Adhesives, sealants and fillers market pivots as prices rise

by | May 16, 2022

Silicone shortages turned the adhesives, sealants and fillers market on its head last year and saw prices rise to unprecedented levels. Now that prices have steadied and suppliers have had a chance to catch their breath, many have since implemented innovative strategies to combat supply.

silicone, adhesives, sealants and fillers shortage

Soudal has always maintained a firm focus on sustainability when it comes to developing its adhesives, sealants and fillers’ products, however more recently Soudal has developed products that combat silicone-based product shortages.

In the past six months silicone supply has waned due to factory emission restrictions in China as well as substantial reductions in electricity supply within the region last year. Soudal Managing Director, Robert Watters, says while there have been serious issues with supply of silicone-based products – and many building materials across the industry recently, ongoing price rises are also proving challenging as shipping costs continue to surge.

“Silicone shortages were predominantly detrimental to electrical technologies and the medical sector. This has led to priority supply to these markets due to higher prices paid, hence the impact on supply and pricing in traditional construction markets,” Mr Watters said.

“As the shortages took hold, Soudal went on to develop its new HMX technology silicone equivalent which is expected to perform exceptionally well against traditional silicone products. The new product is a silicone alternative and will sell for the same price as silicone-based products 12 months ago. It is a real game-changer and will be available in the next few months,” he says.

Although silicone shortages have affected many suppliers, Soudal has set its focus on the uniqueness of its products and will leverage its sales from there.

“The silicone market is a commodity product and although the volatility has made many cautious about how they manage pricing and supply moving forward, this is also the reason why the HMX technology is such a great backup, and will ensure our key resellers maintain a competitive edge,” he said.

“I believe Soudal has operated exceptionally well overall throughout the supply chain issues and price increases by cleverly utilising the 25 manufacturing plants we have worldwide. We are one of a few companies that can totally manage our own quality supply. This minimises price impact and also ensures that we have full control of all distribution centres worldwide. Sometimes there are products that have more stringent requirements to other parts of the world due to variations in environments and construction methods, so we are constantly testing products to ensure we meet local construction requirements.”

“All Soudal products meet European standards which in most cases are more stringent than Australian standards so this keeps us on the forefront of global standards. One particular example of this is that our silicones are nontoxic, low in VOC, have no MEK in many cases, are suitable for drinking water applications and are also antibacterial. This means users do not require the PPE to be worn during usage as is often the case with many competition products,” Mr Watters said.

It is Soudal’s uniqueness that ensures its new products create a lot of interest when salespeople take the product to market because Mr Watters says, “Soudal does not spend a lot of time shifting sand from one place to another.”

“Shifting sand means you stay as a me-too supplier with me-too products. Innovation is what drives us but this also means our salespeople have to get out into the market and demonstrate our products. Retailers keep wanting to do the old same thing over and over again and expecting a better result but this will never happen until merchants are prepared to look at what is new in the market,” he said.

“The market is super competitive and silicone is like a bottle of milk, everybody wants to give it away. However our silicones are unique due to their ease of application and consistency in quality. Our uniqueness ensures we add value to any tradesman’s experience by making the job easier, saving time and end-users can see the value in what they pay for our product.”

“Soudal’s philosophy is ‘once we get them trying a Soudal product we generally have them through quality and value’. We continually do well across specialist trade markets because retailers understand how easy it is to extract value from being a Soudal reseller,” Mr Watters said. 

Just some of Soudal’s unique products, which Mr Watters says “sell themselves” include the TRex adhesive, Genius Gun Reusable Foam, Soudagum Hydro Waterproofing Membrane, a flexible foam for door jambs, 2C 10 Second Dry Extreme Superglue, as well as the SMX Hybrid Multibond Expansion Jointing Sealant. 

“One product that stands out when it comes to uniqueness is the TRex Sealant and Adhesive with superior bonding strength that fixes, bonds and seals anything while also working underwater. Users can seal a hole in the gutter by simply caulking straight onto the surface even if fully underwater where it will cure via moisture.”

“Soudagum Hydro is also a waterproof repair based on TRex technology that enables users to paint on a waterproof membrane over a wet surface or even underwater. Other products require a clean and dry surface before application – there is nothing else like it,” he said.

“Recent successful product releases include Soudal’s Soudabond Subfloor – an amazingly strong adhesive that is applied with a one-metre-long gun to improve install time by up to 50 per cent along with a 30 per cent cost reduction. Its strength is so rigid it eliminates floor squeaks and prevents tradesmen from having to crawl along timber beams on their knees and change the equivalent of 12 cartridges to one pressurised can of subfloor adhesive. This product really is a must for any carpenter implementing subfloor installs.”

