U.S. Structural Adhesives Markets

5 U.S. Structural Cyanoacrylates Adhesives Market Introduction Market Overview Cyanoacrylate adhesives are often termed as super glues. These adhesives are solvent-free, one-part acrylate adhesives that cure instantaneously on contact with mated surfaces through a reaction with surface moisture. Cyanoacrylate is the generic name for ethyl–2-cyanoacrylate and 2-octyl-cyanoacrylate or n-butyl cyanoacrylate. Medical grades for cyanoacrylates are Dermabond and Traumaseal. Industrial cyanoacrylate adhesives are known as instant adhesives. These are high strength ones that can bond dissimilar materials, such as plastic, metal, and rubber. These adhesives are converted to thermoplastic resins rapidly at room temperature, developing fixture strength in seconds and full strength within 24 hours. Cyanoacrylate adhesives are solvent free and one-part formulation, which cures rapidly when compressed into a thin film between two substrates. During the early stages, cyanoacrylates showed poor chemical resistance and could not withstand temperatures exceeding about 180°F. However, huge developments had been done in recent formulations, which offer improved peel and impact strength and can easily withstand prolonged exposure to 250 degree Fahrenheit temperatures. Light-curing cyanoacrylates offer even faster cure rate and develop nearly 60.0 percent of final strength after only five seconds of exposure to light. Eastman Kodak and Ethicon studied whether the glues could be used for holding human tissues together after surgery. Soon, this adhesive was used to seal wounds during the Vietnam War. Cyanoacrylates adhesives are used for assembling prototype electronics, flying model aircraft, and retention dressings for nuts and bolts. These glues are used as wood finishes in wood turners. Due to its fast drying nature and glossy finish, Cyanoacrylates adhesives are the ideal ones for its best look and glossy finish. They are used in automotive assemblies. TI Automotive uses Hernon Manufacturing Inc for bonding steel clamps with rubber hoses. Bonding between clamp and hoses keeps it in place and makes the hose suitable for easy assembling. Cyanoacrylate adhesives are used in medical device industry for bonding needle with syringe. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-1 Cyanoacrylate adhesives are differentiated based on products, such as general purpose adhesive, low odor/low bloom adhesives, toughened adhesives, thermal resistance adhesives, light-cure adhesive, and flexible adhesives. Cyanoacrylates adhesives are available in a number of dispensable pack sizes, including gels, liquids, and pastes. Gel cyanoacrylates adhesives are high-viscosity adhesives, which resists the flow of adhesives during application. Liquid cyanoacrylate adhesives are used for filling gaps more efficiently than the other forms of the adhesive. Limitation in using liquid adhesive is that it flows beyond the desired application area and cleaning of adhesives becomes a tougher task. Paste adhesives have higher resistance to flow and greater force is required to dispense and spread the adhesive on the surface. Paste adhesives contain higher filler content. A d v a n t a g e s o f Cy a n o a c r y l a t e A d h e s i v e s ■ One-part system ■ Solvent-free ■ Rapid room temperature curing ■ Excellent adhesion to many substrates ■ Availability of wide range of viscosities ■ Excellent bond strength in shear and tensile mode ■ Primer available for polyolefines and difficult-to-bond plastics D i s a d v a n t a g e s o f Cy a n o a c r y l a t e A d h e s i v e s ■ Poor peel strength ■ Limited gap cure ■ Poor durability on glass ■ Poor solvent resistance ■ Low temperature resistance ■ Bond skin rapidly #N340-39 © 2009 Frost & Sullivan www.frost.com 5-2 Chemistry Cyanoacrylates, in their earlier generation, gave very poor peel and impact strength because of their brittleness. They generally found an application, where there was minimal environmental stress and fast setting applications. Cyanoacrylates material costs were relatively high when compared to other adhesives. The application cost is relatively less expensive when compared to other joining adhesives. By the introduction of new generation cyanoacrylates