The global adhesives market is projected to grow at 5.8% until 2020, with growth driven by sectors such as packaging, construction, and automotive, while India's adhesive market is expected to reach 379 thousand metric tons by 2020 at a CAGR of 9-10%. Key trends influencing this growth include urbanization, increased disposable income, and rising infrastructure projects, particularly in emerging economies like India and China. Competitive dynamics reveal low buyer bargaining power and significant opportunities in hot melt and water-based adhesives within strategic sectors like packaging and construction.

1. Akshatha Neeraje
Arjun Parekh
Pooja Rawat
Rohan Bharaj
Ronak Sharma
Vibhu Gauba

2. Adhesives Construction Chemicals

3. Global Scenario
North America and Europe expected to see a growth of only 3%
whereas Emerging Economies in in Asia like India and China are
expected to show growth of 6% and 8%

4. Global Scenario
0
2000
4000
6000
8000
10000
12000
14000
2015 2016 2017 2018 2019 2020
Volume(Kilo Tonnes)
Volume(Kilo Tonnes)
Strict regulatory
compliance
Fluctuation in
prices of key raw
materials
Dominated by large
companies
C
H
A
L
L
E
N
G
E
S
Worldwide market expected to grow at
5.8% till 2020 to 13000 KT
Indian Imports and Exports Limited to Asia

5. Adhesive Industry
• Growth driven by packaging, construction and automotive sectors
• Increase in disposable income levels, rising GDP and booming retail markets
propel growth in flexible packaging industry
• Rapid urbanization coupled with growing infrastructure and real estate
construction projects fuel the demand for adhesives
Adhesives market in India is anticipated to reach 379
thousand metric tons by 2020 at a CAGR of 9-10%.

6. Adhesive Industry
Reactive
Water based
Hot melt
Solvent based
VOLUME SHARE BY TECHNOLOGY TYPE (2015)
40%
14%
30%
16%
Pidilite
Henkel
Sika
Others
MARKET SHARE BY COMPANY (2015)
6%
24%
62%
8%

7. Indian Adhesive Market
•PVAc Adhesives
•Cyanoacrylate Adhesives
•Epoxy Adhesives
•Silicone Sealants

8. Key Applications Areas of Adhesives
Packaging is the largest end-use application for adhesives and still holds a huge scope; use of
adhesives in automobile and construction industries is expected to increase in the near future.
Industry Application
Paper Board and Packaging
Packaging is the largest market for adhesives. Most packaging materials used nowadays are different materials laminated
together and adhesives are used for this purpose, thus giving packaging a commercially alluring appearance
Building and Construction
Adhesives are used in a variety of applications in building and construction including flooring underlayment, flat and drywall
lamination, sandwich construction, profile wrapping, prefinished panels, edge bonding, tilling, carpet layment, etc.
Furniture
In the furniture-making industry, polyvinyl acetate dispersion adhesives are widely used. Others such as melamine-
formaldehyde resins, polyurethane (PUR) adhesives, hot melts, etc. are also used in various bonding and laminating
applications.
Automotive
Adhesives are used in bonding metal sheets in vehicle bodywork construction, car carpets, bonding panes of glass into car
bodywork, sound damping, bonding and lamination interior, etc.
Electronics
In this segment, adhesives find application mostly in cable filling/jelly compounds, cable insulation compounds, electronic
circuits, etc. In some cases, adhesives are preferred over solder joints, as they are lead-free and less vulnerable to heat.
Lifestyle
This segment includes applications in textiles and apparel laminates, mattresses, fabric combining, footwear and leather goods,
etc.
Consumer/DIY This segment includes applications in decorative films, hobby supplies, school crafts, and stationery products.
Others Road construction, plastic processing, medical applications, aircraft and aerospace, etc.

