World Pressure Sensitive Tapes Current overview and future growth - PowerPoint PPT Presentation

World Pressure Sensitive Tapes Current overview and future growth Presented by: Anurag Yadav Scapa Group plc, UK Head of Global Product Portfolio Management

Methodology – Source of variance  Data derived from variety of sources.  Definitional differences.  Details may not add up to the totals due to rounding up.  Conversion from the national currencies to the USD may account for some statistical discrepancies  All GDP estimates are based on the PPP benchmarked in 2012, i.e., a year before the base used in this study.  Some narrative not factually correct, e.g., factory, office, product

PSA Overview Asia/Pacific  In 2003 accounted for 40% of world 4% PSA production North America 5%  In 2013 this stood at 55% 5% Western Europe Tape sales in more advanced economies 22% Asia/Pacific declined between 2008 – 2013: Central & South America  Western Europe slowed  Growth in the US at less than 1%. Eastern Europe Africa/Mideast Tape manufacturing: 15%  China is now world’s largest manufacturer , supplying to APAC, Eastern Europe, and North America. 49%  Taiwan and Indonesia also produce tapes mainly destined for export markets. Sales Volume- 39.3 bil m 2  Italy is Europe’s leading manufacturer , Average Sales Price- 1.03 $/m 2 supplying much of the market in both Western 2013 and Eastern Europe. Sales Value- bil $ 40.5 .

PSA Demand Overview  By 2018 world PSA sales will increase: 40,000  5% YoY to be 50 bil m 2  35,000 6.5% YoY in market value to be bil $ 55.5. 30,000 2013  Average selling price is Millions $ 25,000 2018 1.11 $/m 2  The greatest share of PSA production to 20,000 2023 be in the APAC region. 15,000  Carton Sealing tape will continue to account for over 2/3 rd of PSA sales. 10,000  The second largest category, Masking 5,000 tape sales will be driven by construction and automotive 0 production particularly in APAC. North Western Asia / Central & Eastern Africa /  Appreciable gains in specialized tapes . America Europe Pacific South Europe Mideast  Medical tape sales will increase due to America increased healthcare accessibility around the world.

Market Players The top four companies (20% of global share) Other significant Suppliers North America Intertape Polymer Group Shurtape Technologies 3M – bil $4 Europe Stokvis Tape Group (ITW) tesa – over bil $1 Scapa Group Boston Tapes (Chargeurs) Nitto Denko - over bil $1 Asia/ Pacific ACHEM Technology Four Pillars Enterprise Lintec - over bil $1 Sekisui Chemicals Zhejiang Yonghe

Market Variables Factors influencing PSA sales (most of which are external to the industry itself and beyond its direct control) are: Per Capita GDP Pricing Inflation Trend Spending Foreign Patterns Trade PSA Overall Consumer Economic Sales Income Health

World Economic Outlook (GDP) 60,000 2013 50,000 40,000 2018 Billion $ 30,000 2023 20,000 10,000 0 North America Western Europe Asia / Pacific Central & South Eastern Europe Africa / Mid East America   World GDP to expand 3.8% YoY through to 2018 Africa/Middle East GDP will rise by 4.1% YoY (faster than 2008 – 2013 but slower than 2003 – through to 2018.  2008). The rise in the middle classes will push this  China and India will continue to post growth rates demand higher in Nigeria and Sub Saharan Africa.  that are fastest in the world. Central and South America will see GDP rise to  Modest economic recovery in Western Europe will 3.5% through to 2018 , benefiting from strong support export oriented industries in Eastern growth in Chile, Colombia, and Peru. Brazil is Europe, sparking growth in the region. projected to have moderate advances in real GDP.

Market Environment GDP influences tape consumption pattern.  PSA sales is positively correlated to rising income levels.  The world’s developed economies (higher income levels) have the highest levels of per capita tape consumption.  USA and Taiwan 20 m 2 /capita  Developed countries exceeds 10 m 2 /capita  Developing world ranges between 1-5 m 2 /capita  The poorest areas of Africa and Asia have less than 1 m 2 /capita

Market Environment Pricing Trends Prices can vary between countries and regions due to: Environment  Local Inflation rates Compliance  Production Local demand. Energy Equipment  Availability of raw material Globally prices:  Range from 1 $/m 2 for commodity Labour Containers plastic tape used in undemanding applications to 40 $/m 2 for specialised industrial application  In 2013 average selling price was 1 $/m 2 however as this is linked to raw PSA Cost material costs it is set to increase Raw Materials Transportation Influencing mainly due to oil prices, which (by factors historical standards) will remain high through 2018.

