Henkel steps up investment in adhesives

After exiting fast-moving consumer goods (FMCG) segment in India a few years ago, German major Henkel has been quietly ramping up its presence in adhesives, a business that gives it nearly ~2,500 crore in revenue. While rival Pidilite is best known for its consumercentric brands such as Fevikwik and Fevicol, Henkel is strong in the industrial adhesives segment, providing solutions to sectors such as automotive, metals, packaging and aerospace.

On Tuesday, the company launched is eighth plant in India, which is its first multi-technology unit, at an investment of ~400 crore. The plant, also Henkel’s largest adhesive manufacturing unit in the country, is located near Pune in Maharashtra.

Besides its manufacturing facilities, Henkel also has an innovation and product development centre and a flexible packaging academy in the country for its adhesives business.

Jan-dirk Auris, member of the management board at Henkel AG, said the plan was to push India up the pecking order of markets in terms of top line from its current 10th position, using acquisitions, joint ventures and alliances as way forward. The consumer adhesive space, in particular, he said, was an area that Henkel was eyeing closely for future growth.

“India is an important emerging market, with tremendous growth opportunity for our adhesives business. I will not exclude moving into consumer adhesives in the future, given that we would like to see India get into the top five markets for Henkel globally in the next few years,” he said.

The statement acquires significance since Pidilite has been strengthening its presence in industrial adhesives, tying up with German player Jowat recently. Jowat is counted among Henkel’s competitors globally and the collaboration with Pidilite will see its portfolio available in India, Sri Lanka, Bangladesh and Nepal, experts tracking the market said.

Pidilite has also stepped into areas such as floor coatings, wood finishes and specialised water proofing in recent years using acquisitions and JVS as an entry point.

Auris said the India business of Henkel had been growing at a clip of 10-11 per cent annually, which it is expected to maintain in the future. The eighth unit would not only cater to the domestic market, he said, but would also take care of needs in West Asia, Africa and South Asia.

Invests ~400 crore in eighth plant in India launched on Tuesday