“Other newly launched products include Soudabond Easy, a no-mess super strong, aerated concrete block adhesive, as well as Soudabond Dry Wall, a new gun foam adhesive for strong adhesion of plasterboard and no mess application by hand trigger gun. We also have a high-quality Antimoss spray for driveway pavers that will be a real opportunity for resellers, along with a unique self-levelling polyurethane joint sealer for horizontal joints up to three millimetres gradient that will save jointers hours in application. There is so much more and most products add value by saving time, money or simply providing a better solution,” Mr Watters said. 

Looking ahead to 2022/23, Soudal has several product launches planned, with its focus reaching far beyond silicone-based products. 

Innovation will continue to drive the market as it has in the past, according to Mr Watters who pointed out that it was only a few short years ago that Soudal had the only hybrid sealants in the market through the use of its SMX® Polymer Technology. 

“Last year Soudal celebrated its Fix ALL range being in the market for 25 years and 10 years for the T-Rex range. Now almost everyone has attempted to copy our T-Rex products. Soudal expects its newly launched HMX products to be another technology that will be well recognised throughout the market for many years,” he said.

For now, Soudal will continue to move its products to 80 per cent recycled packaging, along with adhesive products that are made from (up to) 80 per cent recycled material throughout 2022 and beyond.

CW Brands re-launches entire range 

CW Brands Director, Oliver Dartnall, says hybrid varieties are just some of the products that will remain on-trend this year.

Late last year silicone supplies became so dire that the price of silicone sealants tripled overnight. Six months on CW Brands Director, Oliver Dartnall, says the segment is yet to recover after silicone prices jumped from $3 per kilogram to over $12 per kilogram within a matter of days.

“I believe the market is only just coming to terms with the shortages and is starting to catch up to the new price levels. There is definitely a new price point within this category because the pricing from six months ago is just not obtainable anymore.”

“The issues are global, affecting European, Asian, American and Australian suppliers. We were pretty much told that if we wanted the product, we had to pay the higher price or we just would not receive it,” he said.

While Mr Dartnall agrees there are alternative hybrid products for some applications, traditionally alternate products are dearer than silicone, so the price rises in silicone only brought the silicone product in-line with other technologies. 

“To combat shortages we encouraged customers to use alternative products but in reality, the price issue cannot be resolved and the market has to accept the new pricing,” he said.

With supplies now stabilising, CW Brands has managed to regain healthy stocks of silicone sealant products by maintaining strong supplier relationships and also ordering products a long way in advance.

“With everything that has happened over the last two years the new norm is to plan well in advance and make sure you give yourself an extra eight weeks for stock to arrive. There is so much uncertainty within the world we need to make sure we have stock so our clients have what they need to run their businesses efficiently. If you order products just in time it is a tricky position to put yourself in because chances are you will not get it when you need it,” Mr Dartnall said.

When looking at current market trends, hybrid varieties are just some of the products that remain on-trend within this sector and continue to take some of the market from silicone and polyurethanes, Mr Dartnall said.

“Basically this is a hybrid product that takes the advantages of silicone and polyurethane technology and combines them together. It really is a versatile, stable, top-of-the-range product. There are less solvents with it and more applications which is why it is so popular within the sector currently,” he said.

“This is not to say this is a product that will do everything but it is particularly popular because it has advantages over other technologies and is very versatile. A lot more global manufacturers are moving towards this type of technology as well,” he said.

For CW Brands 2022 will be a significant year of innovations with the re-launch of its entire range to be completed over the coming months. Mr Dartnall says the re-launch will include broadening the range and a new packaging design that will better define the product to its customers.

“Taking place right across the sealants and adhesives range, the re-launch will include all of our GSA cartridge products whether this is acrylic gap fillers, adhesives, professional silicones, expanding foams, hybrid sealants, and our fire rated products. We are relaunching the entire range with a few new offerings as well.”

“While the range itself is, in essence, staying the same, it will just have a few tweaks to better define the categories throughout the portfolio. This will be on the packaging primarily while also pushing the hybrid and low VOC products as well,” he said.

While CW Brands prides itself on moving quickly when introducing new products, Mr Dartnall believes that its point of difference lies with an ability to deal with major manufacturers on a global scale.

