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The market for glues, sealants, fillers and tapes is generating a positive buzz. The last 12 months has seen many suppliers enjoying sustained growth as building consents continue to improve, with the odd caveat.
For example, many suppliers spoken to for this article say that although there has been growth, the slow burning nature of the work actually coming to fruition has meant that the Christchurch rebuild hasn’t quite skyrocketed as anticipated.
That being said, the positivity around the market cannot be avoided. Bostik’s Paul O’Reilly for one says that while things haven’t been moving at the rapid pace that was expected, there has still been uplift in business.
“We haven’t seen any uplift in Christchurch in what you would call the commercial business, your big buildings being rebuilt, because obviously they are still demolishing buildings. But moving forward that commercial part of the market will definitely move ahead but at this point in time we’re not seeing a lot of movement in those areas.”
Gauging opinion from around the market as to where the work is concentrated gives a mixed impression but the fact remains that this category is still being driven by the big two markets: Auckland and Christchurch.
In spite of this, Sika’s Tony Smith has seen quite strong growth over the last 12 months, saying that the company has even been gaining a bit of market share in some places.
“Members of our technical team that regularly deal with architects and engineers are hearing about a lot of things that are going on, particularly in Auckland and Christchurch, which is good. It’s been a good last six months, we’ve got some nice early runs on the board!”
Callum Fraser at Henkel is another that has seen steady growth in the market over the last year. Fraser points to the re-merchandising and rebranding the company has been doing as a key factor behind this.
“We’ve just finished a complete overhaul and repositioning of our adhesive and sealant lines to make those categories less confusing and to allow us to spend more time talking to the end consumer of the products so we’re happy with the direction of the market at the moment,” he says.
WHO WILL FREE US FROM SOLVENTS?
In last year’s look at this category, one big takeaway was that solvent-based products would continue to dominate the market. Water-based products, while available around the market, were somewhat dismissed by end users that are perhaps too “stuck in their ways” (pun intended).
So has the attitude towards low VOC products changed in the last 12 months? Holdfast’s Chris Whibley says the company has certainly seen growth in solvent-free adhesives and expects that growth to continue going forward.
While there is a growing interest in low VOC, solvent-free technologies, Sika’s Tony Smith still sees solvent-based products dominating the market: “You can talk to some people until you’re blue in the face saying that it does everything you need – and that’s basically our campaign – and will do everything your old product will do and it’s good for the environment and you’re not inhaling any toxins but they’ll still say ‘I’ve been using this product for 30 years and I’ll keep using it’.”
Echoing these sentiments is Bostik’s Paul O’Reilly. While he has noticed rising interest in low VOC products, O’Reilly doesn’t envisage it being at the expense of other, more established products on the market.
“I would say it’s not as prominent here as in other markets. Most of the companies, our competitors, in the market do have low VOC options in various categories so it’s something you definitely have to have and it’s something we have done for a number of years but I haven’t seen a real significant change in the last few years.”
What would it take for the reluctance to move away from solvent-based product to be overcome? Tony Smith feels it would require something on a grand scale to change the market dynamics – i.e. a legislative change. This is the case in some EU countries, in Hong Kong and in some areas across the US.
While there may not be the same level of clamour for low VOC products here compared to other countries, there has been some movement towards lower VOC-based products. Henkel’s Callum Fraser is one that sees this trend emerging, but tempers that solvent-based products will continue to be the dominant product category.
“I made the comment in the past that solvent-based products aren’t going anywhere fast. I stand by that, but the slow creep away from that outdated technology continues towards newer, more effective technology.”
When asked about the growth of low VOC products, Fraser says the company has noticed a pick-up in demand for those products. He feels that this interest in different products may be a result of resource-poor users looking for greater efficiencies in their quest to try and cope with increasing work across the country.
“I think that there are more consents being granted than people have the capacity to build and I think that is putting pressure on them to look for alternatives and better ways to do things and I feel that people are becoming more open to newer technologies and ways of doing things. While there is still a resistance, I feel that has softened.”
