2021-2022 Adhesive Industry Review

Adhesives & Bonding Magazine: Industry Professionals Assess the Adhesives Sector

BETA Kimya General Manager Cihat Sayacı

We have closed a year that was extremely difficult from the perspective of the global economy and international trade. We had to contend simultaneously with high inflation, major increases in commodity prices, supply difficulties for raw materials, container shortage issues in logistics, and of course steadily rising production costs and capital requirements. Of course, the most difficult test we face is against the ongoing COVID-19 pandemic. However, as BETA Kimya A.Ş., we have always seen the glass as half full. Without slowing production, we continued our investments and made significant progress in both the domestic market and exports. Just as we grew in 2020 despite the pandemic, we also achieved considerable growth in 2021 in both revenue and unit sales. Over the past 10 years, we have ranked among the top five companies generating the highest exports in Turkey's adhesives category. Our products in the adhesives category have played a crucial role in our export success. We currently export to 80 countries across five continents. We are steadily increasing our market presence in foreign markets, particularly with our generic brand Mitreapel in the export sector. Mitreapel was registered as a "Renowned Brand" by the Turkish Patent and Trademark Office, making it the first domestic and national brand to receive this designation in the adhesives category. This has provided us with additional impetus for exports. We have closely monitored recent consumer trends. In this direction, without remaining indifferent to change and transformation, we introduced nearly 40 new practical packaged products for end users in building supply stores and e-commerce sites. We created a broad product range from non-slip tape to joint fillers, from liquid gaskets to door and window weatherstripping. In this scope, we entered the tape category for the first time in the adhesives field. With our 10 new tape products offering sealing, non-slip, and multiple other functions, we received perfect marks from consumers. Our B2C products under the Apel and Mitreapel brands currently account for approximately 10 percent of our revenue. We greatly value this growth achieved in a relatively short period. Additionally, alongside building supply stores, many of our products are now reaching consumers through world-leading e-commerce channels, including internationally. In 2022, we will carry out numerous new product launches combining multifunctionality with the highest-quality formulations. We will continue growth with products that will be manufactured locally for the first time in Turkey, serving both manufacturers and end users. In 2022, when we celebrate BETA Kimya A.Ş.'s 35th anniversary, we will also inaugurate a massive investment project. BETA Kimya GEBKIM Campus is a visionary project that will push our company forward in every respect. With our new integrated production facility, we will acquire the title of Eastern and Central Europe's largest adhesives and bonding agents plant. We are preparing to develop high value-added adhesives in our new factory, which will be one of the leading production bases for digital transformation in industry. In our new factory, we will enter five additional new sectors, and adhesives and bonding agents will maintain a significant share in our product range. This is because Turkey has major initiatives in the automotive, defense, aerospace and space industries. Therefore, adhesive products must serve these strategic sectors with the most comprehensive capabilities. We are conducting R&D and innovation work in this direction and investing in next-generation adhesives manufactured with high technology. For example, we are preparing to showcase our new polyurethane-based next-generation adhesives, which we have begun pilot production on for the first time domestically and nationally in Turkey. Additionally, with single-component next-generation MS-based and hybrid bonding agents, we are taking rapid steps to elevate our production experience, quality, and reach in this field to the next level in global commerce. As BETA Kimya A.Ş., our goals for 2022 are ambitious. In exports, we currently serve our products to the industry professionals in over 80 countries. We aim to expand our sales reach in the markets where we operate. Domestically, as always, we are focused on maintaining our position and increasing our product sales through new distribution channels. We expect the new year to be one in which the chemical industry, particularly in the adhesives sector, will set new export records. As the BETA Kimya family, we will continue to grow with our 200-plus products across 10 categories and carry Turkish quality to the world.

Sika Paints and Coatings General Manager Turgay Özkun

Sika closed 2021 globally with 17.3 percent growth, achieving sales revenue of CHF 9.24 billion. Pre-tax profit is expected to close with EBIT exceeding 15 percent, representing a record numerical increase. In addition, Sika acquired a total of 7 companies globally during 2021. With the signing of the MBCC Group acquisition agreement, planned to close in the second half of the year and one of the sector's largest transactions, Sika has taken a historic step and left its mark on the year. These two organizations, which will continue as separate companies and competitors until official closure, will bring major innovations to the sector. When evaluating the sector specifically for Turkey from the perspective of paints and coatings, the major challenges were high price increases in raw materials and supply difficulties, along with disruptions in the global supply chain. When local currency fluctuations and high inflation are added to these, the sector experienced significant challenges in balancing costs, supply, and prices. Regarding the current situation, no improvement is yet visible for 2022. Nevertheless, without significant volumetric differences, the paints and coatings sector closed the year with revenue growth. Sika will continue to implement its sustainable and profitable growth strategy both locally and globally. To this end, as it has done until now, it will focus on organic growth by increasing market share and on inorganic growth through company acquisitions. Sika Turkey, one of the group's leading companies, will continue providing successful support as a regional R&D center to the Middle East region and to headquarters on a project basis. Technical infrastructure and skilled human resources will be its greatest guarantees for all of this. Again, expecting 2022 to be a challenging year economically, politically, and sectorally, Sika Turkey has set its targets realistically, sustainably, and ambitiously.

Bestek Endüstri Kimya General Manager Özgür Ertekin

2021 was a good year for our company despite difficult conditions including pandemic effects, currency increases, and financial fluctuations. Upon closing 2021, we increased our revenue and gained new customers with 40 percent growth on a currency basis, solidifying our presence in the sectors in which we operate. We believe that Bestek's broad product portfolio, allowing us to operate in many different markets and sectors, brought about this success. Through new business partnerships signed in 2021, we began working with Lohmann, Fischer, and Enimac brands alongside our existing partner 3M. Thus, we increased the diversity of services and products we offer to our customers. Additionally, we upgraded our machinery park with new tape transfer and cutting machines, increasing our production capacity and achieving our goal of responding faster to customer demands. One of the most important steps for us this year was passing all inspection procedures for the ISO 9001:AS9120 quality standard, the only valid certification in the aerospace and defense industries, making us one of the rare AS9120-approved companies in our country. We anticipate that the adhesives and tape sector will continue growing in 2022. This is because, in addition to new domestic and foreign investments materializing in various sectors, particularly renewable energy, aerospace, and defense industries, the projects signed by our existing customers both domestically and internationally will create new opportunities for us regarding raw material sales. With confidence in our country, our industry, and manufacturing companies, backed by our new partnerships and investments, we are prepared for all difficult conditions in 2022. Together with our manufacturing partners, we will continue to support Turkey's industry and provide our customers with the best service with all our strength to increase adhesive and tape usage.