CREATING TOMORROW'S SOLUTIONS

KOREA ADHESIVE MARKET OVERVIEW

Korea Adhesive Industry AssociationSept. 26, 2013

Korea Adhesive Industry AssociationJae-Won Kim , KAIA, Sept. 26th 2013, Slide 2

KOREA ADHESIVES MARKET - OVERVIEW

• Key features of Korean market in 2012

Market size : 581,035 MT(4.5% ↓ from 608,765 MT in 2011)

Estimated Turnover value : 1,618 Mio. US$

Estimated Growth rate : 4.5% down vs. 2011

Export (11%↑) : 33,460 MT (352 Mio. US$)

Import (15%↑) : 23,532 MT (224 Mio. US$)

Korea Adhesive Industry AssociationJae-Won Kim , KAIA, Sept. 26th 2013, Slide 3

ADHESIVE MARKET TRENDS – KOREA (1)

• The Adhesives market is slow down by 4~5% in traditional adhesives market, such as building & construction, Packaging, woodworking, etc.

• On the other hand, high end application such as Automotive, Electronics and Electrical application showed higher growth. however it usually not classified as adhesive market segment.

• The majority of the demand in high performance/ high functional adhesives are not properly captured in the national statistics, because it is usually not classified as adhesive business.

• High Performance/Functional adhesives in Automotive and E/E used to be dominated by multinational adhesives players. However more and more local Korean companies or big Korean conglomerate entering into this market more aggressively .

• Sealant market is estimated to be about 200 Mio. US$.

Korea Adhesive Industry AssociationJae-Won Kim , KAIA, Sept. 26th 2013, Slide 4

ADHESIVE MARKET TRENDS – KOREA (2)

• Focus more on sustainability with Environmental Friendly drive. i.e. less & less solvent base. K-GHS regulation and K-REACH regulation are getting even more restrictive and the related laws already passed in congress, effective from July 2013, and Jan 1 2015.

• High performance value added products imported from Japan/Europe for mainly high-end applications. More and more local material is replacing those imported one.

• Material base shifting from traditional to new advanced material to meet the sophisticated market application in electronics or automotive market.

• Regardless, low cost formulation and low cost process still remain as key competitive factors.

• Korean gov’t supporting openly multinational corporation to develop new adhesive material for high end application locally in Korea.

Korea Adhesive Industry AssociationJae-Won Kim , KAIA, Sept. 26th 2013, Slide 5

KOREA ADHESIVES PRODUCTION BY PRODUCT’S TYPE

Type2010

(MT)

2011

(MT)

2012

(MT)

Formaldehyde Base

225,620 232,825 195,155

Solvent Base 24,966 24,452 26,096

Water Base 202,539 205,496 210,388

Hot Melt 27,542 28,416 28,437

Reactive 30,564 29,367 35,493

Pressure Sensitive

54,153 54,021 52,156

Others 32,666 34,188 33,310

Total 598,050 608,765 581,035

Water Base36%

Solvent Base4%

Formalde-hydeBase34%

Hot Melt5%

Reactive6%

Pressure Sensitive

9%

Others6%

Korea Adhesive Industry AssociationJae-Won Kim , KAIA, Sept. 26th 2013, Slide 6

KOREA ADHESIVES PRODUCTION IN APPLICATION

Type2010

(MT)

2011

(MT)

2012

(MT)

Plywoods 202,493 208,709 126,527

Wood Work. 25,611 23,690 68,232

Civil & Const. 112,823 120,661 119,143

Packaging 30,117 32,157 32,262

Paper, Book 28,164 30,068 30,718

Textiles 50,326 44,260 51,254

Transport. 42,042 45,907 48,581

Shoes. Leather 23,477 22,562 20,540

Elec & Elec 20,520 17,371 21,189

DIY 22,966 28,399 23,622

Other Ind. 39,511 36,981 38,967

Total 598,050 608,765 581,035

Source : KAIA

Plywoods22%

Wood Working

11%Civil & Constuct20%

Packaging6%

Paper, Book Binding

6%

Textiles9%

Transportation8%

Shoes. Leather & Rubbers

3%

Elec & Elec4% DIY

4%

OtherIndustrial

7%

Korea Adhesive Industry AssociationJae-Won Kim , KAIA, Sept. 26th 2013, Slide 7

7

KOREA ADHESIVES – EXPORT

ItemItem(HS Code)(HS Code)

20112011 20122012$ Inc.$ Inc.(%)(%)Vol (MT)Vol (MT) AmountAmount

(US$, 1000)(US$, 1000) Vol (MT)Vol (MT) AmountAmount(US$,1000)(US$,1000)

35063506-10--10-

Rubber Rubber basebase 137137 2,4532,453 150150 3,3493,349 36,536,5

Plastics Plastics basebase 6,9436,943 118,016118,016 6,9146,914 87,89387,893 △△25.525.5