with monomers other than methyl and ethyl, cyanoacrylates have improved toughness (3,500 psi), high sheer strength, faster curing abilities, higher strengths with plastics, and greater thermal and impact resistance. With unmodified cyanoacrylate adhesives having higher lap shear strength of 2000-3000psi with most substrates and it can be improved further by 10 percent to 30 percent by incorporation of tougheners or plasticizers to the unmodified cyanoacrylate adhesive formulation. Higher peel strength products are developed, which can withstand the peel resistance of 5 to 10 times higher than the conventional adhesives. Bond line flexibility in cyanoacrylate formulation can be achieved by the addition of plasticizers, such as aliphatic esters, aromatic phosphates, and phthalates. This plasticizer improves the peel strength and shock resistance of the cured cyanoacrylate adhesives. Elastomeric tougheners significantly improve the impact strength of the adhesives. In the modern era, toughening agents, such as acrylonitrile-butadiene-styrene, ethylene-methyl acrylate copolymers, styrene butadiene rubber grafted polymers are used in the modern cyanoacrylate adhesives. Product Selection For selection of cyanoacrylate adhesives, some specifications have to be considered. These include viscosity, initial set time, gap fill, tensile strength, and application temperature. Viscosity controls the amount of cyanoacrylate adhesives dispensed on to the substrates. Initial, working and assembly set time is the amount of time adhesives can be applied and repositioned or removed before extensive setting or curing and results in hardening of the bond joints. After this time, movement or adjustments in assembly is not possible which further damages the finished bonds. Gap filling is the space between the substrate that adhesives can accommodate and maintain a full strength bond. Ultimate tensile strength is the amount of stress required to cause a failure in a control specimen of material under tensile load conditions. Use temperature is the range, at which the cyanoacrylate adhesives can be exposed to temperature without structural degradation of required end-use properties. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-3 Market Definition In general, cyanoacrylate adhesives market is segmented into industrial and consumer segments. This research service is focused on the industrial application, which can withstand lap shear strength of more than 1000 psi. End-use segment for structural cyanoacrylate adhesive market can be broadly classified as: ■ Transportation ■ Rigid bonding Tr a n s p o r t a t i o n In defining transportation sector, following segments have been included in the scope of the study: ■ Passenger automobiles ■ Mini vans ■ Light trucks ■ Utility vehicles ■ Motor homes ■ Military vehicles ■ All water crafts ■ All rail cars In the past, the cyanoacrylate adhesives had performance limitation. Cyanoacrylates are thermoplastic in nature and exhibits poor thermal and chemical resistances. When cured, they become brittle and exhibits poor impact and peel strengths. These drawbacks limited the growth of cyanoacrylates to high volume assembly applications. Figure 5-1 explains United States structural cyanoacrylate adhesive markets for transportation sector, Unit shipment and Revenue from 2004 to 2007. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-4 Figure 5-1 Structural Cyanoacrylate Adhesives Market for Transportation Sector: Unit Shipments and Revenues (United States), 2004-2007 Unit Revenue Units Growth Rate Revenues Growth Rate Year (Million) (%) ($ Million) (%) 2004 0.5 --- 11.5 --- 2005 0.5 2.1 12.0 4.4 2006 0.5 2.1 12.56 4.4 2007 0.5 2.2 13.1 4.4 Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan In 2004, revenue for structural Cyanoacrylate adhesive in transportation sector was $11.5 million and reached $13.1 million in 2007 with a growth rate of 4.4 percent. In unit shipment was 0.5 million pounds in 2004 and reached 0.5 million pounds in 2007 with growth rate of 2.2 percent. Rigid Bonding Following are the rigid bonding industries using structural Cyanoacrylate adhesives ■ Furniture—office and residential furnitures comprising of both wood and metal furnitures. ■ Appliances—Computers, micro ovens, refrigerators, washing machines, dryers, and others ■ Machineries—Power gas and water supply utilities, chemical and petro chemical plants and mines. Figure 5-2 shows United States structural cyanoacrylate adhesive markets for rigid bonding sector, Unit shipment and Revenue from 2004 to 2007. