Market conditions are driving up the cost of many raw materials and manufacturers continue to face cascading supply chain challenges that have plagued the industry throughout the pandemic: shortages, bottlenecks, logistical concerns and escalating oil prices have been pushing up prices of raw materials used in the production of laminating adhesives for flexible packaging.
Laminating adhesives are based on polyester and polyurethane technology and require a range of raw materials from acids, glycols and solvents to make polyesters and isocyanates like TDI and MDI to make polyurethanes. In the last 3 quarters the prices of all of these raw materials have risen to unprecedented levels. While most of these raw materials are from the petrochemical chain and their price is affected by undercurrents in global oil prices, the overarching factor remains the demand-supply equation for these materials. Brilliant Polymers Managing Director, Gaurav Talwar said, “The problem isn’t just base material.” He cited increased energy and packaging materials costs, as well as sharply rising freight rates because of global logistics constraints. “We are currently in an unprecedented situation where due to several global factors the prices of all these raw materials are hitting record levels at the same time.”
There are four significant trends affecting raw material prices:
- Global steel prices have hit new records, this has led to an increase of over 50% in the cost of mild steel drums, the packing material of choice for the laminating adhesives industry.
- Logistics costs have surged both within India as well as in exports markets. The global shortage of shipping containers has led to a sharp rise in transport costs.
- Oil prices have risen sharply pushing prices up
- Strong global market demand, significantly China’s V shape economic recovery, has led to shortages on many raw materials
As a result of these factors, there has been an overall impact of over 50% on the cost of production of laminating adhesives. “Despite internal innovations and cost reductions, the magnitude of these rising costs is no longer sustainable. In order to continue producing worldclass products it is necessary for us to pass along some of these increased costs,” Talwar stated. “Over the last six months we have seen selling prices of laminating adhesives rise, but we are nowhere near the levels necessary. We expect these levels to be achieved in the coming quarter as the industry stabilizes to a new normal.
Innovative Solutions: Solvent Free Laminating Adhesives
To mitigate the effect of the upward pressure on prices, Brilliant Polymers has been focused on providing alternative solutions aimed at maximizing value for customers:
The use of solvent-free laminating adhesives has seen tremendous growth in recent years. By definition, these adhesives do not contain any solvent and hence have no volatile organic compounds (VOCs) that escape into the atmosphere, unchecked in many cases. This makes solvent-free lamination the first step towards sustainability. Typically, solvent-based adhesives are run at 35% solids, which means 65% of the mixed adhesive is solvent which is evaporated into the atmosphere. In addition to the issue of air pollution, this process of solvent removal also requires heat input which is a further burden on the environment. Further, with the precise dosing and application technology on today’s modern solvent-free laminators, adhesive deposition can be controlled minutely and maintained over time. This leads to savings and reliability over time.
The primary solvent used in the laminating adhesives industry is Ethyl Acetate; the cost of this material has more than doubled in the last two quarters. Today, savings of over 50% can be achieved by moving applications from solvent-based to solvent-free technology.
Brilliant Polymers has been at the forefront of solvent-free adhesive technology and is the market leader in India and a number of global markets. “We are encouraging our customers to move increasing numbers of their applications to solvent-free technology,” said Talwar. Brilliant Polymers is at the forefront of solvent-free technology and has a strong share in this market in India and several exports markets as well. A majority of Brilliant’s revenue comes from solvent free adhesives. Brilliant Polymers has several innovative solvent free adhesives:
Brilliant S631 and S621 along with their hardeners are unique products that combine various functionalities in one product:
- They offer excellent optics even in metalized film laminations at high speeds
- They ensure negligible impact on COF after lamination in thin PE films
- They can be used for medium to high performance applications like bigger bags (5 and 10 kg), aggressive fillings goods (including alcohol)
Brilliant S641 / S400 is Brilliant Polymers’ latest innovation and is a two-component solvent-free adhesive that offers faster PAA decay times as compared to standard products. This state-of-the-art product has several unique properties:
- Exceptionally fast physical cure and bond development
- Fast chemical cure and migration compliance for food safety
- Can be used for high performance applications including hot filling and can deliver savings of 50% or more in comparison to high performance solvent-based adhesives
Brilliant S745 and S715 are Single Component Solvent-Free Adhesives for flexible packaging and carton applications. They can be used to laminate substrates to paper or board or even for film-to-film lamination and deliver savings when used to replace solvent-based adhesives.
Increase in Manufacturing Capacity
Looking ahead Gaurav Talwar says, “We see increasing demand for laminating adhesives for flexible packaging and are investing to double our manufacturing capacity. We expect our increased capacity to go online by the third quarter of 2021. Our increased capacity along with our strong relations with suppliers, customers and partners will ensure market leading growth in the coming years. As always, all products from Brilliant come with our Promise of Technology, Quality and Service!”
Established in 2011, Brilliant Polymers Pvt. Ltd. Is the leader in supply of laminating adhesives for flexible packaging in India. Its solutions include a comprehensive range of solvent based and solvent free adhesives. End use applications include food, consumer goods, pharmaceuticals and other industrial applications. It operates a state of the art manufacturing facility in Ambernath, Maharashtra and reaches customers all over India and over two dozen countries through local warehouses and channel partners.
https://brilliantpolymers.com/
