 "Adhesives market growth is driven through disruptive innovation: M V Ganeshan")
Bostik, a part of the France-based specialty chemicals & performance materials maker Arkema, is one of the global leaders in adhesives, which are used in industrial manufacturing, construction and consumer markets.
Since its inception in India in 2001, Bostik has entered several new segments such as footwear, flexible packaging, construction, tapes and labels, disposable hygiene and transportation. Over the years, the company has serviced the adhesive industry through its R&D centre and manufacturing plants in Bangalore.
In line with its ambition to expand in high growth regions, Bostik added a hot melt pressure sensitive adhesives (HMPSA) production unit in Bangalore in July this year. The new plant in India represents the latest milestone in the Bostik group’s international expansion following recent plant openings in China, Malaysia and Brazil.
Recently, Bostik expanded its hot melt pressure sensitive adhesives (HMPSA) production in Bangalore. What was the rationale for this expansion?
HMPSA for the disposable hygiene sector is the fastest growing adhesive segment in India. Bostik is a global leader in such adhesives. Focus on lead technology platforms is one of the pillars of Bostik strategy - and HMPSA is one of the company’s lead technology platforms.
Growth in emerging regions (such as India) is also one of the pillars of Bostik’s strategy. The new Bangalore facility will particularly enhance our ability to serve customers in the disposable hygiene sector. Bostik works with global manufacturers of baby diapers, feminine hygiene and adult incontinence products. This expansion is a logical step.
ALSO READ: French firm Arkema expands Bostik adhesives facility in Bangalore
Finally, our customers in these segments are investing very heavily in their expansion programs and new Indian customers are opening in new facilities to enter this segment. Therefore expansion of our HMPSA capabilities was a strategic decision and one which is fully aligned with our customer requirements.
How has Arkema takeover benefited Bostik (globally and in particularly India)?
Bostik represents 20 percent of Arkema's turnover and is the largest contributor in sales terms in Arkema’s high performance materials segment. Both Arkema and Bostik have a similar DNA there is considerable similarity in thought and alignment in operations between them.
Both Arkema and Bostik have a culture of innovation in their DNA. Furthermore, the integration with Arkema has brought in synergies in technology & innovation, purchasing, operational excellence, and complementary commercial activities with common customers & markets.
How is market for adhesives in India?
The adhesives market in India is growing strongly through disruptive innovation. The growth rates differ across the various adhesives segments. The fastest growing segment in adhesives is the disposable hygiene market followed by footwear, flexible packaging and construction.
What is driving the demand for adhesives in India?
Adhesives play a very important role in all the segments in which they are used. The main drivers for adhesive demand in India are modern technology, smart innovation, demographic shifts (rising disposable income, changes in cultural norms, etc) and exposure to international technology.
With the government initiating Make in India programme to revive manufacturing sector, how conducive is the present situation to encourage adhesives manufacturing in India? What are the key challenges?
The initiative of the government through the Make in India program is encouraging. Recently, we inaugurated a facility to manufacture hot melt pressure sensitive adhesives. This is in line with Bostik’s strategy of ‘Growth in emerging regions’. India is a land of opportunities and our strategy will ensure that we can take advantage of the potential that exists.
What are the emerging trends in adhesives industry (globally & in India)?
The dominant trend in the adhesives industry is where customers have adopted a global outlook and are continuously demanding solutions which are smarter and deliver real and tangible benefits.
ALSO READ: Henkel to invest Rs 220-cr to build India's largest adhesives plant near Pune
The emerging trends in the adhesives industry are shift from mechanical fastening to chemical bonding; strong loyalty to brands; increasing living standards in emerging economies, and consolidation in what is still a fragmented industry.
Are you working on any India specific product range? Do you use Indian facility to exports?
We always work very closely with our customers in all segments and participate in their innovation programs.
