At Afera’s Global Adhesive Tape Summit in Munich in June 2018, President and CEO of AWA Alexander Watson Associates Corey Reardon gave participants a preview of the statistics, technical data and trends included in his AWA Global Specialty Pressure-Sensitive Tape Market Study 2019. The study is slated for release in Q1 2019, and Mr. Reardon this week offered a fully updated preview of his findings.
According to AWA, global adhesive tape volume was 45.3 billion square metres (bsm) in 2018, and 18% of this market lay in Europe.
The global specialty PSA tape market was 6.67 bsm or 15% of the total global tape market. 20% or 1.329 bsm of this lay in Europe.
The largest 4 segments of the global specialty tape market were electronics (16%), medical (15%), automotive (14%) and white goods (13%).
PVC, PET, paper, woven and foam make up 74% of the materials used for production.
The global specialty tape market will increase in volume at a 5.2% average growth rate from 6.7 bsm in 2018 to 7.8 bsm in 2021.
Definition and methodology
AWA’s insights stem from research that AWA conducts on an ongoing basis in a fairly rigorous manner over time. Mr. Reardon strives to present his findings in a practical format, incorporating explanations of market definitions, the integrity of AWA’s data collecting and how that body of research is presented.
Methodology in defining the tape market often focuses on products, application segments and types of tapes produced (e.g. packaging, masking, consumer/office and specialty tapes). Mr. Reardon’s focus is on specialty tapes in the context of the total global tape market.
AWA’s methodology for collecting statistics for the adhesive tape market is based on primary and secondary data collection, like all quality market research methodologies. The broader pressure sensitive industry, however, is one of the key verticals that AWA focuses on within the broader paper/film/packaging/coating/-converting sector. This includes pressure sensitive labels, tapes, adhesives, graphic films, medical products, release liners and all the various components that go into pressure sensitive materials. AWA therefore crosschecks its data for the specialty tape market with the work it performs in the adhesives, release liner and other pressure sensitive materials markets.
When discussing growth rates and volumes, AWA divides the global market into the following key graphic regions:
AWA defines the worldwide tape market in terms of 4 primary groupings:
The largest of the tape categories is packaging tapes, representing 67% of the volume. This totals 30.2 bsm of tapes produced worldwide. Many would consider packaging tapes a commodity, although in some cases they have specialty characteristics. But packaging tapes are typically self-wound pressure sensitive tapes, with a wide variety of materials used for carton sealing and other strapping and packaging applications.
Also important to define are consumer/office tapes (10%)—tapes for the consumer—which are self-wound, double-sided tapes that are usually clear or transparent and used in office or home applications.
Masking tapes (8%) are used for covering or masking materials for coating, painting, etc., which is a significant market for tapes.
The most important category of AWA’s study, specialty tapes, represents 15% of the total volume produced, i.e. 6.7 bsm of the total volume of 45.3 bsm of tapes produced worldwide. Specialty tapes encompass a wide range of specialty constructions and applications characterised by different performance and application properties. Specialty tapes are often customised solutions in various formats made from a broad range of materials for a broad range of applications.
The tape market value chain consists of raw materials suppliers, adhesive coaters, converters, distributors and users, which supply and utilise all these categories of packaging, masking, consumer/office and specialty tapes. In certain areas of this complex value chain, there is forward and backward in product creation. AWA discusses the supply side of the value chain mainly in terms of raw materials supply, as well as the number of tapes used and growth rates from the adhesive coater viewpoint.
The total tape market by region
53% of the over 45 bsm of tapes across all application segments is produced in the Asia Pacific region. 18% and 20% is produced in Europe and North America, respectively, and 5% and 4% in South America and Africa & the Middle East, respectively.
With over half of tape production worldwide, Asia Pacific is the key drive driver for the total tape market. For the specialty tape market, which makes up 15% of total tape production, Asia Pacific dominates but not to the extent that it does for the total tape market.
Global economic growth
Among many growth drivers, economic growth is one of the key macro drivers we are witnessing in the tape market. For the first time in many decades, global economic growth is positive in every region of the globe. There is not a region which is declining or in recession or economic turmoil. Even South America, which has lagged over the last decade, is showing signs (driven primarily by Brazil) of relatively healthy economic growth when looking at the 2018-2020 period.