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-5 Figure 5-2 Structural Cyanoacrylate Adhesives Market for Rigid Bonding Sector: Unit Shipments and Revenues (United States), 2004-2007 Unit Revenue Units Growth Rate Revenues Growth Rate Year (Million) (%) ($ Million) (%) 2004 0.8 --- 18.6 --- 2005 0.8 3.3 19.4 4.3 2006 0.8 3.3 20.2 4.3 2007 0.8 3.3 21.1 4.3 Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan In 2004, revenues for structural Cyanoacrylate adhesive in rigid bonding industry amounted to $18.6 million and reached $21.11 million in 2007 with a growth rate of 4.3 percent. The unit shipment was 0.77 million pounds in 2004 and reached 0.84 million pounds in 2007 with growth rate of 4.3 percent. Market Engineering Measurements United States structural Cyanoacrylates adhesives market amounted to $34.2 million in 2007. Growth is expected at a CAGR of 4.3 percent and is expected to reach $46.0 million in 2014. This market is in the matured stage. Currently 15 market participant are active in the market. Top three players contribute to 59.0 percent market share. Chart 5.1 represents the Market Engineering measurements for the United States structural cyanoacrylate adhesive market for 2007. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-6 Chart 5.1 Structural Cyanoacrylates Adhesives Market: Market Engineering Measurements (United States), 2007 Challenge Identification Market Engineering Drives Market Market Engineering System Market Research Market Engineer Strategy and Planning Market Strategy Implementation Market Planning Measurement Name Measurement Trend Market age Mature stage Stable Revenues $34.2 million Increasing $46 million Increasing 4.3% Increasing 4.28% Decreasing 1.37 million pounds Stable $25 Decreasing $10 to $50 Decreasing Transportation structural application Revenue/CAGR $13.1 million/4.47% Decreasing Rigid Bonding Structural application Revenue/CAGR $21.1 million/4.17% Decreasing Competitors (active market competitors in base year) 15 Stable 59% Decreasing Potential revenues (maximum future market size) Base year market growth rate Compound annual growth rate (CAGR) Units Average price Price range Market concentration (percent of base year market controlled by top three competitors) Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan #N340-39 © 2009 Frost & Sullivan www.frost.com 5-7 Competitive Analysis Competitive Structure Figure 5-3 discusses the competitive structure for the structural cyanoacrylate adhesives market in United States in 2007. Figure 5-3 Structural Cyanoacrylates Adhesives Market: Competitive Structure (United States), 2007 Number of Companies in the Market 15 Types of Competitors Major multinational companies serving all end-user industries Minor participants operating in a niche market Distribution Structure While the major participants have a direct sales team, the smaller participants rely extensively on distributors and manufacturer representatives as well as distribution networks throughout the country Tiers of Competition Tier 1: Henkel, 3M,Bostik, ITW Devcon, Lord Corporation Tier 2: Dymax, Master Bond, Hernon Manufacturing Inc, Permabond Tier 3: Bondpro Corp, Applied Products, Adhesive Systems Notable Acquisitions, Mergers Acquisition of National Starch and Chemical Company's adhesives business unit by Henkel from Akzo Nobel in 2007 Acquisition of Ritelok Products from Chemence Inc by 3M in 2007 Key End-user Groups Automotive Aerospace /aircraft manufacturing Appliances Furniture Marine Mill works Loud speakers Competitive Factors Technological advancement Price Quality Customer and technical service Focus on developing countries, such as China, India, eastern Europe, and Latin America Partnering with the designers, original equipment manufacturers (OEMs), and Tier-1 Clients increases the market share Source: Frost & Sullivan #N340-39 © 2009 Frost & Sullivan www.frost.com 5-8 The United States structural cyanoacrylate adhesive market