Adhesives and Flexible Packaging
Bill Magee
Market Manager Packaging and Converting Adhesives and Sealants Rohm and Haas Company
CMM International Chicago 2003
Innovation
Agenda
Flexible Packaging Market Brief Overview Drivers in Flexible Packaging Packaging and Adhesive Innovation Adhesive and coating trends New technologies Adhesive and Sealant Council
Flexible Has Become a Leader in Packaging
Others 17% Glass 4% Plastic Bottles 6% Misc. Plastics 8% Metal Cans 12%
Corrugated 24% Paperboard 12%
Flexible 17%
Flexible Packaging - $70 Billion
Eastern Europe 3% Latin America 7% Asia-Pacific 14% Middle East/Other 5%
Western Europe 28%
Japan 16% North America 27%
Growth Versus Competitive Systems
Packaging Segment Growth - 1996-2001
5.00%
4.00%
CAGR - %/YR
3.00%
2.00%
1.00%
0.00%
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Pa pe rb oa r
or ru g
Fl e
et al
-1.00%
G la
Ca n
xib l
Drivers for Innovation in Packaging Material Remain Unchanged
Demographic change Advances in Material Science Economies of scale Industry Consolidation Geographic Expansion
Packaging Innovation Today
Two forces play key roles in determining packaging materials suppliers financial performancepressure from food producers to reduce the cost-in-use for packaging materialsFood producers desire to enhance their products consumer appeal through attractive packaging with better properties, increasing their demand for new materials sold at higher prices Improvements and innovationshave created opportunities for flexible packaging at the expense of rigid packaging. This development has been the most important factor driving growth and profitability in the industry. Robert N. Castellano Flexible Packaging: Innovation Continues to Drive Growth (1998)
Packaging Innovation Today
Efforts to develop new and improved packaging in the converted flexible packaging industry are ongoing, with much effort focusing on lowering production costs, down-gauging and light-weighting, improving strength and barrier properties, enhancing aesthetics, and improving packagings environmental profile The Freedonia Group Converted Flexible Packaging to 2005 (2001) I believe the stand-up pouch for beverages is the top flex-pack growth marketThe metal can is an outdated package for a beverage and will face increasing competitionless expensive retort stock and improved dispensing technology will penetrate traditional packaging . Stanley Sacharow, The Packaging Group
What is Required to Service Flexible Packaging Converters
Capability
Managing Customer Relationships / Service Brand and Commitment to Industry
Source: Rohm and Haas market study 2000
Technology Portfolio and Product Range
Application Development and Technical Support
Supply Chain Management E-business Capability Manufacturing Excellence
3 Importance
Sources: A.T. Kearney analysis
A Complete Product Range
Laminating Adhesives Extrudable Resins
Barrier Coatings
Heat Seals
Coatings
Cold Seals
Packaging and Adhesive Technology Change
140 120 100
Flexible Packaging Adhesives Flex Pack Market
Patents
80 60 40 20 0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000
Year
Who is driving Innovation in Packaging?
Flex Pack Patents by Assignee, 1990 to 2001
48%
Packagers Converters Suppliers Machinery
26%
14%
12%
Innovation is Increasing Throughout the Value Chain
20.00 Packagers 15.00 Suppliers Converters Machinery
Patents
10.00
5.00
0.00 90 91 92 93 94 95 96 97 98 99 '00 '01
Year
Key areas of Flexible Packaging Innovation
Packagers: Tamper evidence Resealability / reclosability Easy-open Peel / reseal Compartmented Packaging Vacuum packaging Oxygen Scavanging CAP / MAP Converters / Suppliers: Easy open packaging Resealable packaging Vacuum packaging Barrier packaging Retort Packaging Oxygen scavanging Stand up pouches Compartmentalized packaging
Technology Roadmap Adhesives
Value in Use High
Interactive Packaging Compartmentalized Packaging Metal Container Replacement Reduced Cost to Market Environmental /Regulatory
Modified Atmosphere Adhesives Intelligent Adhesives Engineered Adhesives
Value Enhancing Adhesives Barrier Laminating OX2 ELM
Low
Functional Adhesives
2001
2005
2010
Time
Where Are We Today?
Flexible Laminating Trends
Laminating/Coating Trends
Solvent-Free Growth
North American Growth Phase Beginning Low Capital Expenditure No Drying No VOC Issues Productivity Application Capability Grows Daily Fast Cure Technologies will Evolve.
Rad-Cure Alternate Technologies
Laminating/Coating Trends
Waterbased Developments
Transition from Solvent Based on Existing Equipment Cost Effective New Acrylic Chemistries Improved Performance Ready-to-use Products Slit in-line
Laminating/Coating Trends
Solvent Based Evolution
Urethane Technology Continues to Lead in Performance Broadened Performance
Coreactant Combinations Lower Migrating Chemistries
Reduced VOC concerns
High Running Solids Systems Friendlier Solvents
Laminating and Coating Trends
Radiation Cure An Evolving Technology
Adhesives
Work in Process Ship on Demand Evolving Technology
Topcoats
Elimination of Film Layer Work In Process Ship on Demand Proven on Cold Seal Confectionary Packaging
Cutting Edge Adhesive Developments
Low Monomer Solvent-Free (ELM) Economical Retort Technologies Non Isocynate Systems Break-Through Water-based Technology Novel Barrier Technologies Energy Cure and other Fast Cure Technologies
THE ADHESIVE AND SEALANT COUNCIL, INC Founded in 1958
An organization bound by the collective efforts of its members . . .
To improve the industry operating environment To strengthen member companies
THE ADHESIVE AND SEALANT COUNCIL, INC
Strategic Goals
Provide training, information, and interaction for members Offer educational programs that communicate the advantages of adhesives and sealants over other types of fasteners Represent the industry in regulatory and government affairs
Thank You