LOOKING ONLINE FOR EDUCATION
As you can tell from much of the above, there has been a lot of effort put into explaining the changing technologies around this category – even if the response to change has been less than overwhelming.
The proliferation of companies going online has been very relevant in the last number of years. Many of the players in the market have a strong online presence, not just focusing on a website, with YouTube accounts – downloadable specs; embedded videos; apps for mobile devices; QR codes; and a social media presence are all evident in some way, shape or form.
Paul O’Reilly at Bostik says that being online is becoming imperative for businesses in the glues and sealants sector as more DIY users (and to a lesser extent professional users) are consulting the web for product information.
With Bostik being a predominantly trade-focused brand, O’Reilly says that having safety data sheets as well as spec sheets has been beneficial for tradespeople looking for quick information regarding products.
Where to next for the company’s online presence? Paul O’Reilly explains: “We are moving towards QR codes. Some of our products have them now but moving forward I think that we will have them on everything. It’s definitely something that we are looking at because it’s instant and gives people the chance to get information very quickly.”
On the topic of QR codes, over at Sika Tony Smith says the company is using these interactive barcodes more frequently on new products. Last year’s feature looked at the dedicated YouTube channel that the company has with many “how to” videos uploaded.
But these days there is a “how to” video for everything and anything and Smith warns that researching into what is already available online is paramount if you are not to waste time and effort duplicating what’s already there..
“It’s been interesting doing the process because we have been selling silicon for bathrooms for years and years. One of the first things we were going to do was show how to seal around your bath. When we looked on YouTube there are thousands of videos on that topic so we felt that it would just be lost. We feel with the videos you need to be quite specific in the message that you’re trying to give off.”
Henkel is another company that has looked to improve its online output and make it easier for retailers and end users alike to get information on its products.
“The world is constantly becoming a more tech savvy place. In the last 12 months we’ve sharpened our website to dramatically cut down the amount of time wasted looking for things and gone a step further by introducing QR codes on all our new adhesives and sealants packaging. We are seeing the statistics to support this. They have been received particularly well and it is useful to have the data sheets readily available, we do of course supply a hard copy too,” says Callum Fraser.
STILL A TALE OF TWO CITIES?
Whilst it is unavoidable that Auckland and Christchurch are mentioned as key areas that are performing well when it comes to construction, some suppliers spoken to for this feature point to other regions that are holding their own at the very least across the country.
Henkel’s Callum Fraser is one that has seen work come from areas across the country. He also says, however, there are some areas that are flat.
“There’s still considerable renovation work being carried out but an increasing amount of commercial work going well. Waikato and Tauranga after Auckland and Christchurch are probably the two largest centres in terms of work. There are a few areas that are having a little bit of a hard time, around the West Coast due to people moving away from that area.”
Edwin Zijderveld at Winstone Wallboards is another that feels there is growth throughout the country, with things not solely focused on the “big two” areas.
“I haven’t been able to break it down region by region per se but it’s certainly a nationwide phenomenon where we are seeing growth happening in the building activity across the country so it’s nationwide.”
This, of course, is in contrast to the opinions shared at the beginning of this piece so it would certainly seem that depending on who you speak to, the geographical distribution of work is cloudy at best.
With so much information available to end users, be they DIYers or professionals, the working relationship between suppliers and retailers is also evolving at a faster rate than ever.
Sika’s Tony Smith says that today’s onus on online research has put added pressure on retailers to ensure that staff members are well-trained and knowledgeable. This is due to the fact that with the proliferation of smart devices, and Wi-Fi available in some stores, consumers are entering into retail outlets better equipped with knowledge than ever before.
“Anything that we do that helps a consumer go into a store and makes the choice a lot easier is going to be obviously good for the merchants so the end result is that it’s good for the relationship. When you’re dealing with a product category where you’ve got hundreds of products, it’s very hard to standardise it because there is a stack of information.”