The Indian facility exports to our neighbouring countries as well as some countries in the Middle East and East Africa. Bostik is present in over 40 countries in the world and we work in conjunction with other Bostik affiliates to service the needs of international customers.
Disposable hygiene sector is one of the key target sectors for Bostik in India. How has this market performed in the last couple of years & what are your expectations for future?
The disposable hygiene sector is the fastest growing adhesive segment for Bostik in India. According to the Euromonitor, the annual growth in the hygiene market in India is currently 112 percent. The high growth rate is partly explained by the relatively low market penetration of these products at the moment.
ALSO READ: Pidilite buys adhesives business of PVAC in Sri Lanka
Some of the main drivers of growth include demographic shifts (including increasing disposable income, changes in cultural norms to use more western methods, eg disposable products); push by large consumer packaged goods (CPG) companies to increase penetration, and leapfrogging by the manufacturers ie when producers add new manufacturing lines, they add the new technology meaning there is quicker migration to the latest product and adhesive technologies.
Besides disposable hygiene sector, which are the other sectors that you are banking on growth in India? And why?
The Indian market for flexible packaging is growing well and will continue to grow over the coming years. The Indian footwear industry is not only growing on account of domestic demand, but also because of exports. We see these two segments as major growth areas for Bostik India. Similarly, the construction industry in India is growing but also modernising. Therefore adhesive demand in this segment is growing at an extremely high rate. Bostik has considerable expertise and advanced offerings for the construction sector so is targeting strong growth in India.
What are your expansion plans in India? Are you looking for any acquisition?
Our expansion plans in India will focus on growing organically through our lead technology platforms. However, we will also like to look for opportunities to grow through acquisition and will consider acquisitions which would complement our strategic vision in terms of technology or strategic markets.
What is your outlook for adhesives market in India?
The adhesives industry in India is evolving but following a similar pattern to other markets which are becoming increasingly globalised. The industry is keen and is quick to embrace new ideas. It wants smart adhesives which are safer, efficient, flexible and responsive. In other words, adhesives which do more than simply stick things together.
Since its inception in India in 2001, Bostik has entered several new segments such as footwear, flexible packaging, construction, tapes and labels, disposable hygiene and transportation. Over the years, the company has serviced the adhesive industry through its R&D centre and manufacturing plants in Bangalore.
In line with its ambition to expand in high growth regions, Bostik added a hot melt pressure sensitive adhesives (HMPSA) production unit in Bangalore in July this year. The new plant in India represents the latest milestone in the Bostik group’s international expansion following recent plant openings in China, Malaysia and Brazil.
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In conversation with Rakesh Rao, M V Ganeshan, managing director, Bostik India Pvt Ltd, offers an insight into adhesives market in the country and the company’s growth plan to serve the end-user industries.
Recently, Bostik expanded its hot melt pressure sensitive adhesives (HMPSA) production in Bangalore. What was the rationale for this expansion?
HMPSA for the disposable hygiene sector is the fastest growing adhesive segment in India. Bostik is a global leader in such adhesives. Focus on lead technology platforms is one of the pillars of Bostik strategy - and HMPSA is one of the company’s lead technology platforms.
Growth in emerging regions (such as India) is also one of the pillars of Bostik’s strategy. The new Bangalore facility will particularly enhance our ability to serve customers in the disposable hygiene sector. Bostik works with global manufacturers of baby diapers, feminine hygiene and adult incontinence products. This expansion is a logical step.
ALSO READ: French firm Arkema expands Bostik adhesives facility in Bangalore
Finally, our customers in these segments are investing very heavily in their expansion programs and new Indian customers are opening in new facilities to enter this segment. Therefore expansion of our HMPSA capabilities was a strategic decision and one which is fully aligned with our customer requirements.
How has Arkema takeover benefited Bostik (globally and in particularly India)?
Bostik represents 20 percent of Arkema's turnover and is the largest contributor in sales terms in Arkema’s high performance materials segment. Both Arkema and Bostik have a similar DNA there is considerable similarity in thought and alignment in operations between them.