is characterized by two types of suppliers. Type one is classified as direct supply to the OEM and Tier-1 suppliers and type two is distributed through distributors to the consumer market. Direct supplies are made where the consumption of adhesives is on a larger scale and the price of the product is relatively low due to the competitive factor. On the other hand, in the consumer market the price of cyanoacrylates is higher and the demand for this segment is relatively low. Further consolidation in the cyanoacrylate market is expected through mergers and acquisitions to improve their positions in the market segments. With acquisition of National Adhesives from Akzo Nobel in 2008, Henkel has moved on to the number one position in all the industrial and consumer segments and their product portfolio complements each other to increase their share in the market. 3M has acquired Rite-Lok brand from Chemence in 2007. This acquisition supports the company's growth strategy to expand its core adhesive business. Key success factors for the suppliers of structural cyanoacrylates adhesives market are expected to be ■ Innovation of high performance products ■ Environmental compliances ■ Low cost and product efficiency the need of the hour The demand for the cyanoacrylate adhesive is low because of the mature market and its scope of application in both industrial and consumer are well-established. This situation is likely to be very competitive based on pricing, which is considered to be the major factor. The average price of the products is expected to go down further because the industrial segment considers being the largest user of cyanoacrylate adhesives. Market Share Analysis Figure 5-4 and Chart 5.2 shows the market share by revenue for the structural cyanoacrylate adhesives market in United States in 2007. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-9 Figure 5-4 Structural Cyanoacrylate Adhesives Market: Company Market Share by Revenues (United States), 2007 Company 2007 (%) Henkel 23.0 3M 21.0 Bostik 15.0 ITW Devcon 13.0 Lord Corporation 10.0 Others 18.0 TOTAL 100.0 Note: Others include Permabond, Dymax, Masterbond, Hernon Manufacturing Inc, Bondpro corp, Applied Products, Adhesive systems and others Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan Chart 5.2 Structural Cyanoacrylate Adhesives Market: Company Market Share by Revenues (United States), 2007 Others 18% Henkel 23% Lord Corporation 10% 3M 21% ITW Devcon 13% Bostik 15% Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan Henkel is the market leader in cyanoacrylate adhesives in United States with 23.0 percent share. Customer Focus, Technical support and well established distribution network makes the Henkel the No.1 brand in the industrial segment. Henkel has a wide range of product line in cyanoacrylate adhesives. Loctite® Prism® is their premium brand for cyanoacrylates. They supply to appliances, general assembly, automotive and transportation industries. They supply their products directly to the OEM's and Tier 1 suppliers. They also supply their products through distribution network to the niche market segments. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-10 3M are the second-largest market participant with 21.0 percent market share in the structural cyanoacrylate market. 3M™ Rite-Lok™ Cyanoacrylate or instant adhesives product ranges from general purpose to engineering adhesion. 3M's products can be purchased using their online store shop 3M and through local distributors channel. Their strategy is to acquire companies across the globe to increase their market share in the growing market. Bostik is the third-largest participant in the structural cyanoacrylate adhesive market with 15.0 percent market share. Bostik has series of products in the cyanoacrylate range of adhesives. They have products, which can bond instantly and can eliminate clamping fixtures and drying areas, where it cures at room temperatures. These adhesives bond substrates that eliminate the need for mechanical fastener. Bostik cyanoacrylate adhesives are used in automated systems, where the application is fast, reliable, and used in production line application. Bostik have different grades for penetration 7431, for rubber and plastics—7432, for porous