Product performance crucial in adhesives business

Edited by the Engineeringtalk editorial team Nov 19, 2001

Research from Frost and Sullivan reveals that in the European furniture and woodworking adhesives business, customers place more emphasis on product performance and delivery than on price and support

Latest research from international market analysts Frost and Sullivan reveals that in the European furniture and woodworking adhesives business, customers place more emphasis on product performance and delivery than on price and technical support when choosing a supplier.

The study interviewed customers throughout the furniture industry and discovered their perception of suppliers and their purchasing needs.

It also asked customers to rate their suppliers in terms of customer satisfaction and to highlight areas of supplier strength and weakness.

Of the customers interviewed, product performance was cited as the most important of all purchasing criteria.

Product performance encompasses bond durability, coverage per litre or kilogram, ease of application, application time and resistance to heat, water and moisture.

Max Crosetti, Industry Analyst with Frost and Sullivan, explains: "Not all these factors were of equal importance to the end-users, bond durability is by far the most important factor, by definition, adhesives stick pieces together and furniture manufacturers expect this bond to last.

We found that the majority of customers remain satisfied with their current adhesive suppliers' products and service, but many expressed a desire for additional offerings, or improvements to existing offerings including environmentally friendly, fire proof, better weather resistant and more easily applicable products." This $423 million market represents 11 percent of the total Western European adhesive market.

However, it is less than 2 percent of the total costs for raw materials for the European furniture industry.

As a result, adhesive suppliers are faced with the dilemma that the furniture industry is an important segment for them, while adhesives are a relatively unimportant purchase for furniture manufacturers.

Not only that, but the report shows that furniture manufacturers are extremely loyal to their adhesive suppliers.

Changing supplier involves investment and effort to adjust current operations to the new products.

Moreover, risks exist that the new adhesive will fail to perform as expected over the years and end users are not prepare to take these risks for a raw material that is only a fraction of their total costs.

Consequently, furniture manufacturers are very reluctant to change their supplier of adhesives, once they have found a company that provide them with a good quality product and a reasonable service.

As a result, adhesive suppliers struggle to gain new customers from their competitors.

Therefore, the most viable way of increasing sales of woodworking adhesives is by growing existing business.

(Embedded image moved to file: pic01195.pcx) End users value technological innovation from their suppliers, as they see it as a means of improving their own products.

Increased resistance to weather factors, greater bond durability and more environmentally friendly products are some of the improvements that suppliers can introduce to their customers in order to grow sales.

However, much of the market's growth stems from the increased consumption of wood composites, particularly medium-density fiberboard (MDF) and oriented strand board (OSB), to reduce costs for housing and furniture.

Europe has several of the world's fastest growing wood composite markets.

In 1999, production of OSB went up 46 percent to nearly 1 million cubic meters, and production of MDF rose 10 percent to 7.3 million cubic meters, according to the annual forest products market review of the United Nations' Economic Commission for Europe (ECE).

The survey includes interviews with end-users in the furniture and woodworking industry.

The regional breakdown of interviews approximately represents the actual share of furniture production by region and targets some of the largest furniture manufacturers in Western Europe.

Adhesives manufacturers who buy the report will be able to see what their customers think about them and their competition and gain an understanding of the drivers, restraints and challenges in this highly competitive market.