9. Mega Trends in Adhesives
Urbaniza
tion
Bricks
and
Clicks
Economic
Trends
New
Business
Models
Social
Trends
Health
Wellness
& Well
Being
Mega
Trends
Green
Products
Last Mile
Connectivity
Convenience
Packaging
Quick Cure
Technological
Advancement
Strong
Bonding
Properties
Key Developments in Adhesives
Addressing the Trends

10. Company
• Pioneer in consumer and speciality chemicals in India
• Over 2/3rd of sales from products and segments pioneered in
India
• Consolidated Revenue of Rs 53,695 million in FY 15-16
• Well established R&D set-up – Most products developed through
in-house R&D
• Wide geographic presence – Domestic & International

11. Indian Adhesive Market
PVAc Adhesives Market
Market Split – By Companies
The furniture industry,
which accounts for
41.0% of PVAc
consumption, is highly
unorganised, resulting
in ~75% of sales to the
segment occurring
through retail
channels.
Cyanoacrylate Adhesives
Market Split – By Companies
Pidilite’s Fevikwik is
synonymous with
cyanoacrylates in
India, indicative of its
brand recall with
consumers and
tradesmen alike.

12. Business Segments

13. FINANCIALS

14. Source: Pidilite Annual Report 2015-16

16. 10,340
12,698
16,002
19,009
22,190
-
5,000
10,000
15,000
20,000
25,000
2011-12 2012-13 2013-14 2014-15 2015-16
RsinMillion Growth in Reserves & Surplus

17. Financial Ratios – Pidilite Industries Ltd.
Source: money.livemint.com
Cash to Cash Cycle = 42+40-33 = 49 Days | Hence, money rolled 7 times in a year
This means that the investors are
ready to pay ₹5.92 for every ₹1 sale
made by Pidilite

18. Financial Ratios – Atul Ltd.
Source: money.livemint.com
Cash to Cash Cycle = 58+56-49 = 65 Days | Hence, money rolled 5 times in a year
This means that the investors are
ready to pay ₹1.73 for every ₹1 sale
made by Atul Ltd.

19. COMPETITON ANALYSIS

20. Can leverage the extensive
distribution network
2nd largest adhesives brand
in India
DOMESTIC
PLAYERS

21. Built the largest
adhesives plant in
India in the city of
Pune that will be
operational in the H1
2017
INTERNATIONAL
PLAYERS

22. Since 2000
 11 - Acquisitions in India
 3 - International subsidiaries in Singapore, Brazil and Middle East
 2 - Acquisitions in Singapore and Dubai
 1 - JV with a US based Company

23. Growth opportunities
1. Infrastructure
Construction sector contributes to more than 8% of India’s GDP and is the
second largest employer and contributor to economic activities
Government’s emphasis is on infrastructure and housing as urban
development schemes and industrial corridor projects are being expedited.
• Adhesive manufacturers must focus on delivering product value by meeting expectation in terms
of technical performance such as tensile strength of the joints, adhesion runtime, etc.
• Considering the low awareness, price-sensitive nature and commoditisation of adhesives market in
construction industry, technical performance must also be backed up by economic feasibility such as
cost of adhesive materials and labour required.

24. Growth opportunities
2. Packaging
The Indian packaging industry is growing at an annual rate of about
7% and is expected to grow at the same rate in the next five years.
Macroeconomic factors such as favourable demographics and increase in
disposable income are also in favour of the growth of the packaging industry.
• Companies must focus on offering products for a wide range of applications such as sealing, labels,
tapes, etc.
• Products need to be designed based on different temperature needs and adherence to a variety of
substrates.

25. Growth opportunities
3. Woodwork and furniture sector
It has been the major growth driver for adhesives in India.
Indian furniture Industry is estimated at around Rs 710 bn (Source:
Annual Report-2013 Greenplay Industries Ltd) and is estimated to grow at 25-30%
CAGR over the next few years (Source: Ernst & Young).

26. Growth opportunities
• Water-based adhesives are projected to hold a share of around 42% of the country's adhesives
market by the end of 2019.
• With upcoming infrastructural projects such as railway tracks, metro rails as well as new wind
energy farms, the country is set to witness a strong growth in the adhesives industry over the
next five years.
• Automotive adhesives are expected to witness growth as the demand for lightweight and
composite joining adhesives from automobile manufacturers continue to increase.