substrates—7434 and gap filling applications—7435. ITW Devcon has 13.0 percent market share in structural cyanoacrylate adhesive market. ITW Devcon manufactures cyanoacrylate adhesives, which are used to bond metals, rubbers, plastics, and dissimilar metals. The company has products, which can withstand temperature of 250 degree Fahrenheit and fill gaps from 0.003 inch to 0.050 inch. These adhesives are general purpose high viscosity instant adhesives used to bond wood, cork, leather, audio speaker, and PCB wire tacking. Bonding rubber weather-stripping, fixturing rubber gaskets, splicing O—ring, repairing plastics and metals are the other application where ITW Devcon supplies cyanoacrylate adhesives. Others suppliers of structural cyanoacrylate adhesive, that contribute 18.0 percent of the total structural cyanoacrylate adhesives, include Dymax, Permabond, Master Bond, Hernon Manufacturing Inc, and others. Dymax manufactures cyanoacrylate adhesives, which have an exceptional product stability and faster curing speed than other types of adhesives available in the market. Multi-Grade CA301 series of cyanoacrylate adhesives are high strength adhesives, which replaces methyl and ethyl cyanoacrylates and can adhere to a wide range of substrates. CA301 series adhesives are available at a lower cost by reducing the number of adhesives necessary for manufacturing. Permabond manufacture a complete spectrum of cyanoacrylate adhesives, which comprises of high performance formulations, variety of viscosity, non-blooming, low odor, rapid curing, and high temperature. They have products, which bond plastics, such as polyolefins, PTFE, and dissimilar metals. Permabond has developed adhesive, which can withstand temperature resistance between (-) 60 degree centigrade and 260 degree centigrade. Research and development team continuously pushes the limits of cyanoacrylates. Permabond has high temperature resistance products, such as 919 and 920, which can withstand secondary heat cure. They do have products, such as Permabond 731 and 735, which can resist impact resistance and bond excellently with different substrates, which include aluminum, steel, plastics, and rubber. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-11 Master Bond manufactures specialty cyanoacrylate adhesives for efficient processing and instant curing. Methyl, ethyl, and specialty grade solvent-free types of adhesives are manufactured. The company provides excellent service to their clients through their application engineers and technical service team. High strength cyanoacrylate adhesion bonds dissimilar substrates, which include metal, rubber, plastics, glass, and ceramics. Their formulation can be used in both manual and automatic high speed application with different range of viscosities for use in porous surfaces. Hernon Manufacturing Inc supplies Instantbond Cyanoacrylates series for bonding rubber bumpers, permanent locking of plastics, fasteners, speaker components, shock mounts, gears to shaft applications, wiper blades, name plates, and catheters applications. Hernon Instantbond develops strength within seconds and cures completely to a bond strength of upto 5000psi within a few hours. These adhesives can withstand a temperature of 100 degree centigrade. Market Dynamics Market Drivers Figure 5-5 shows the market drivers ranked in the order of impact for the United States structural cyanoacrylate adhesive market from 2008 to 2014. Figure 5-5 Structural Cyanoacrylate Adhesives Market: Market Drivers Ranked in Order of Impact (United States), 2008-2014 Rank Driver 1-2 Years 3-4 Years 5-7 Years 1 Increased plastic usage in appliance industry High High Medium 2 Increasing use of reusable plastics in the appliances industry High High Medium 3 Instant bond an advantage in improving the production performance High Medium Medium Source: Frost & Sullivan #N340-39 © 2009 Frost & Sullivan www.frost.com 5-12 Increased Plastic Usage in Appliance Industry The appliance industry has a love and hate relationship toward plastics. These are mainly used for their advantages, such as light weight, improved design aesthetics, and recycling attributes. At the same time the fluctuation in the cost of plastics, durability, and structural integrity of the