Innovation, new markets & customer focus will drive growth in 2010

Written by Sajan C Kumar | Updated: Apr 29 2010, 04:14am hrs
Henkel is the global market leader in adhesives, sealants and surface treatments. It has built a well-balanced portfolio of international, regional and local brands, and offers a multitude of applications to satisfy needs of different target groups. Thomas Geitner, executive vice-president, Henkel Adhesive Technologies, visited India recently as part of the interaction process with major customers. In an exclusive interview with FEs Sajan C Kumar, Geitner shares his views on Indian adhesive market as well as global trends in the industry. Excerpts:

What are your plans for India What kind of presence do you have in the country as an adhesive manufacturer

In India, which is a focus area for Henkel, we see sizeable opportunities. The automotive sector, for example, is expanding, and the technology is constantly being upgraded in terms of safety, fuel efficiency and reduced emissions. This has certainly increased the demand for reliable adhesives, sealants and surface treatment solutions. The Indian economy is growing at a fast rate, and we already have several fully established manufacturing facilities for automotive, metal treatments, surface treatments and packaging adhesive businesses to ensure that we are close to our customers, and thereby offer best service to them.

What is your overall view of the current global adhesive market Did the global meltdown have any impact on the industry What is your companys market share

Adhesives are the hidden champions of everyday life.Though rarely noticed, they are all around us: cell phones, cars, aircraft, furniture, books, babys diapers, wallpaper the list of things that would not work without adhesives is endless. Adhesives are what we call a critical C component.

As we define it, the world market for adhesives, sealants and surface treatment products amounts to some 47 billion euros. It is a highly fragmented market, where the top 10 players represent 38% of the market share based on 2008 sales figures. With annual sales of 6,224 million euros, Henkel is holding the number one position in the adhesives market. During the financial meltdown, there was significant decline in production, particularly in the steel, automotive and electronics industries. The capital goods sector and the construction industry also registered heavy contraction. Even if the year was a difficult one, the adhesives market has lost none of its charm.

What, according to you, are the key factors driving the adhesive market And what would be the growth prospectus of the industry

There are four major trends are driving growth in the adhesives segment rising consumption in emerging markets, increasing importance of sustainable manufacturing of industrial goods, as in the automotive and aircraft sectors, the continuing trend towards replacing traditional techniques, such as welding or riveting, by structural bonding, and adhesive solutions for new fields of application in areas such as medicine or even agriculture. On a long-term basis, the world market for adhesives, sealants and surface treatments is growing annually by about 3 to 5 %.

What is your business model

With strong market positions across geographies, we provide our customer's broad-based applications and technology expertise, reliable global availability of consistently top quality from a single-source provider and customised local technical support. Many smaller companies do not have the scope to serve all of these needs. This makes us partner of choice.

How was the going during 2009 What is your business target for 2010 and beyond What would be the size of near-term investment to boost growth What were the challenges you faced and what were the major achievements during 2009

The previous year was a challenging one for Henkel. Sales of the adhesive technologies business sector, which generates almost half of overall sales, decreased by 7.1% to 6,224 million euros. Through accelerated realization of synergies arising from the integration of the National Starch businesses and by increasing efficiency and reducing cost, we were able to significantly improve our return on sales.

The future potential of bonding, probably the most advanced joining technology of today, is just as strong as ever and we are well positioned for generating profitable growth again in 2010. Our growth drivers will be innovation, business in the emerging markets and our strong customer focus. A key factor in this effort is our innovative power, as we invest some 4 million euros every week of the year in research and development activities for our adhesives.