27. New Emerging Applications Segment
 Owing to major government initiatives such as Digital India, Make in India, and favorable
FDI policies for electronics manufacturing, adhesives industry is expected to grow at a
CAGR of 9-10% till 2020.
 Demand for maintenance, repair, and overhaul (MRO) facilities is increasing in India due
to growth in the aviation sector.
 Demand for hot melt adhesives
Call to Action
Invest in R&D centers to develop high performance adhesive properties such as fast
solidification, rapid bond formation and glue guns
Focus on high temperature adhesives such as epoxy, silicone which find application in
electronics, aerospace, etc.
Strategic tie-ups with MNCs for manufacturers targeting emerging applications.

28. Critical Success Factors for Growth
•High performance adhesives at affordable prices especially in the largely
commoditized construction industry
•Wider temperature ranges and different substrate types for packaging industry
•Strategic tie-ups with MNCs and investment in R&D capabilities
•Hedging raw material costs that are dependent on movement in oil prices

29. Market-Attractiveness/Competitive-Position Matrix

30. Strategy
We suggest that Pidilite opt for a NICHE strategy, entering into the area of hot-
melt adhesives as it is a fast growing category and Pidilite’s presence in the
industrial adhesives and chemicals segment is not that strong.

31. • Expected to reach
$9.64b by 2020
Growing at 6% CAGR
• Global market stood at
around 1,500 kilo tons
in 2014
• Focus on packaging
• Widely used due to its low
cost and better performance.
• Its formulation that can
withstand temperatures as
low as -40 °C and humid
environments
• Asia-Pacific is the largest
market for hot melt adhesives
• Great distribution
network
• Brand recall value
is extremely high

32. Porter’s 5 Forces
Industry Rivalry:
• Globally is hugh, but in India it is low
• Competitors in the segment: Henkel AG, The 3M Company,
Sika AG, Bostik smart adhesives, Huntsman Corporation
Bargaining power of Supplier:
• Low
Bargaining power of buyer:
• Low due to the absence of any local brands in India. Despite
the industry growth, currently no foreign brands have entered
the Indian Market yet, we can be the first mover advantage.
Threat of substitutes:
• Low. Due to its cost effective nature it is used as a substitute
infact to other adhesives.
Threat of new entrants:
• Medium. Though local players can’t affect Pidilite brand and
its products, the International players can still decide to enter
the segment

33. Uses of Hot Melt Adhesives (HMA)
• Carton sealing and labeling applications in the packaging industry
• Spine gluing in the bookbinding industry
• Profile-wrapping, product assembly and laminating applications in the woodworking industry
• Disposable diapers, bonding the non-woven material to the back sheet and the elastics.
• Electronic device manufacturers use an HMA to affix parts and wires, or to secure, insulate, and protect the
device's components.
• HMA are regularly used to assemble and seal corrugated boxes and paperboard cartons.

34. Brownie points?... Yes Please!
•Is the leader an intelligent fanatic? Highlight example of ingredients Intelligence, Integrity and Energy!
Fevicol Champions Club
Fevicol bonded over 42000 woodworkers and contractors, in a unique pan-India community initiative –
SHRAM DAAN DIVAS on December 20th and 21st December 2015. These woodworkers and contractors
donated a day’s labour free of cost to repair and refurbish furniture at around 800 NGOs, beneficiary schools,
hospitals and institutions for underprivileged children. It is expected to have impacted and benefited the lives of over
60,000 children in more than 320 cities across the country.
•What are you doing that your competitors aren’t doing yet? How do they create strong entry barriers for competitors?
By talking to the carpenters directly.
Creating Membership Clubs
•What’s not going to change in the next 10 years?
The leadership position of Pidilite in the adhesives market
•What is their competitive advantage and how sustainable is it? If their competitor had unlimited resources, how quickly could
they duplicate the company’s competitive advantage? How could you hurt this business?
Their brand is their competitive advantage