Epoxy resins are highly versatile natural compounds that are found in nature. These are two different compounds that have similar chemical properties and therefore, exchanged as one another. Epoxy resins are known for their excellent chemical properties such as good electrical conduction, strong bond forming ability, and extremely low moisture absorption. Epoxy resins also offer extreme corrosion protection against weather and artificial substances such as solvents, alkalis, and acids. These are widely used for both household and industrial purposes due to their high strength to weight ratio adhesive properties, and dimensional stability. Resins are highly viscous in nature and therefore, these are needed to be combined with additives for being used. Talking about the use of epoxy resins, these can tolerate extreme temperature and pressure and therefore, are ideal for being used as adhesives. These are durable products that can be used with a variety of materials such as wood, china, glass, metals, etc.
Due to being used in a wide variety of industries, epoxy resin market is huge and it will witness high demand at least till 2022. The demand is majorly driven by industries such as automobile, construction, and automobile. The global demand for epoxy resin is expected to grow at a Compound Annual Growth Rate (CAGR) of 5 percent until 2021. Similarly, the capacity demand is expected to reach 3.45 MMT by 2021 as well. The demand for epoxy resin is directly proportional to the growth in end-use industries. The demand in the electronics segment is also going to increase as the segment itself is growing with a CAGR of 5 percent. In the regions such as North America and Europe, the demand is expected to be driven by windmill installations. Considering the regional market outlook, APAC, Europe, and North America are self-sufficient manufacturers. On the other hand, the U.S. has reduced its imports while APAC is focusing on catering to local demand, therefore, restricting its exports.
How Epoxy Resin has Helped Entrepreneurs in Various Businesses?
Being an integral component in multiple production processes from different industries, many entrepreneurs prefer epoxy resin as an adhesive and even more. The global epoxy market is going through a surplus phase where more than 75 percent of the total capacity is held by the APAC. In terms of market share, APAC holds the maximum market share of 77.3 percent whereas the European Union and North America follow with 11.6 percent and 9.3 percent respectively. However, APAC holds relatively lower supplier power than North America and the European Union whereas these 3 regions hold medium level supplier power. The list of top global suppliers includes Kukdo, Nan Ya, Sammu Group, Chang Chun, and Hexion.
Developing regions such as India, China, and LATAM are witnessing increased demand for paints, coatings, and adhesives and therefore, the demand for epoxy resin is going to increase. The same is the case with the U.S. and Europe as the demand for epoxy resin in waterborne composite applications in aerospace, windmills, and marine coatings will increase in the next 2-5 years. Some of the industry best practices include contract buying and spot contracts. Large-volume buyers in the regions such as North America and Europe prefer contract buying whereas buyers from APAC prefer spot buying. In addition, operating charges are also expected to rise due to low or no capacity additions. Such a situation will also shift the negotiation power.
On the other hand, entrepreneurs can target different domains in the epoxy resin market and choose to start a business. However, they need to keep certain factors in mind before starting a business in such a niche market.
The most important factor is market research and analysis. Entrepreneurs have to be mindful of a number of market variables before starting a business. Factors such as the size of the market, global industry leaders, regional players and local players should not be ignored. Similarly, factors that possess secondary importance such as supply and demand scenario, buyer and supplier power analysis, price analysis, industry best practices, capacity analysis, engagement outlook, and challenges should not be ignored as well. The entrepreneurs also have to understand that being a versatile product, epoxy resin caters to numerous end-use industries and they try and tap any untapped markets in the local or regional scenario.
Epoxy resins are versatile products that can be used with a wide variety of metals. This makes it a high-demand product from a variety of industries. Such a high demand across the globe also clears the path for capacity additions. Although the industry is growing at a steady pace, not adding capacities in the future may hinder the growth. Talking about the capacity and demand scenario, regions such as APAC hold the majority of demand and capacity numbers which also make it a potential future market for bussing entrepreneurs and even existing players that wish to expand their business.