OthersOthers 2,3542,354 22,46422,464 2,3052,305 26,61526,615 18.518.5

Polymers & Polymers & Rubber basedRubber based

(3506-91-0000)(3506-91-0000)23,23723,237 173,396173,396 24,09124,091 234,728234,728 35.435.4

TotalTotal 32,67132,671 316,329316,329 33,46033,460 352,585352,585 11.411.4

Source : KNSO

Korea Adhesive Industry AssociationJae-Won Kim , KAIA, Sept. 26th 2013, Slide 8

8

KOREA ADHESIVES – IMPORTS

ItemItem(HS Code)(HS Code)

20112011 20122012$ Inc$ Inc(%)(%)

Vol (MT)Vol (MT) Amount Amount (US$, 1000)(US$, 1000) Vol (MT)Vol (MT) Amount (US$, Amount (US$,

1000)1000)

35063506-10--10-

Rubber Rubber basebase 5555 1,0641,064 8181 1,2881,288 21.021.0

Plastics Plastics basebase 533533 87,91287,912 706706 104,551104,551 18.918.9

OthersOthers 731731 15,58915,589 896896 18,08118,081 16.016.0

Polymers & Rubber Polymers & Rubber basedbased

(3506-91-0000)(3506-91-0000)19,95019,950 90,50790,507 21,84921,849 99,94099,940 10.410.4

TotalTotal 21,26921,269 195,072195,072 23,53223,532 223,860223,860 14.814.8

Source : KNSO

Korea Adhesive Industry AssociationJae-Won Kim , KAIA, Sept. 26th 2013, Slide 9

ITEMS 2010(MT) 2011(MT) 2012(MT) (%)

Formalde-hyde

Urea 174,061 177,272 139,177

Melamine 24,818 25,006 25,023

Phenol 26,741 30,547 30,955

Subtotal 225,620 232,825 195,155 33.5

SolventBased

Vinyl acetate 8,075 7,553 7,818

Other resins 7,954 9,325 10,719

Chloroprene Rubber 6,691 5,701 5,625

Synthesized Rubber 953 485 4651

Natural Rubber 1,293 1,388 1,483

Subtotal 24,966 24,425 26,096 4.5

WaterBased

Vinyl acetate 26,944 27,981 28,917

Vinyl acetate copolymer 9,221 9,129 9,528

EVA Emulsion 14,468 16,832 17,269

Acryl Emulsion 137,160 132,765 130,042

Other Emulsion 4,018 6,471 12,250

Isocyanate 600 1,006 926

Synthesized Rubber 2,753 3,628 3,857

Others 7,375 7,684 7,599

Subtotal 202,539 205,496 210,388 36.2

PRODUCTION BY ADHESIVES TYPE – KOREA (1)

Korea Adhesive Industry AssociationJae-Won Kim , KAIA, Sept. 26th 2013, Slide 10

ITEMS 2010(MT) 2011(MT) 2012(MT) (%)

Hot MeltEVA 11,914 11,897 10,525

Rubber 10,225 11,580 12,660

Others 5,403 4,939 5,252

Subtotal 27,542 28,416 28,437 4.9

Reactive

Epoxy 12,203 8,312 11,523

Cyanoacrylate 281 293 300

Polyurethane 15,128 17,112 19,737

Modified Acryl 1,382 2,062 2,168

Others 1,570 1,588 1,765

Subtotal 30,564 29,367 35,493 6.1

PSA

Acryl 44,782 46,047 46,366

Rubber 8,632 7,228 4,997

Others 739 746 793

Subtotal 54,153 54,021 52,156 8.9

Miscellaneous 32,666 34,188 33,310 5.7

Total 598,050 608,765 581,035 100

PRODUCTION BY ADHESIVES TYPE – KOREA (2)

Korea Adhesive Industry AssociationJae-Won Kim , KAIA, Sept. 26th 2013, Slide 11

Application fields 2010(MT) 2011(MT) 2012(MT) Share(%)

Plywood 202,493 202,493 126,527 21.8

Woodworking 25,611 23,690 68,232 11.7

Construction 112,823 120,661 119,143 20.2

Packaging / Lamination 30,117 32,157 32,262 5.6

Paper Tubing 5,044 7,035 9,017 1.6

Bookbinding 23,120 23,033 21,701 3.7

Textiles 50,326 44,260 51,254 8.8

Vehicles 42,042 45,907 48,581 8.6

Footware / Rubbers 23,477 22,562 20,540 3.5

Electronics 20,520 17,371 21,189 3.6

Household Uses 22,966 26,399 23,622 4.1

Other 39,511 36,981 38,967 6.7

Total 598,050 608,765 581,035 100.0

PRODUCTION BY APPLICATION - KOREA

Korea Adhesive Industry AssociationJae-Won Kim , KAIA, Sept. 26th 2013, Slide 12

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