UAE Adhesives Market is experiencing robust growth, having reached a valuation of USD 231.82 million in 2022, and is projected to reach USD 404.61 million by 2030, exhibiting a steady CAGR of 7.21% for the forecast period between 2023 to 2030. Demand for adhesives is greatly influenced by the booming construction and infrastructure development in the UAE, which is driven by urbanization and government initiatives along with growing usage of gluing tiles, flooring, panels, and others.
The e-commerce, retail, and food industries are fuelling the packaging industry’s rapid expansion, which in turn is growing the demand for adhesives across carton sealing, labelling, and flexible packaging. Furthermore, the UAE adhesive industry is further driven by technological developments in adhesive formulations and application techniques as well as the growing awareness of environmental sustainability.
The automotive, aerospace, electronics, and packaging industries and other industrial sectors are creating major traction in the UAE market growth for adhesives. These industries make extensive use of adhesives for bonding parts, assembly, packaging, and among other uses. Additionally, the UAE automotive industry has various plans on increasing its assembly lines and manufacturing operations, which is expected to drive the demand for adhesives in UAE.
Strong Infrastructure Developments
The growing smart cities and urban infrastructure projects across the UAE along with rapid urbanization. The demand for adhesives is majorly driven by the construction of infrastructure facilities, commercial complexes, residential towers, and high-rise buildings. Modern architecture uses materials like glass, aluminium, and composite panels all of which require adhesives to bond them together.
UAE is working on a number of transportation and road infrastructure projects, including the USD 2.7 billion Sheikh Zayed double-deck road project during 2023 says international construction. More unconventional transportation initiatives such as the USD 5.9 billion proposed hyperloop project between Dubai and Abu Dhabi. These large-scale projects make extensive use of adhesives across construction, decoration, and specialty coatings. The distinct specifications and requirements of these large-scale projects are highly driving the adhesives market in UAE.
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Demand for Adhesives across Energy Sectors
UAE has been funding renewable energy initiatives, such as solar and wind energy. Adhesives are crucial in the installation of solar panels, wind turbine blades, and other components used in renewable energy projects. Demand for adhesives with characteristics that can withstand harsh environmental conditions and guarantee the growing emphasis on renewable energy generation drives long-term bonding durability.
For instance, according to the Green Fuel Index report, UAE experienced the largest global increase in renewable energy capacity over the past ten years, which reflects the government’s primary focus on implementing programs to meet its net-zero ambitions. Emirates’ capacity increased to 2,540 megawatts in 2020 from 13MW in 2011. The UAE government has established sustainability objectives, including LEED (Leadership in Energy and Environmental Design) certifications and green building initiatives. This shift towards renewable energy strengthens the demand for Adhesives in the UAE.
Boom in Packaging Market through E-Commerce Sales
The e-commerce, retail, and food industries are driving the UAE’s significant expansion in the packaging industry. For packaging tasks like carton sealing, labelling, laminating, and flexible packaging, adhesives are crucial. The expansion of the adhesive market is heavily influenced by the rising demand for packaged goods especially from the e-commerce segment and the move toward environmentally friendly packaging options.
Global retail e-commerce sales were about USD 4.9 trillion in 2021 in the UAE. In 2022, the UAE had the fastest-growing e-commerce market in the world as global online sales continued to experience a meteoric rise. With an online population of 1.4 billion, the UAE is anticipated to see an increase in e-commerce spending. This level of demand hike for packaged goods will strengthen the adhesives demand in the UAE.
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Expanding Automotive Industry
With numerous auto assembly and manufacturing facilities, UAE has a strong automotive industry. In the production of automobiles, adhesives are frequently used for bonding parts, interior trim, structural bonding, and other purposes. The UAE’s demand for adhesives is directly impacted by the expansion of the automotive industry.
For instance, M Glory Holding Group, a technology investment firm based in Dubai, is launching an electric vehicle manufacturing facility as part of the UAE’s plan to develop its manufacturing industry.
The total number of units sold in June 2022, increased 8.1% on an annual basis, representing a 9.3% increase in the UAE’s overall automotive market from the same period in 2021. This rise in the Automotive sector drives up the demand for adhesives in UAE.
Impact of COVID-19
The COVID-19 pandemic had both positive and negative impacts on the adhesive market in the UAE. Disruptions in the global supply chain due to restrictions on transportation and factory closures resulted in challenges in sourcing raw materials for adhesive production. The construction industry was considered as a “vital sector” in Dubai at the time of the sterilisation lockdown, exempting it from governmental restrictions. Subject to obtaining a permit from the Dubai Municipality and the Permanent Committee for Labour Affairs, construction sites were allowed to continue operating and employees to commute to and from the site, therefore the demand for adhesive in UAE was stable compared to other countries during lockdown.
The increased popularity of e-commerce and home delivery services led to a higher demand for packaging materials, driving the need for adhesives used in packaging applications. Adhesive manufacturers in the UAE had to adapt their operations to comply with health and safety guidelines, which impacted production capacities. As the UAE gradually eased restrictions and implemented vaccination programs, economic activities began to recover, contributing to the revival of the adhesive market. Overall, the pandemic brought challenges but also new opportunities for adhesive manufacturers in the UAE, particularly in PPE-related applications and the packaging sector.
Impact of Russia-Ukraine War
The Russian-Ukraine war has had indirect impacts on the adhesive market in the UAE, as anticipated. Disruptions in global supply chains and geopolitical dynamics have affected the market. The conflict has led to potential disruptions in the supply of raw materials used in adhesive production, particularly those sourced from Russia and Ukraine. Trade disruptions and restrictions have impacted the availability and pricing of these key raw materials, affecting adhesive manufacturers in the UAE who rely on imports from these regions.
Geopolitical tensions and conflicts have created uncertainty in the global market, influencing investor confidence and decision-making. Adhesive manufacturers in the UAE have adopted a cautious approach, leading to potential adjustments in investment plans, expansion strategies, and overall market growth.
Economically, geopolitical conflicts can trigger broader impacts such as fluctuations in oil prices, currency exchange rates, and investor sentiment. These factors have indirect effects on the adhesive market in the UAE, influencing overall business activities, consumer spending, and market demand.
UAE Adhesives Market: Report Scope
UAE Adhesives Market Assessment, Opportunities and Forecast, 2016–2030F”, is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative and quantitative assessment of the current state of the Adhesives market in UAE, industry dynamics and challenges. The report includes market size, segmental shares, growth trends, COVID-19 and Russia-Ukraine war impact, opportunities and forecast between 2023 and 2030. Additionally, the report profiles the leading players in the industry mentioning their respective market share, business model, competitive intelligence, etc.
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