Both Arkema and Bostik have a culture of innovation in their DNA. Furthermore, the integration with Arkema has brought in synergies in technology & innovation, purchasing, operational excellence, and complementary commercial activities with common customers & markets.
How is market for adhesives in India?
The adhesives market in India is growing strongly through disruptive innovation. The growth rates differ across the various adhesives segments. The fastest growing segment in adhesives is the disposable hygiene market followed by footwear, flexible packaging and construction.
What is driving the demand for adhesives in India?
Adhesives play a very important role in all the segments in which they are used. The main drivers for adhesive demand in India are modern technology, smart innovation, demographic shifts (rising disposable income, changes in cultural norms, etc) and exposure to international technology.
With the government initiating Make in India programme to revive manufacturing sector, how conducive is the present situation to encourage adhesives manufacturing in India? What are the key challenges?
The initiative of the government through the Make in India program is encouraging. Recently, we inaugurated a facility to manufacture hot melt pressure sensitive adhesives. This is in line with Bostik’s strategy of ‘Growth in emerging regions’. India is a land of opportunities and our strategy will ensure that we can take advantage of the potential that exists.
What are the emerging trends in adhesives industry (globally & in India)?
The dominant trend in the adhesives industry is where customers have adopted a global outlook and are continuously demanding solutions which are smarter and deliver real and tangible benefits.
ALSO READ: Henkel to invest Rs 220-cr to build India's largest adhesives plant near Pune
The emerging trends in the adhesives industry are shift from mechanical fastening to chemical bonding; strong loyalty to brands; increasing living standards in emerging economies, and consolidation in what is still a fragmented industry.
Are you working on any India specific product range? Do you use Indian facility to exports?
We always work very closely with our customers in all segments and participate in their innovation programs.
The Indian facility exports to our neighbouring countries as well as some countries in the Middle East and East Africa. Bostik is present in over 40 countries in the world and we work in conjunction with other Bostik affiliates to service the needs of international customers.
Disposable hygiene sector is one of the key target sectors for Bostik in India. How has this market performed in the last couple of years & what are your expectations for future?
The disposable hygiene sector is the fastest growing adhesive segment for Bostik in India. According to the Euromonitor, the annual growth in the hygiene market in India is currently 112 percent. The high growth rate is partly explained by the relatively low market penetration of these products at the moment.
ALSO READ: Pidilite buys adhesives business of PVAC in Sri Lanka
Some of the main drivers of growth include demographic shifts (including increasing disposable income, changes in cultural norms to use more western methods, eg disposable products); push by large consumer packaged goods (CPG) companies to increase penetration, and leapfrogging by the manufacturers ie when producers add new manufacturing lines, they add the new technology meaning there is quicker migration to the latest product and adhesive technologies.
Besides disposable hygiene sector, which are the other sectors that you are banking on growth in India? And why?
The Indian market for flexible packaging is growing well and will continue to grow over the coming years. The Indian footwear industry is not only growing on account of domestic demand, but also because of exports. We see these two segments as major growth areas for Bostik India. Similarly, the construction industry in India is growing but also modernising. Therefore adhesive demand in this segment is growing at an extremely high rate. Bostik has considerable expertise and advanced offerings for the construction sector so is targeting strong growth in India.
What are your expansion plans in India? Are you looking for any acquisition?
Our expansion plans in India will focus on growing organically through our lead technology platforms. However, we will also like to look for opportunities to grow through acquisition and will consider acquisitions which would complement our strategic vision in terms of technology or strategic markets.
What is your outlook for adhesives market in India?
The adhesives industry in India is evolving but following a similar pattern to other markets which are becoming increasingly globalised. The industry is keen and is quick to embrace new ideas. It wants smart adhesives which are safer, efficient, flexible and responsive. In other words, adhesives which do more than simply stick things together.