The Australia adhesives market is experiencing robust growth, having reached a valuation of USD 653.2 million in 2022, and is projected to reach USD 1064.11 million by 2030, exhibiting a steady CAGR of 6.29% during the forecast period 2023 to 2030. The market is fuelled by a number of variables that support its expansion. Adhesives are in high demand due to urbanization's rapid growth and the expansion of industries like construction, automotive, packaging, and electronics. The introduction of novel adhesive formulations and bonding techniques is made possible by ongoing research and development, which plays a significant role in technological advancements.

As manufacturers and consumers look for environmentally friendly adhesive solutions, sustainability and environmental concerns are major motivators. Low-VOC or solvent-free adhesives are required in accordance with environmental laws and a broader push for sustainability.

The demand for adhesives is also heavily influenced by the packaging sector, particularly as e-commerce grows. Reliable adhesives are necessary for applications like carton sealing, labelling, and flexible packaging if secure and effective packaging solutions are to be achieved. The consumer goods industry and do-it-yourself projects both help the adhesives market expand. Adhesives used in bonding, repairing, and creative applications are in high demand due to the rise in DIY culture, hobbies, and home improvement projects.

Rising Infrastructure Projects 

The infrastructure and building industry in Australia have a considerable impact on the adhesives market. The demand for adhesives used in different applications, such as flooring, tiling, and sealing, is driven by rising government expenditures in infrastructure projects, commercial building, and residential constructions.

The federal budget for 2022–2023 dedicates AUD17.9 billion over ten years to major infrastructure projects, including billions for nationwide road and rail projects. The AUD16.8 billion WestConnex 33 km traffic motorway in NSW, scheduled for completion in 2023, and Sydney Metro, Australia's largest public transportation project and the country's first fully automated metro rail system, are among the country's largest infrastructure projects.

These huge Infrastructure development projects are most likely to drive up the demand for adhesives in Australia.

New regulatory schemes

The adhesive market is impacted by rising environmental awareness and the demand for sustainable practices. Regulations and guidelines have been put in place by the Australian government and business organizations with the goal of lowering adhesives' emissions of volatile organic compounds (VOCs), encouraging the use of eco-friendly adhesives, and assisting green building initiatives.

For instance, The Industrial Chemicals Act 2019 (IC Act 2019), which commenced in July 2020 had amendments that will lessen the regulatory burden on companies whenever they introduce certain lower-risk chemicals, like polymers of low concern. This reduced regulation will assist in manufacturers in expanding their production of low-environment impact adhesives like Water-based adhesives.

Strong Growth of Packaging Sector

The Packaging Sector in Australia is one of the most esteemed industries in the country. Adhesives play a crucial role in the packaging industry for carton sealing, labelling, and flexible packaging applications. The demand for adhesives in the packaging sector is driven by the growth in e-commerce, food and beverage packaging, and consumer goods packaging.

Australians purchase 118,000 tons of bottles annually on average, according to a study by Macquarie University. Many of the packaging manufacturers have increased their working capacity to meet the demands as a result of the unprecedently high increase in demand for plastic-related products.

The adhesive market is further impacted by the expanding trend toward flexible packaging, which is motivated by shifting consumer preferences and convenience. Flexible packaging requires adhesives that adhere strongly, resist heat, and have formulations that are safe for food.

DIY Culture's Ascent and Rising E-Commerce

The growth of e-commerce has increased the demand for packaging, which has boosted the demand for adhesive tapes, labels, and bonding solutions. The necessity of adhesives for secure packaging, tamper-evident seals, and brand recognition helps to explain the sector's explosive growth in e-commerce.

The DIY movement has increased the importance of usability, adaptability, and compatibility with different materials in the adhesives market. Bunnings, a leading hardware store in Australia has reported that their DIY online content has seen an average annual growth of 63%. This growing trend of DIY enthusiasm is fuelling manufacturers of adhesives to develop specialized products and packaging choices to satisfy the specific requirements of DIY enthusiasts.

Impact of COVID-19

Australia heavily relies on China for adhesives and upstream acrylic acid. One of the nations where Covid-19's effects were both prolonged and severe was China. Lockdown on the nation's major ports were in place to stop the spread of Covid-19. Several producers have reduced production or stopped altogether during the pandemic in China. The supply of adhesives in Australia was significantly impacted by these variables.

