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Looking at the whole country, Bostik’s Paul O’Reilly paints a picture of a category where the balance of demand has shifted but remained very buoyant.
“The market has been good for us and I would say for our competitors as well,” O’Reilly says.
“Obviously, Christchurch is still pretty flat with a huge drop off in residential there but that’s been tempered by uplifts in the Waikato, Auckland doing its thing and Wellington and the Hawkes Bay tracking along well.”
O’Reilly is not wrong in assuming his competitors are also faring well in the current climate. However, as Loctite distributor Acme Supplies’ Jonathan Skelton points out, the DIY market isn’t quite as reliable as the trade side of things these days.
“For our hardware side of this category it’s double digit growth, but, stationery, which is our other big glue and tapes category, has flat-lined. It’s affecting everybody in that market and I don’t see much improvement in the near future,” he says.
Skelton goes on to explain that an overflow of product coming in from Australia as a direct result of the Masters Home Improvement failure has created something of a glut of adhesives and sealants in an already crowded market – but this isn’t getting him down.
“We just have to work harder really and the buoyancy and confidence is all in hardware so we’re making sure all those channels are in good shape for the future,” Skelton says.
NEW TECH OR SAME-OLD?
Within this category a sure fire way of keeping your channels in good shape is to invest in new products and new technology, a method that Neil Watkins at Selleys admits is a huge driver of his business.
He tells us: “We’re still developing our new Sil-X technology. They’re new polymers we’ve been working on over the last 12 months that are proving to be popular with both trade and the DIY consumer alike.”
Sil-X Storm sales in particular have done well thanks to technology that allows users to seal leaks on any surface in the rain or wet. So the recent run of adverse weather has been good for business in this respect?
“As much as I’d like to see some more sun, the wet weather this winter has certainly helped us. When we see a real weather bomb hit, those sales go through the roof,” Watkins says.
Another player with “a strong pipeline of new products coming to the market” is Holdfast.
New COO, Melanie Reid, explains: “You have to innovate in such a competitive space. It’s all a bit too soon for your October issue, but what I can tell you is that you can expect some of that new product by Christmas. We like the surprise factor!”
Sika’s Tony Smith has a different take on “new” technology. “In our space you see a lot of allegedly new products that are really the same old stuff in a different bucket but, from where I sit, there’s not a lot of new tech improvements in construction.
“In automotive, it’s a different story with new technology that literally bonds cars together. So for us it’s all about having a good offer on the shelf.”
Unfortunately for Tony Smith, one of Sika’s biggest offerings, its expanding foam range, has experienced some supply issues due to a global MDI polymer shortage.
“That polymer, which is shipped from Europe, is needed for foams and insulation materials so we’ve had to manage a lot of supply issues. Normally we’d try and keep five months of supply in our supply chain and our forward orders got put out further and further.
“We shouldn’t run out, but we can’t magically make it appear either,” he explains candidly.
SALES THROUGH THE ROOF
Despite this issue, Tony Smith reveals that Sika has had very strong growth in the past year, so much so that getting products out the door in time to meet the extra volume has been a bit of a challenge.
“What we’re doing now in daily sales, six years ago would have been a week’s sales,” he says, adding “It’s been pretty tough on everyone and we’re even reaching the point where we are outgrowing the site.”
Luckily Smith’s team has received approval to put on eight more staff who will go into manufacturing and operational roles.
“All in all it’s a good problem to have,” he says.
Speaking to Holdfast’s Melanie Reid about warehousing and manpower constraining sales volumes, she agrees: “We have a similar challenge. We’re currently re-racking our warehouse to increase our capacity. We’re just trying to keep up with the growth.”
“We all know there’s plenty going on in construction. It’s across all markets in different areas whether we have maturity of markets or not. We have products for consumer, trade and commercial, yes absolutely, and they’re all enjoying growth.
I ask Reid where this volume is coming from. “The big boxes are a key focus, we are always looking to drive our customers back to them. There is no issue with creating that demand from across all parts of the market, that’s for sure.”