“While we are not a sealant manufacturer, we do have the ability to deal with many manufacturers worldwide. CW Brands now has many avenues to manufacturers who produce some of the best products in the world. This allows us to have access to manufacturers who give us the opportunity to be very competitive price-wise on a different range because not all products can be the best in the industry and the cheapest at the same time,” he said.

“CW Brands has an offering that ranges from its DIY level of products right through to the extreme professional. Our range is wide and products are competitive and fast-moving. With manufacturers located in Europe, the US and also the Australasian region, our manufacturing choices really depend on who is the best fit for a particular product.”

“Some manufacturers are great at professional products while others are good at producing products with an attractive price point which is why we deal with whatever company fits the need of that particular product,” Mr Dartnall said.

While competition does remain fierce within the adhesive, sealants and fillers sector, CW Brands is thankful it has the ability to provide products to all levels and categories. 

“Our product range is set up so we have an offering for everyone. Some customers may need to use a cheap silicone for formwork for instance, where they just need to fill a gap, pour some concrete then pull it out – you do not need something that will last 20 years so they may need a price point for this. We understand that there is no reason to spend $15 on a tube of silicone when a $6.50 product will fill a hole in a gutter that will be replaced in a year,” he said.

“However, if a customer is doing high-end glazing and waterproofing then they need something that is going to be extremely durable UV wise, has great adhesion and long-lasting guarantees. We compete on all levels with our range which is why we are making this substantial packaging change so we can show the difference in these ranges that fit the different markets that they are in,” Mr Dartnall said.

HBT launches new range to combat waning supply

HBT’s National Business Manager for Industrial, Kevin Marshall says HBT recently launched its exclusive ‘Made for Trade’ range, by HB Fuller.

The adhesives, sealants and fillers category is still volatile due to high pricing and low stock, however according to HBT’s National Business Manager for Industrial, Kevin Marshall the market is beginning to take a turn for the better as supply pressures begin ease. 

“While tumultuous supply issues are expected to smooth out in the second half of this year, I am not sure whether pricing will reduce at all. However, it will certainly not increase as quickly as it did last year. In some instances, pricing went up 45 per cent due to silicone shortages last year.”

“HBT is a very trade orientated group so when prices go up customers ask members why prices have risen so significantly. Throughout the price increases, members were worried that if they were forced to pass on the price rises their customers would question them, particularly when the rises were so substantial. Tradies would then look for any other options that were available and often shop elsewhere to see if the same product was sold at a lower price.”

“Price rises create uncertainty within the trade space because trades need to know they are purchasing products at a reasonable price especially when they purchase these products on a daily basis. Every tradie in Australia would have construction adhesives or gap filler or some sort of silicone which is why it is so difficult to pass on price increases,” Mr Marshall said.

The on-going price hikes now have retailers shopping around for cheaper products as well.

“Members need to maintain their supply and if they cannot do this with the suppliers they have always used, then they have to source the product elsewhere so they can maintain their inventory. While there is nothing wrong with doing this, we do tell members to try and remain loyal to their suppliers because when times get tough they are looked after. This has been proven time and time again in timber particularly.”

While members do suggest alternative products to customers, often trades prefer to use a trusted, branded product because they know well-known products will achieve a good result every time.

“Tradies want to stay loyal to the brands they have always used because they know they will get the results they need. For them to swap to an unknown product is a problem because they are not sure what the end result will be.”

While HBT continues to work hard to mitigate the squeeze on market supply and cost increases, there are still plenty of exciting new products coming to the market.

HB Fuller recently launched its new ‘Made for Trade’ range, exclusive to HBT, that includes four big selling products including a gap filler, construction adhesives and roof or plumbing silicone. The new range represents 80 per cent of the products that a tradie already has in his kit, Mr Marshall said.

Launched at HBT’s national conference in early May, the new range features HBT’s iconic black and yellow colours and is also branded under HB Fuller so customers instantly recognise the brand in-store.

“The range was designed so members can use the products as their opening price point and compete at an entry point level. Members can then also offer customers the branded products they have always used. It gives HBT a good selection in-store and will complement the offer members already have while also covering all price points which is so important in the current market.”

Macsim Fastening Systems also has a new range and while they are HBT’s preferred supplier in the fastening area, they are now investing a lot of money into the silicones and adhesives category which could see them become a serious player within this space, according to Mr Marshall.

“The new products are designed as a coloured option for silicones and adhesives so the colour lines up with the job at hand. I think the launch was hampered slightly due to market volatility but once this settles down Macsim will no doubt have a very strong offer,” Mr Marshall said.