In terms of end-use sectors, the pandemic slowed down sales in the automotive and construction industries, which decreased Australia’s need for adhesives. However, the significant demand increases from demand for packaging brought about by an increase in e-commerce coupled the hike in DIY activities as several people stayed at their homes and the usage of adhesives in Personal protective equipment (PPE) offset the weak performance of other sectors up to an extent.

Impact of Russia-Ukraine War

The downstream industries in Australia, which are huge consumers of Adhesives were affected by the conflict between Russia and Ukraine. For example, the tightness in Microprocessors led to drop in car sales in Australia, which in turn lowered the demand for adhesives during May 2022.  However, when it comes to the manufacturing side and the supply scenario of adhesives, the war has a minimal impact since the country primarily depends on Asian countries for imports. Finally, the decisions regarding expansion or investments on adhesive as global economic instability and uncertainty can be brought on by geopolitical tensions and conflicts. Such unpredictability may influence investor confidence and consumer spending, causing changes in the demand for adhesive products across various industries.

Australia Adhesives Market Assessment, Opportunities and Forecast, 2016-2030F”, is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative & quantitative assessment of the current state of the Adhesives market in Australia, industry dynamics and challenges. The report includes market size, segmental shares, growth trends, COVID-19 and Russia-Ukraine war impact, opportunities and forecast between 2023 and 2030. Additionally, the report profiles the leading players in the industry mentioning their respective market share, business model, competitive intelligence, etc.

In this report, Australia Adhesives Market has been segmented into the following categories: 

1.       By Type

1.1.    Synthetic Adhesives

1.1.1.Acrylic

1.1.2.Polyvinyl Acetate (PVA)

1.1.3.Polyurethane (PU)

1.1.4.Ethylene-vinyl Acetate (EVA)

1.1.5.Epoxy

1.1.6.Silicone

1.1.7.Styrenic Block

1.1.8.Others

1.2.    Natural

1.2.1.Animal Glue

1.2.2.Casein Glue

1.2.3.Natural Gums

1.2.4.Starch & Dextrin

1.2.5.Others

2.       By Technology

2.1.    Water-Based

2.2.    Solvent-Based

2.3.    Hot melt

2.4.    Reactive

2.5.    Silicone

2.6.    UV-cured

2.7.    Others

3.       By Form

3.1.    Paste

3.2.    Liquid

3.3.    Film

3.4.    Others

4.       By Application

4.1.    Paper and Packaging

4.2.    Footwear and Leather

4.3.    Building and Construction

4.4.    Automotive and Transportation

4.5.    Woodworking and Joinery

4.6.    Electronics

4.7.    Healthcare

4.8.    Others

5.       By Region

5.1.    Western Australia

5.2.    Northern Territory 

5.3.    Queensland

5.4.    South Australia

5.5.    New South Wales

5.6.    Victoria

5.7.    Tasmania  

Key Players Landscape and Outlook

Market players operating in the Australian adhesive market are anticipated to expand steadily, propelled by improvements in manufacturing, construction, and infrastructure. Sustainability is receiving more attention, with a move toward low-VOC adhesives, bio-based substitutes, and recyclable or biodegradable goods. Hence, key Australian Adhesive industry players are investing and focused on sustainable solutions to lessen the regulatory burden under the new revised regulatory scheme. During September 2021 Henkel launched its newly developed adhesive, which is solvent free and has zero VOC and is used for rubber lining.

In August 2022, Henkel announced the production of PU adhesives in Australia to cater to the rising demand for engineered timber in the construction sector. 

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•    What is the current and future market size of the product/service in question globally or specific to different countries?
•    How are the markets divided into different product/service segments and the market size and growth of each segment? 
•    What is the market potential of different product segments and their investment case?
•    How are the markets predicted to develop in the future and what factors will drive or inhibit growth?
•    What is the business environment and regulatory landscape specific to the product/service?

Key Players Operating in the Australia Adhesives Market

·         3M Australia Pty.Ltd

·         Henkel Australia Pty Limited

·         Selleys

·         HB Fuller Co Australia Pty Limited

·         Bostik Australia Pty Ltd

·         Sika Australia Pty Limited

·         Siegel Pty Ltd

·         RLA Polymers Pty Ltd

·         Tac Adhesives Pty Ltd

·         ITW Australia Pty.Ltd

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