Laughing, Melanie Reid continues: “I’m not going to expand on that. And that’s what you get in such a competitive space.”
TECHNICAL SUPPORT BUILDS LOYALTY
Over at Ardex NZ, Steven Irvine is another that’s also happy to confess to record sales for the category and attributes this to Ardex’s combination of service, innovation and technical support.
“Our sales reps are our technicians and they’re very knowledgeable. They’re our trainers too. They go on-site and they oversee installs to make sure our warranties are covered and as there is such a huge technical aspect to many of our products our support does lend itself to conversations with the tradies as to who to talk to,” Irvine says.
“The tradies, the big boxes, commercial work, architecture – to all of them it’s customer service that builds the loyalty and creates the demand. From our standpoint we put a lot of effort into supporting our customers so they know they can give us a call for just about any concern.”
The need for technical support is clearly as important as ever. As Melanie Reid puts it: “Over the last couple of years we’ve developed a training platform using our internal team as guinea pigs to roll that out and make sure it’s flowing in a very robust way. As technology changes we make sure our internal team are up to pace and we are using that with our merchant partners as well.
“That’s common practice in our industry. It’s becoming more and more a technical field. People need to rely on and trust the product they’re using.
“Brands like Holdfast need to let the market know they can be assured that they’re using a quality product that’s been tested and not a product that’s come into the market without that long term status.”
COWBOYS & PIRATES?
Manpower issues apart, a positive effect of this rigorous demand for technical info is that trusted quality products are pushing cheaper products out of the market almost completely.
Six months ago many of the established players in this category were complaining that “pirates” were bringing in containers of adhesives from China, and selling them direct to “cowboy builders” or to smaller retailers for “$3 retail without any comeback”.
The tradies, the big boxes, commercial work, architecture – to all of them it’s customer service that builds the loyalty and creates the demand
Those reports were coming in mostly from the Greater Auckland residential area.
But now we’re hearing that the market has moved on, partly because of the plethora of proven, quality products and partly due to a probably weather-related residential slow-down in Auckland.
This means, we’re hearing, that formerly more-than-busy Council inspectors have now had some time to focus on anomalies such as using cheap bulk adhesives hidden and mixed in with a few approved products.
“That’s always going to happen to an extent,” Selleys’ Neil Watkins confesses, “but it’s less likely to happen with sealants because there are building standards that as an LBP builder you have to meet.
“So if [a builder] wants to get sign off or if a Building Inspector comes around and finds products that don’t meet the standard then they won’t get a sign-off. Those Inspectors are more vigilant than before.”
MORE TRADIES SHIFTING TO THE BIG BOXES
Moving on to not what is being bought but where, we’ve been detecting some shifting of demand.
Not that long ago, if you walked into a PlaceMakers, a Carters or an ITM and you weren’t wearing steel capped work boots, you couldn’t help feeling distinctly out of place. These big boxes were all about the trade.
But the landscape has changed. For some time now, Mitre 10 and Bunnings have been working hard at courting the trade as well as the serious DIYers.
From our discussions around this category and others, we’re hearing that tradies have also been visiting the “retail” big boxes for their needs.
In this category many products are sold into trade-based paint stores and tiling shops, but that same product can now be found on shelves at the big boxes.
“We do sell a lot of Ardex tile adhesives to the tiling shops and specialty shops,” says Ardex NZ’s Steven Irvine.
“But we have noticed a real shift in where our professional tilers get their product from. And the big boxes are all focusing on the trade side now, especially for the tiler, and we’re seeing that move away from those specialist stores because of the ability to put it on account.
“It’s that one stop shop that also appeals. You can have it delivered on site as well so there is choice out there and it’s not a price war – it’s more about customer service.”
GOOD NEWS FOR SOLVENT-FREE
Carrying forward his personal advocacy for solvent-free product, Sika’s Tony Smith is very pleased to tell us that there’s been a shift, for the better.
