HOUSTON (ICIS)--Continued improvement in underlying demand, especially for electronics, durable goods and consumer goods, is likely to drive volume growth in 2021, US-based adhesives producer HB Fuller said on Tuesday.
CEO Jim Owens said he expects commercial activity to continue improving throughout the year with residential construction activity remaining solid.
“Growth in some end-markets, such as commercial construction and aerospace, will improve at a slower pace and may not return to 2019 levels of activity,” Owens said during an earnings conference call.
Owens cautioned that recessionary forces would continue to weigh on global economies throughout the year.
As the coronavirus pandemic continues to be a part of life in 2021, Owens said elevated demand for hygiene and health products, packaging and paper tissue and towels will likely continue into 2021 as consumers continue to spend more time in their homes.
Engineering adhesive end-market demand will likely remain elevated in early 2021, Owens said. This reflects increased activity from pent-up demand as people return to more typical activity levels in the second half of the year.
Owens said the company is starting to see rising raw material costs, which it plans to offset in two ways.
The company said it will adjust pricing and also look at new product formulations to reduce exposure to more expensive chemicals.
Owens said that any impacts of higher raw materials will not likely affect the company until the second half of the year because the specialty chemicals that HB Fuller buys, such as vinyl acetate monomer (VAM), tend to lag the commodity chemicals.
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