Rush to lightweight cars boosts adhesive makers

Wed Jun 5, 2013 7:36am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By Andreas Cremer and Victoria Bryan

BERLIN/FRANKFURT (Reuters) - From Pritt stick in school bags to Audi sports cars, adhesives have come a long way since natural gums and resins, and new high-tech variations are currently top of the list for carmakers as they seek ways to make cars lighter and tougher.

For auto suppliers like Henkel (HNKG_p.DE: Quote) and PPG (PPG.N: Quote) providing tailor-made adhesives that can absorb the shock of a crash and reduce rattles allows them to push for higher prices - and make more profits.

Stricter emissions rules in major markets mean cars have to become more fuel-efficient and less polluting, which in most cases means they will have to be lighter than last year's average weight of 1,400 kg.

Companies like VW (VOWG_p.DE: Quote), Daimler (DAIGn.DE: Quote), and PSA Peugeot Citroen (PEUP.PA: Quote) are therefore using more aluminum and exotic composites, which cannot be welded together but have to be glued with adhesives that will not lose their strength and can hold together parts even at top speeds and high pressure.

That puts industrial adhesives - made up of chemicals like the polyolefins that are used in Croc shoes and tennis racket strings - at the top of carmakers' shopping lists.

"Those who can demonstrate that their glue has something different to offer, and that it can be easily integrated into production processes, will achieve good margins," said Fabrice Roghe, a partner specializing in industrial goods at Boston Consulting Group in Dusseldorf.

Henkel, the world's largest maker of adhesives, is selling off divisions that deal with simpler industrial glues to focus on more complex and specialist products used on cars, airplanes or mobile phones.

The margin for its adhesive technologies division stood at 16.5 percent in the first quarter, outperforming the group as a whole, which had a margin of 14.9 percent.   Continued...

Black glue is applied on a Audi A3 car door at the production line of the German car manufacturer's plant in the Bavarian city of Ingolstadt April 11, 2013. REUTERS/Michaela Rehle