PSA Key market verticals Following segments account for most of the PSA tapes used globally: Food and Beverage Healthcare Building and and Hygiene Construction Products Market Segments Electrical Automotive and Electronics

Market Environment Food and Beverage 2013 2018 2023 1.600 1.400 1.200 1.000 Billion $ 800 600 400 200 0 North America Western Europe Asia/Pacific Central & South Eastern Europe Africa/Mideast America

Market Environment Building and Construction 2013 2018 2023 8000 7000 6000 Billion $ 5000 4000 3000 2000 1000 0 North America Western Europe Asia/Pacific Central & South Eastern Europe Africa/Mideast America

Market Environment Automotive 2013 2018 2023 80000 70000 Vehicle production (‘000 units) 60000 50000 40000 30000 20000 10000 0 North America Western Europe Asia/Pacific Central & South Eastern Europe Africa/Mideast America

Market Environment Healthcare and Hygiene Products 2013 2018 2023 7000 6000 5000 4000 Billion $ 3000 2000 1000 0 North America Western Europe Asia/Pacific Central & South Eastern Europe Africa/Mideast America

Raw Materials  The use of backing and adhesive materials is expected to lag in the PSA market.  The trend is moving towards lightweight material or to down gauging (using thinner backings and adhesive coatings) for financial and environmental reasons.  The adhesive is the largest part of the costs associated with PSA, also the most critical component, as it determines how well it sticks.  Major players in the PSA industry are investing in solvent recovery systems to slow the transition to aqueous formulations.  Increased use of hot melt adhesives due to the environmental advantages such as:  Low energy requirements.  Lower production costs as opposed to solvent borne types.  The conversion from solvent to hot melt can reduce investment and coating cost considerably.

Tape Backing Materials Overall Demand Overview 50.15 bil m² Polypropylene Paper 39.3 bil m² Polyvinyl Chloride Others

Tape Backing Materials Overall Demand Overview 2018 Polypropylene 2013 Paper Polyvinyl Chloride Others

Tape Backing Materials Polypropylene Demand Overview 31.79 bil m² Polypropylene Paper 24.77 bil m² Polyvinyl Chloride Others

Tape Backing Materials Polypropylene Demand Overview 37% 12% 14% Polypropylene 26% 27% 36% Paper Polyvinyl Chloride Others  PP is expected to grow 5.1% YoY through 2018 – 31.8 bil m 2 .  PP accounted for 63% of total PSA in 2013, and accelerated gains for corrugated box will drive this growth through 2018.

Tape Backing Materials 2018 5% 4% Polypropylene Demand Overview 17% 5% 4% 5% 20% 5% 12% 2013 Asia/Pacific 13% Western Europe by 4% by 1% 53% Polypropylene 57% Paper Polyvinyl Chloride North America Western Europe Others Asia/Pacific Central & South America Eastern Europe Africa/Mideast  PP is expected to grow 5.1% YoY through 2018 – 31.8 bil m 2 .  PP accounted for 63% of total PSA in 2013, and accelerated gains for corrugated box will drive this growth through 2018.

Tape Backing Materials Paper Demand Overview 6.89 bil m² Polypropylene Paper 5.42 bil m² Polyvinyl Chloride Others

Tape Backing Materials Paper Demand Overview 31% 28.5% 14% 27% Polypropylene 22% 30% Paper Polyvinyl Chloride Others  Paper backed PSA tapes are projected to grow 4.9% YoY to 6.9 bil m 2 .  Masking tapes will drive this growth despite not being utilised in growing markets such as electronics and industrial bonding.  Paper tapes are more environmental friendly due to the recyclable and repulpable nature. This will help drive the sales.

Tape Backing Materials 2018 Paper Demand Overview 2013 Polypropylene Paper Polyvinyl Chloride Others  Paper backed PSA tapes are projected to grow 4.9% YoY to 6.9 bil m 2 .  Masking tapes will drive this growth despite not being utilised in growing markets such as electronics and industrial bonding.  Paper tapes are more environmental friendly due to the recyclable and repulpable nature. This will help drive the sales.

Tape Backing Materials Polyvinyl Chloride Demand Overview Polypropylene Paper 2.4 bil m² Polyvinyl Chloride Others 2.13 bil m²