Of course, the emerging developing markets in Asia show the largest growth, followed by ASEAN-5, which is then followed by Sub-Saharan Africa, the Middle East and North Africa. Economic development and growth (but not tape volume, as shown in the previous figure) is fairly healthy across the globe. This has a positive impact on the tape market overall.
On a global basis, the average of the regional growth rates will increase in 2019, at least according to this IMF source. It is expected to taper off a little bit in 2020, but longer-term expectations for growth do not include any dramatic downward trend per se.
The specialty tape market, which is growing on average at about 5.2% per annum across the globe, is outpacing the average global tape market significantly.
Global specialty pressure-sensitive tape market
When discussing the 15% or 6.7 bsm of specialty tape of the total tapes produced worldwide, the regional volume breakdowns are solid, macro-level estimates. The global volume estimates are based on the growth of the market over the last 2 years and AWA inputs in methodology which include 150-200 interviews across the tape market.
We see a similar but slightly adjusted picture from the global tape market breakdown, with Asia here representing 48% of the total market or 3.2 bsm of tape production. This is followed by North America with 23% or 1.6 bsm, Europe at 20% or 1.3 bsm and South America and Africa & the Middle East at 5% and 4%, respectively.
The Asia Pacific region clearly continues to be a driver of growth and volume for the specialty tape market too.
Specialty tape market by segment
In continually working with leading producers across the specialty tape value chain, AWA has determined its segmentation of the market by application that is most applicable for the majority of players in the market. Certainly the largest sections globally are electronics (16%), medical (15%), automotive (14%) and white goods (13%), with total market growth through 2021 at 5.2%.
Specialty tape market by material
The majority of the materials that make up tapes are PET, PVC, paper, woven and foam materials. Although the other materials are important, especially in certain niches, these 5 materials represent 74% of the materials used to produce tapes.
AWA expects the 2019 forecast to be 5.2% moving forward. This will vary by region, application and according to other factors, but on a consolidated basis, this is relatively strong.
There are certain application areas which will be higher-growth than others. And there are certain niches within the specialty tape market: For example, silicone PSAs and pressure-sensitive tapes show higher growth rates across the globe.
Other specialty niche applications, such as acrylic foam tapes, are growing at considerably higher rates than the global consolidated average, so it is important to look at the tape market, which is fragmented into many different application segments, with more regularity to get a fuller picture of specific growth rates and market dynamics within specific product categories in specific applications.
Some industry dynamics:
Packaging tapes rarely are a company’s only product. In practical terms, this makes a difference in terms of your own company strategy. Many of the companies that said they are in packaging tapes are also in specialty tapes, and the combination is helping to drive growth in terms of industry dynamics.
A few big players
The industry is characterised by a few large international companies. In North America, for example, according to the PSTC (Pressure Sensitive Tape Council, North America), 10 companies represent 80% of total tape production. Similar market dynamics characterise the Europe and Asia Pacific regions.
AWA has seen it in other pressure-sensitive categories more than in the tape segment but expects it to increase here: The investment of financial or private equity investors in M&A activity. The market is very fragmented, especially on the converter side, and this is helping to drive growth. It is also very attractive for inward investment from private equity and financial institutions, as consolidation of the tape industry is certainly possible given its dynamics and structure.
Meeting competition and supplying demand
Tape buyers are many, and there are various forms of specialty tapes in small quantities sold by the roll to larger quantities for more institutional buyers sold by the kilogram. But very rarely are tapes sold by the container-load, as we see in some other product areas, particularly pressure-sensitive materials. This industry dynamic is alternately a benefit and a challenge in terms of keeping industry characteristics positive and competition at bay: how you service those accounts and that demand from the value chain.
Additional information about the report AWA Global Specialty Pressure-sensitive Tape Market Study 2019 is available on AWA’s website www.awa-bv.com.
For more information, contact:
President and CEO
AWA Alexander Watson Associates
Koningin Wilhelminaplein 13
2.10.03 (Tower 2, Floor 10, Suite 3)
1062 HH Amsterdam
+31 (0) 20 676 20 69
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