product creates a doubt in the minds of the designers. Thermoplastics, such as acrylonitrile-butadiene-styrene (ABS), nylon, polyethylene, polypropylene, and polystyrene are widely used plastics in the appliance industry. Appliance manufactures, such as air conditioners, dishwashers, dryers, freezers, furnaces, refrigerators, stoves, washing machines, and others are taking a renewed look at the benefits offered by using reinforced plastics for large structural components, such as doors, frames, and panels. According to American Plastics Council (APC), plastics account for almost 25.0 percent of material content in appliances by weight. They also account for 60.0 percent of material content by volume. Without the usage of plastics in the appliances industry, the APC estimates that these major appliances and are likely to cost at least 25 percent more and are anticipated to consume 30 percent more energy Plastic usage in appliance industry has given better strength, better luster, wide range of color options, and improved heat resistance. Resin consumption for injection molded appliance parts, such as refrigerator, which comprise of the largest share; has experienced steady increase from 600.0 million pounds in 1997 to 1.00 billion pounds in 2006. Cyanoacrylates adhesives are used for bonding plastic appliance doors, cabinets, liners, and shelves. Instant Bond an Advantage in Improving the Production Performance With instant bonding features, the cyanoacrylate adhesives are used for bonding different grades of plastics and dissimilar metals to cure at a faster speed. This curing speed of the adhesives helps the industry manufactures to reduce the manufacturing steps involved and also increases the production efficiency of the plant. Increasing Use of Reusable Plastics in the Appliances Industry Plastic manufactures and the end users of plastics are considering commitment toward plastic recovery and re-use. For plastics being remanufactured, the nature of structural adhesives creates a serious restructuring problem. Adhesives and the portion of surrounding plastics have to be removed before regrounding process. This procedure increases the labor cost, time, and creates considerable amount of plastics waste. By using cyanoacrylates adhesive, the plastic disposable is minimal and the adhesives are easy to use when they are applied on the surface. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-13 Market Restraints Figure 5-6 shows the market restraints ranked in the order of impact for the United States structural cyanoacrylate adhesive market from 2008-2014. Figure 5-6 Structural Cyanoacrylate Adhesives Market: Market Restraints Ranked in Order of Impact (United States), 2008-2014 Rank Restraint 1-2 Years 3-4 Years 5-7 Years 1 Market maturity High High High 2 Limited technical advancement in cyanoacrylate adhesive market High Medium Medium 3 Commoditization of cyanoacrylate adhesives Medium Medium High Source: Frost & Sullivan C o m m o d i t i z a t i o n o f Cy a n o a c r y l a t e a d h e s i v e s End users see the adhesive market as an essential and commodity material, which is controlled by pricing. Suppliers, who give the end users the best price in the market, are gaining shares in the market. End users are willing to pay additional cost for companies, which provide them with value services, such as technical support and proper supply chain. These services are provided by the larger companies. They are willing to even lessen their profit margin in order to retain their market share. Cyanoacrylate adhesive market is based on 50:50 ratios. 50 percent contributes to the industrial segment and the rest is contributed by the consumer segment. The price factor plays a major role in the industrial segment with more quantity and less price. L i m i t e d Te c h n i c a l A d v a n c e m e n t i n Cy a n o a c r y l a t e Adhesive Market Cyanoacrylate adhesive can retain very poor shock or impact resistance and has poor gap-filling properties when compared to other structural adhesives. After the introduction of toughened cyanoacrylates and the gel-type cyanoacrylate adhesives, there has been limited technical and packaging advancement in the recent past. With wide range of specialty formulation available in these adhesives, they are being used in the challenging applications. This factor restraints the growth of the cyanoacrylate adhesives in United States. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-14 Market Maturity Cyanoacrylate adhesives, with its introduction in early 1950's, have their product features in the matured stage where it has a well-established market. Hence, it has a very little scope for product developments. Cyanoacrylate adhesives are manufactured by many manufactures and they supply to the general market. This brings down the average price of the product. Unit Shipments and Revenue Forecasts Figure 5-7 and Chart 5.3 shows the United States structural cyanoacrylate adhesive market unit shipment and revenue forecasts from 2004 to 2014. Figure 5-7 Structural Cyanoacrylate Adhesives Market: Unit Shipment and Revenue Forecasts (United States), 2004-2014 Unit Revenue Units Growth Rate Revenues Growth Rate Year (Million) (%) ($ Million) (%) 2004 1.3 --- 30.1 --- 2005 1.3 2.9 31.4 4.4 2006 1.3 2.9 32.8 4.4 2007 1.4 2.9 34.2 4.3 2008 1.4 2.7 35.7 4.3 2009 1.5 2.8 37.2 4.3 2010 1.5 2.8 38.8 4.3 2011 1.5 2.9 40.5 4.3 2012 1.6 2.9 42.2 4.3 2013 1.6 2.9 44.0 4.3 2014 1.6 3.0 45.9 4.3 Compound Annual Growth Rate (2007-2014): 2.9% 4.3% Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan #N340-39 © 2009 Frost & Sullivan www.frost.com 5-15 Chart 5.3 Structural Cyanoacrylate Adhesives Market: Unit Shipment and Revenue Forecasts (United States), 2004-2014 Revenues ($ Million) 50 Units (Million) 1.8 1.6 40 1.4 35 1.2 30 1.0 25 0.8 20 0.6 15 10 0.4 5 Units (Million) Revenues ($ Million) 45 0.2 0 0.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan United States structural cyanoacrylate adhesive market reached $34.2 million in 2007 and is expected to reach $45.9 million by 2014 with a CAGR of 4.3 percent during the forecast period. Growth of structural cyanoacrylate adhesives is increased by introducing adhesives for composite and plastic bonding applications. Introduction of new generation cyanoacrylates without methyl and ethyl monomers with improved performance properties is likely to grow the cyanoacrylate market in United States. Cost being a major factor, it is currently being a major challenge for high-volume applications. In 2007 unit shipment was at 1.4 million pounds and is forecast to reach 1.7 million pounds by 2014 with CAGR of 2.87 percent. In structural cyanoacrylate adhesive market, rigid bonding sector is the largest usage of adhesives, with revenues of $ 21.1 million. Transportation sector contributes to 38.0 percent of the total United States structural cyanoacrylate adhesives market. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-16 Tr e n d s Market Trends New generation cyanoacrylates have improved toughness and high shear strength of 3500 psi. With the introduction of new resin monomers with the traditional methyl and ethyl cyanoacrylates have provided faster cure, higher strength with plastics and also thermal and impact resistances. Development of rubber-toughened cyanoacrylates offers high-peel strength and impact resistance to complement the high shear and tensile strength characteristics of cyanoacrylates. Very high thermal resistant cyanoacrylate adhesives are introduced in the market. These adhesives offer excellent bond strength retention after exposure of high temperature of 250 F for thousand hours. Developing cyanoacrylate adhesives primers enables to form strong bond with polyolefines and other difficult to bond plastics, such as fluoro polymers and acetal resins. Low volatile vapor adhesives are developed for solving the blooming problem. However, these adhesives are lesser in quality when compared to the standard cyanoacrylates adhesives. The white haze formation around the bond line is known as blooming or frosting. This occurs when cyanoacrylate monomers volatize and react with moisture in the air and settles on the part. Market Forecasts Based on Sectors Transportation Figure 5-8 and Chart 5.4 shows the United States structural cyanoacrylate adhesives market for the transportation sectors unitshipment and revenue forecasts for the period 2004-2014. