• The broad and fragmented local market lends itself to the development of small and micro manufacturing companies that cater for specific niche markets, such as adhesives and sealants for the medical and dental markets.
• The development of ‘green’ consumer chemicals, including bio-based adhesives and sealants made from cellulose or soy.

Threats

• An escalation of geopolitical tensions.
• An increase in the volume of imports.
• Political uncertainty.
• The industry is highly exposed to the volatility of the local currency.
• The industry is vulnerable to both domestic and global economic pressures, which invariably lead to a decline in end user demand.
• The volatility of raw material prices can significantly undermine profitability.

Outlook

The election of Cyril Ramaphosa as the new president of the ANC has reignited confidence in South Africa. Despite the prevailing economic challenges, many analysts believe that under Ramaphosa’s watch, investors will regard South Africa as a more favourable investment destination. Role players in the adhesives industry are optimistic that higher levels of investment will help to stimulate economic growth and infrastructure development, which, in turn, will reinvigorate the country’s faltering adhesives and sealants manufacturing industry. The strengthening of the South African currency is a mixed blessing for local manufacturers, as a strong South African Rand renders the country’s exports less competitive and lowers the price of finished imported goods. However, the stronger Rand will drive down the price of key imported inputs, notably oil. This will have a positive impact on production costs. Pending South Africa’s much-anticipated ‘changing of the guard’, analysts predict that industrial growth will remain largely subdued and operating conditions for adhesive and sealant manufacturers are expected to remain challenging over the medium-term.

The Manufacture of Adhesives and Sealants Industry in South Africa
The Manufacture of Adhesives and Sealants Industry in South Africa 2018

Full Report

R 1 900.00(ZAR) estimated $103.00 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.10 (USD)*

Historical Reports

The Manufacture of Adhesives and Sealants Industry in South Africa 2021-06-15

R 6 500.00(ZAR) estimated $352.36 (USD)*

View Report Add to Cart

The Manufacture of Adhesives and Sealants Industry in South Africa 2014-10-30

R 1 900.00(ZAR) estimated $103.00 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Value Chain 2
2.2. Geographic Position 4
3. SIZE OF THE INDUSTRY 5
4. STATE OF THE INDUSTRY 9
4.1. Local 9
4.1.1. Corporate Actions 11
4.1.2. Regulations 12
4.1.3. Enterprise Development and Socio-Economic Development Initiatives 13
4.2. Continental 14
4.3. International 17
5. INFLUENCING FACTORS 18
5.1. Economic Environment 18
5.2. Production Costs 20
5.3. Imported Products 20
5.4. Technology, Research and Development (R&D) and Innovation 21
5.5. Health and Safety Concerns 23
5.6. Environmental Concerns 23
5.7. Labour Resources 24
5.8. Government Interventions 25
6. COMPETITION 26
6.1. Barriers to Entry 27
7. SWOT ANALYSIS 27
8. OUTLOOK 28
9. INDUSTRY ASSOCIATIONS 29
10. REFERENCES 29
10.1. Publications 29
10.2. Websites 30
COMPANY PROFILES 32
3M SOUTH AFRICA (PTY) LTD 32
A.B.E. CONSTRUCTION CHEMICALS (PTY) LTD 35
ANCHOR TECHNICAL TAPES CC 38
BIDVEST COMMERCIAL PRODUCTS (PTY) LTD 40
BRUMMER ADHESIVES (SA) (PTY) LTD 42
FLOWCRETE S A (PTY) LTD 44
HENKEL SOUTH AFRICA (PTY) LTD 46
LEXXON ADHESIVES (PTY) LTD 48
MELTON ADHESIVES (PTY) LTD 50
NATIONAL ADHESIVE DISTRIBUTORS CC 51
NORCROS (S A) (PTY) LTD 53
NTE COMPANY (PTY) LTD 56
PEKAY GROUP (PTY) LTD (THE) 58
PERMOSEAL (PTY) LTD 60
PRATLEY (PTY) LTD 62
QUALICHEM (PTY) LTD 65
ROYAL ADHESIVE INDUSTRIES CC 67
SIKA SOUTH AFRICA (PTY) LTD 69
SOUDAL SA (PTY) LTD 71
SOUTH AFRICAN ADHESIVES (SA ADHESIVES) (PTY) LTD 72
STONCOR AFRICA (PTY) LTD 73
STRONGBOND MANUFACTURING (PTY) LTD 77
TYL-PRO ADHESIVES (PTY) LTD 78
UNIMELT CC 79
UNITED ADHESIVES CC 81
XCHEM CHEMICALS (PTY) LTD 83