“Yes, we have noticed a positive move toward solvent-free products. It was the old 80:20 rule. In the last 12 months that’s changed to 75:25.
“We went through a period where the councils were
talking green initiatives and low VOCs or no VOCs and Green Star homes – but it hit a point where people just didn’t bother or care. It’s going to take a long time before we get to solvent-free. “
Adopting the “what’s in it for me” stance I ask what the benefit is for the end-user. “Simply better value,” he explains.
“Water-based products are generally a little more expensive to make, but if you look at on a per ml basis then water-based is much better value for money. Up to 60% of those solvents will just evaporate into the air.
“If you take a 375ml cartridge, 187.5 mls of that could be just solvent. It evaporates into the air and the adhesives just reduce down to a solid.
“A water-based product would be less than 10% water that evaporates, so you’re talking around 90% solids. It’s about usable adhesive out of a cartridge and we’re busy pushing that all the time.”
GROWTH TO REMAIN BUOYANT?
Yes the market is crowded with more product than ever but, as Tony Smith puts it, it’s more a return to the norm.
“It’s a really cluttered category no doubt. Over the last six years a lot of suppliers have regrouped and rationalised. We’re in a situation now where the market is so good that we’re back to the point where the market has become cluttered again.
“But there is space for everybody. At the end of the day the distributor decides what they have on the shelves. It’s a lot of choice.”
Despite, or because of the choice, every major supplier is experiencing, “buoyant growth” with meeting the demand being the biggest challenge. Growth is being predicted by most for several years ahead.
Neil Watkins from Selley’s sums things up thus: “Things are going well. We’re predicting growth for the foreseeable future across all our markets. I hope so, or,” laughing heartily he adds, “You’ll be having this conversation with somebody else.”
You make me wanna grout
Recently released, Dunlop Easy Clean Epoxy Grout offers durability, superior stain resistance and is able to resist most household chemicals. It is easy also to use and clean during application and simple to maintain. Contains Grout Shield, a powerful mould inhibitor that resists the growth of mould and bacteria to keep surfaces looking better for longer. Suitable for ceramic, porcelain, non-moisture sensitive natural stone, vitrified, and mosaics both indoors and out and is available in four colours.
Also new is Dunlop Construction Grout, a high strength construction level grout that can be mixed to a paste-like or flowable mix, for a wide range of projects indoors and out. Formulated with an extended working time which allows more time for positioning, this multipurpose non-shrink grout achieves approximately 45MPa in 7 days and 65MPa in 28 days. Comes with a 10-year guarantee.
Dunlop also has some Ardit MS and PU Timber Adhesives coming in October and we’ll keep you posted on these new products.
Bostik gets new website
Bostik NZ has recently announced the launch of six new websites for New Zealand, Australia, Canada, Ireland, Philippines and the United Kingdom. Launched with customer feedback in mind, the new sites improve ease of navigation, offer a full suite of content including market pages, videos and downloads, easy access to corporate and product information and detailed descriptions of Bostik’s solutions for industrial manufacturing, construction, commercial & consumer markets.
Sika digs deep again
Sika is proud of its involvement in the recently completed Waterview tunnel connection and is happy to announce that its expertise and products, including sheet membrane waterproofing system SikaProof A, are being called on for another major Auckland infrastructure project.
The City Rail Link is a 3.5 km long double-track rail tunnel currently under construction underneath Auckland’s city centre, between Britomart Transport Centre and Mount Eden Railway Station. The City Rail Link is planned to be opened by 2021.
Loctite updates offering
Acme Supplies has some new Loctite products. Loctite
Re-new is a sealant that can be placed directly onto existing old joints without having to remove them, for a clean white joint in one easy step. A new applicator makes the job very easy and a mould sealant formula repells stops and prevents mould long term while also providing perfect adhesion to the existing silicone joint.
Loctite has also refreshed its range of super glues which includes Super Glue Liquid, Power Flex, Power Easy, Glass, All Plastics and Glue remover.