The perennial challenges of raw-material availability and price inflation remain the two most important market concerns facing the global release-liner converting and silicone-coating markets, according to AWA Alexander Watson Associates’ annual survey of industry professionals. Results were reported last Thursday at the “2019 AWA Global Release Liner Industry Conference & Exhibition (GRLICE)” in Charlotte, NC. The three-day program garnered a record audience of 220+ from around the world.
Photo above: Executive Leadership Panel members included (left to right) Simon Medley, CEO of Loparex, Paul Grzebielucha, division president of ICP Industrial, Cindy White, president/CEO of Channeled Resource Group, and Michel Merkx, corp. vp/gm of American Biltrite. AWA president/CEO Corey Reardon (far left) was moderator.
Some “Converting Curmudgeon” bullet points of interest:
- While 65% of all respondents consider their companies to be truly global, more than 80% believe that globalization is not the only way to achieve business growth. Only 11% say their business is only local.
- Almost half of respondents expect that product standards will become global before 2024.
Mergers & Acquisitions
- Sixty-eight percent of respondents believe M&A activity will affect their business in the next five years. This is down 7% from the 2018 survey.
- In 2024, 57% of respondents say M&A activity in the release-liner industry will have increased, while one-quarter think it will remain at the same level.
Costs & Profitability
- Nearly all respondents said they experienced cost increases in 2018 – from labor and energy to transportation and materials. Through 2020, about 75% of survey respondents foresee all these costs to rise again, but a much smaller share – only 5% -- foresee their materials, transportation and energy costs will fall.
- Among all respondents, 30% say their stocking levels in 2018 (for inventory management) were on par with 2017, and equal numbers – 23% -- say their stocking levels were either extremely high or extremely low.
- An average of 60% replied that their investment in new product development increased last year. Sixty percent boosted their R&D investment, and about 72% increased capital-equipment investment. By 2022, 80% anticipate greater investment in new products, and again equal numbers – 65% – foresee more investment in R&D and capital equipment.
- Evolutionary, not revolutionary, describes the technological advances of the global release-liner industry. When asked where expected innovations may occur, survey respondents listed (from the top down): coating or surface treatment of base materials, new end-use applications, liner release coating, biomaterials, raw materials, structures of release liner, nanotechnology, overall manufacturing processes, and current end-product systems.
Sustainability & Environment
- Sustainability is a given for businesses today, and the release-liner industry is seeking solutions. About 90% of respondents say sustainability/recyclability/eco initiatives are important to their companies today.
- Sixty percent say they’ve taken measurable efforts to address environmental issues; less than 10% think issues about recycling release-liner waste are affecting their business; and 45% say these issues will continue to have a major effect on business by 2024 – a jump from 33% in 2017.
- Twenty-eight percent of respondents say they are involved in a program to recycle/reuse spent release liner today (a bit more than in last year’s survey).
- North American and Asian release-liner industry members are the most optimistic about growth in their individual businesses for 2019, followed by more pessimistic Europeans.
- Among higher growth rates expected this year, 50% of Asian companies surveyed say business will be up anywhere from 6% to more than 9% compared to 2018; about the same number of North American converters see similar growth but with a full third forecasting >9% higher demand.