The consumer’s use of smart devices in retail stores and merchants is something that Winstone Wallboards’ Edwin Zijderveld has noticed picking up in recent months. He explains that more often than not, helping the retail partners can come down to simply reminding the retailers what products are out there and relevant.
“We spend a lot of time training store staff and working with them closely to ensure that they have the information to give them the latest and greatest. It’s hopefully a win-win all around. The consumer gets a better solution, the retailer gets the sale.”
Over at Henkel, Callum Fraser is another that stresses the importance of the supplier-retailer relationship: “It’s more important than ever. Customers demand higher quality from retailers than they did 10 years ago because legal requirements and timeframes have tightened.”
Fraser says that as a supplier, there is an emphasis placed on making things easier across the board. The easier the technical products are for consumers to understand, the greater the chance of generating sales for retail partners.
“The relationship is really important in that regard in that we’re giving the retailer things that are ready and easy to use so that everything is as easy as possible because information is much easier to get now but even if you can find your way to it, if you can’t understand it, it doesn’t hold as much value.”
Echoing this sentiment is Chris Whibley over at Holdfast. Whibley feels that the supplier-retailer/merchant relationship is a give and take one, relying on both parties working together to ensure consumers receive good service and avoid any delays and downtime. He adds that suppliers need to continue to focus on being a provider of solutions for merchants.
“Both parties need to work closely to provide a service that is reliable in supply. Communication between all parties is paramount so that any changes to the building code or market conditions/requirements can be fluid and on the front foot rather than reactionary.”
A SERIOUS SKILLS SHORTAGE?
Of course, it is not all rosy in the sector – sadly it rarely is. From speaking to people in the know around the industry there is creeping concern entering the glues & sealants category about a shortage of skilled workers. This is of particular concern with signs that the Christchurch rebuild will soon be breaking ground.
The shortage of tradespeople is something that Henkel’s Callum Fraser has noticed. Speaking before the results of the election, Fraser said: “The prospective Governments are talking about funding to the trade end of things to get more apprentices on site and I think the reason for that is to be able to drive New Zealand’s building capacity because they are limited by the number of people in the profession at the moment.
“Everyone knows we’re a little short on builders in Christchurch and I think that the consent are starting to flow ahead of what people are capable of building and they are backed up.”
Sika’s Tony Smith says that although he has heard rumblings of a shortage of skilled tradespeople, he feels that as a supplier the company is a little removed to speak first hand on it.
Smith does, however, stress that obtaining workers in any field in the hardware industry is proving tougher than in previous years. Speaking about two new hires Sika has made recently, Smith says that it was certainly not as easy as in previous years.
Recruitment, he feels, is very difficult at this point in time: “We’ve just been through a period with the election of hearing about all these people out of work, one party would be saying they’ve created jobs and the other claims there are fewer jobs.
“I can tell you personally when we have recruited recently in the industry and it has been very difficult. Not from a contractor/builder point of view but even just trying to find staff members that have the qualifications or knowledge to work in the industry, we’ve found it very hard to employ.”
What impact is this shortage having or going to have in the glues & sealants category? Education and product knowledge is what!
Having foreseen a shortage of workers in the industry and having started to react to this is Winstone Wallboards. Edwin Zijderveld says the company is playing an active part in training new people to come into the industry as this will become a larger issue when large-scale work begins.
“We are heavily involved in training new people in the industry because there will be a shortage of skilled workers going forward in the industry as building demand grows and building consents increase. It’s something that has been verbalised by many in the industry and I think it’s a concern for many.”
With the election coming to a close at the time of writing this piece, there has been much talk in the run-up to voting about new developments across the country. But many of the industry people consulted for this piece are hesitant about whether there are enough skilled workers out there to meet the demand.
Referring back to some of the insights and inputs above, a raft of new builders and construction workers, as well as those unused to local market conditions, will only put more emphasis on suppliers, retailers and merchants to ensure their information is absolutely available and absolutely rock solid.
What is also intriguing is the selection of product these potential new tradespeople will look to utilise? Could some new blood in the industry mark the end of solvent-based products? Or will they continue to stubbornly stick around?