Introduction

The South African adhesives and sealants industry has shown a marked decline in both production and earnings over the past five years. While the industry continues to avoid publication of actual statistics, it admits that both revenue and production figures for 2013 were below those for 2009. At that time annual production was estimated at 30,000 tonnes, and annual earnings at close to R1bn. The drop in output has occurred against the background of steadily increasing demand for higher quality, lower-priced and more sustainable consumer products. In stark contrast, the global adhesive and sealant industry is riding a wave of success. Research company predictions agree that it will witness strong growth with regard to both volume and revenue over the coming six years, fuelled by technology developments and dominated by the Asia-Pacific region.

Strengths

• • Manufacturers have invested in technology and developed better, more sustainable products.

Weaknesses

• • Lack of interest on the part of both suppliers and manufacturers in joining NASMA and playing a role in the development of the industry. • Shortage of skilled personnel in this highly specialised industry. • Profitability is affected by the volatility of the Rand.

Opportunities

• • Export to the rest of Africa. • The growing use of adhesives in medical • applications • Growth of major end-use industries like the construction and automotive sectors, mainly in the BRICS countries.

Threats

• • Weakening economy. • Rising production costs pose a severe threat to the profitability and long-term future of the sector. • Volatility in raw material prices.

Outlook

The volatility in raw material prices and a weak economic climate are expected to hinder market growth between now and 2020. With rising electricity tariffs and the ever-increasing cost of labour, local adhesive and sealant manufacturers emphasised the importance of controlling costs. However, they also realise that long-term investment in new innovative technologies which improve safety, boost efficiency, and grow productivity are vital for the success of the sector. Manufacturers mentioned the steadily increasing growth in exports to sub-Saharan Africa which the African Development Bank predicts will achieve economic growth of 5.8% in 2014. This growth is expected to continue and will compensate for the losses in segments of the local market.

The Manufacture of Adhesives and Sealants Industry in South Africa
The Manufacture of Adhesives and Sealants Industry in South Africa 2014

Full Report

R 1 900.00(ZAR) estimated $103.00 (USD)*

Industry Landscape

R 1 330.00(ZAR) estimated $ 72.10 (USD)*

Historical Reports

The Manufacture of Adhesives and Sealants Industry in South Africa 2021-06-15

R 6 500.00(ZAR) estimated $352.36 (USD)*

View Report Add to Cart

The Manufacture of Adhesives and Sealants Industry in South Africa 2018-02-05

R 1 900.00(ZAR) estimated $103.00 (USD)*

View Report Add to Cart

Table of Contents

[ Close ]
PAGE
1. INTRODUCTION 1
2. DESCRIPTION OF THE INDUSTRY 1
2.1. Industry Supply Chain 2
2.2. Geographic Position 3
3. SIZE OF THE INDUSTRY 3
4. STATE OF THE INDUSTRY 8
4.1. Local 8
4.1.1. Corporate Actions 9
4.1.2. Regulations 9
4.1.3. Enterprise Development and Socio-Economic Development 9
4.2. Continental 11
4.3. International 11
5. INFLUENCING FACTORS 12
5.1. Economic Environment 12
5.2. Input Costs 12
5.3. Labour Resources 12
5.4. Technology and Information Technology 13
5.5. Environmental Concerns 13
6. COMPETITION 13
6.1. Barriers to Entry 13
6.2. Substitute Products and Alternatives 14
6.3. Research and Development (R&D) and Innovation 14
7. SWOT ANALYSIS 14
8. OUTLOOK 14
9. INDUSTRY ASSOCIATIONS 15
10. REFERENCES 15
10.1. Publications 15
10.2. Websites 16
ORGANOGRAM 17