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-17 Figure 5-8 Structural Cyanoacrylate Adhesives Market for Transportation Sector: Unit Shipment and Revenue Forecasts (United States), 2004-2014 Unit Units Growth Rate Revenue Revenues Growth Rate Year (Million) (%) ($ Million) (%) 2004 0.5 --- 11.5 --- 2005 0.5 2.1 12.0 4.4 2006 0.5 2.1 12.6 4.4 2007 0.5 2.2 13.1 4.4 2008 0.5 2.0 13.7 4.5 2009 0.6 2.0 14.3 4.5 2010 0.6 2.2 15.0 4.5 2011 0.6 2.4 15.6 4.5 2012 0.6 2.4 16.3 4.5 2013 0.6 2.5 17.1 4.5 2014 0.6 2.5 17.8 4.5 Compound Annual Growth Rate (2007-2014): 2.3% 4.5% Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan Chart 5.4 Structural Cyanoacrylate Adhesives Market for Transportation Sector: Unit Shipment and Revenue Forecasts (United States), 2004-2014 Revenues ($ Million) 20 Units (Million) 18 0.7 0.6 0.5 14 12 0.4 10 0.3 8 6 Units (Million) Revenues ($ Million) 16 0.2 4 0.1 2 0 0.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan #N340-39 © 2009 Frost & Sullivan www.frost.com 5-18 In 2007, the revenue for transportation sector in structural cyanoacrylate adhesive market is $13.12million with the growth rate of 4.4 percent. In 2014, the revenues for transportation sector in structural cyanoacrylate adhesive market are expected to reach $17.8 million and grow at 4.5 percent CAGR from 2007 to 2014. With limited performance properties of the cyanoacrylate adhesive, the formulators have developed new formulations in structural cyanoacrylate adhesives to improve the performance properties of instant adhesives. New products in cyanoacrylates continue to offer ease of applications with the performance properties of structural adhesives. The challenged faced by the end users are higher material cost compared to other structural adhesives. In 2007, unit shipment for the structural cyanoacrylate adhesive for the transportation sector was 0.52 million pounds growing at a growth rate of 2.2 percent. This trend is expected to continue throughout the forecast period. In 2014, the unit shipment is expected to reach 0.62 million pounds at a CAGR of 2.3 percent. Rigid Bonding Figure 5-9 and Chart 5.5 shows the United States structural cyanoacrylate adhesives market for rigid bonding sectors unitshipment and revenue forecasts for the period 2004-2014. Figure 5-9 Structural Cyanoacrylate Adhesives Market for Rigid Bonding Sector: Unit Shipment and Revenue Forecasts (United States), 2004-2014 Unit Revenue Units Growth Rate Revenues Growth Rate Year (Million) (%) ($ Million) (%) 2004 0.8 --- 18.6 --- 2005 0.8 3.3 19.4 4.3 2006 0.8 3.3 20.2 4.3 2007 0.8 3.3 21.1 4.3 2008 0.9 3.2 22.0 4.2 2009 0.9 3.2 23.0 4.2 2010 0.9 3.2 23.9 4.2 2011 1.0 3.2 24.9 4.2 2012 1.0 3.2 25.9 4.2 2013 1.0 3.2 27.0 4.2 2014 1.1 3.2 28.1 4.2 Compound Annual Growth Rate (2007-2014): 2.3% 4.2% Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan #N340-39 © 2009 Frost & Sullivan www.frost.com 5-19 Chart 5.5 Structural Cyanoacrylate Adhesives Market for Rigid Bonding Sector: Unit Shipment and Revenue Forecasts (United States), 2004-2014 30 Revenues ($ Million) Units (Million) 1.2 20 0.8 15 0.6 10 0.4 0.2 0 Units (Million) 1.0 5 Revenues ($ Million) 25 0.0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 Note: All figures are rounded; the base year is 2007. Source: Frost & Sullivan U.S. structural cyanoacrylate adhesive market for rigid bonding sector's revenues is $21.11 million with the growth rate of 4.3 percent in the base year 2007. In 2014, the revenues for rigid bonding sector in structural cyanoacrylate adhesive market are expected to reach $28.1 million and grow at a CAGR of 4.18 percent from 2007 to 2014. The growth is likely to be driven by the use of plastics in the appliances industry for reducing the weight of product, improve the design aesthetics, and the recyclable attributes. This growth can be sustained if the raw-material cost for plastic production is stable and the assured durability and structural integrity of the product is maintained. In 2007, the unit shipment for the structural cyanoacrylate adhesive for the rigid bonding sector was 0.84 million pounds growing at a rate of 3.3 percent and this trend is expected to continue throughout the forecast period. In 2014, the unit shipment is expected to reach 1.05 million pounds at a CAGR of 2.3 percent. #N340-39 © 2009 Frost & Sullivan www.frost.com 5-20