Strategy

Winning in a More Dynamic & Inclusive Market

by Dr Christian Kirsten, Corporate Senior Vice President Transport & Metal and Head of Adhesive Technologies Asia Pacific, Henkel

If the past year taught us anything, it’s that the world is becoming an unpredictable place where change is the only constant. In Asia Pacific, the convergence of economic, technological, customer and regulatory forces are remaking the market into a more dynamic, inclusive playing field.

With this transition, we can expect to see consistent demand for reliable products, breakthrough technology and innovative high-impact solutions. This is why the market is confident that demand for adhesive technologies will surge across multiple industries, including automotive, flexible packaging, goods assembling and general manufacturing.

Productivity enhancement solutions widely spread across industries

A sluggish world economy, together with rising labour costs and slowing worker productivity gains, are challenging every global company doing business in Asia Pacific. The need for cost-effective and productivity-enhancing solutions is unprecedented. Serving as key activators in multiple industries to expedite automation and modernisation, adhesive technologies are set to benefit.

In the automotive industry, for example, adhesives and sealants help original equipment manufacturers (OEMs) bond different substrates of metal, eliminating the need for welding and mechanical rivets. These adhesive products are making strong inroads in the industry, as car makers and OEMs see the clear benefits of new materials, a simplified manufacturing process and related cost savings.

A recent market report estimates that the automotive adhesives market will grow from US$4.03bn in 2016 to US$6.05bn by 2021 at a compound annual growth rate of 8.5 per cent. The adhesive market shares that optimism and will partner with our customers and deliver leading technology, exciting innovation and superior customer engagement across the value chain.

For example, across the region, Henkel solutions – including our adhesive and sealant offerings for automotive components as well as our thermal solutions for electronics – are widely applied in top-selling premium automobiles and cutting-edge new energy vehicles. The Henkel-owned two-step surface treatment method enables pretreatment of body shells with an aluminum content of up to 100 per cent while reducing waste and the use of energy and chemicals. This process allows the region’s top vehicle manufacturers to reduce costs and enhance productivity. Henkel is also playing a game-changing role in providing sound-deadening solutions to car manufacturers by replacing bitumen mats with a new generation water-based material, which can be sprayed onto car bodies with robots to increase production efficiency significantly.

Consumers demanding high-quality, safe products

Also set to surge is the use of adhesive technologies in a vast array of consumer goods – everything from daily care products to medical devices.

As incomes rise in Asia, the region’s rising middle class is more optimistic than it is in the most mature markets. Some 73 per cent of respondents from Southeast Asia believe that they’ll fulfill their biggest dream in their lifetimes, according to a recent AIA Group survey, which will lead to higher consumer spending. In addition, consumers are becoming more sophisticated, particularly those from the upper middle class and those 35 years old and younger. In China, 81 per cent of consumption growth from now to 2020 will come from those with annual household income over US$24,000. Chinese consumers 35 or younger will drive 65 per cent of that growth.

An important component of growing consumer sophistication is the demand for high-quality and safe products.

In the healthcare industry, the growing importance of adhesive dentistry contributes to the global medical adhesives market growth, projected to reach approximately US$10bn by 2019. Growth in this segment in Asia Pacific is expected to outpace that of both the US and Europe as more manufacturing shifts to the region.

Adhesive technologies are also enabling a host of innovative features and improvements in such medical care products as syringes, ducts and surgical masks. Bio-sensitive conductive ink and thermal management materials are also meeting increasing demand in products such as blood glucose monitor testing paper. Other healthcare applications made better by adhesive technologies are drug delivery systems, catheters, implants and therapeutic devices.

Entrepreneurs demand high-impact solutions

Entrepreneurs in Asia are leading global development in drones. And China is leading its global rise, with five out of the world’s top 11 venture capital-funded drone companies from the country. This industry uses adhesive technologies to improve efficiency and safety across joints in the latest- to next-generation commercial drones. This is why the market needs to provide tailor-made solutions to meet the needs of many of the region’s drone manufacturers, offering higher reliability and stress resilience.

Thriving in volatile markets with increasing agility from within

Productivity enhancement, evolving consumer demand and new technologies exploitation are constantly driving adhesives demand. And in a turbulent business environment, every company must increase agility to rapidly adapt and steer itself to spot and exploit these growth opportunities.

In response to an innovation and disruption cycle shorter than ever before, Henkel will leverage the Henkel Adhesives Innovation Center (HAIC), located at the company’s regional hub in Shanghai, to take advantage of close proximity to local customers. By fostering a stronger entrepreneurial spirit in our highly energised and empowered teams, we aim to drastically reduce our innovation development and response time to address the Asia Pacific’s unmet market needs.

About the Author

Christian Kirsten is Corporate Senior Vice President for the Adhesive Technologies division Transport & Metal at Henkel. He is also responsible for the entire Henkel Adhesive Technologies business in Asia-Pacific. He is member of the Adhesive Technologies Executive Committee and serving in his current position since 2013.

Before taking his current assignment Christian held several leadership positions within Henkel. Among others he headed Global Strategy & Business Development for Henkel’s Adhesive Technologies business as well as Global Purchasing of Raw Materials for the Henkel Group. Outside of Henkel Christian gained professional experience as Strategy Consultant for Accenture and as Director for Strategic Sourcing at a leading Automotive Supplier. Christian has over 20 years of professional experience in the Chemical, Consumer Goods and Automotive industry.

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