Insight

A review and preview of the global fastener market

Named after the Roman god who is often depicted as having two faces – due to its ability to look to the future and to the past – the Janus Perspective is a unique feature that includes a wide cross section of global fastener business leaders, who have all contributed their retrospective of 2021 and thoughts on prospects and challenges for 2022.

Dr Gerhard Reusmann, CTO and COO, and Christos Tselebidis, key account manager global sales

How did 2021 progress for Dörken – with the multitude of challenges it presented – and did it differ from perceptions at the beginning of the year?

“Dörken Coatings expects sales in 2021 to be above the level of 2020 – this applies to both industrial coatings and architectural paints in two stage sales. After a strong first half of 2021, we saw a decrease in the second half of the year. The year was negatively influenced by significantly increased costs for energy, freight and raw material, as well as scarcity of raw materials. The raw material shortages also had a negative impact on the productivity of our customers, such as the automotive sector.”

What opportunities and challenges does Dörken believe lie ahead in 2022?

“The greatest opportunity for 2022 lies in the normalisation of the procurement situation. At the same time, the massive cost increases, driven among other things by increases in raw material costs and raw material shortages, will represent a major challenge. Overall, we can also see how the issues of sustainability and digitisation are still becoming increasingly important. That’s why we have already taken measures to achieve maximum flexibility in production through digitisation of all value-added processes and maximum sustainability in the use of energy, raw materials, buildings and machines.

In terms of economical and financial terms, we need to observe how the supply chain issues with semiconductors, but also other components, as well as major commodities, will impact the production of key sectors like the automotive industry. The longer the lack of these components and commodities remains the stronger the impact will be on the companies in this field. We are afraid that many small and medium sized companies will get into severe problems in terms of solvency. It is obvious that the uncertainty reigning in the automotive supply chains burden the above-mentioned companies and could push them to the edge of the abyss named bankruptcy.

After talking to many players along the value chain it is obvious that the cancellation of orders and the lack of reliable forecasts will continue to create massive costs. A turnaround in communicating with each other would probably make life easier to the complete supply chain – but this needs to start at the very beginning, the OEM.

On the one hand the markets might answer to the uncertainty in transport (availability of transport capacities and exploding costs) with localising their sourcing activities. However, it still needs to be observed if the capacities within the European fastener market are big enough to meet the local demands. Talking to many producers in Europe we found that the order books are full and that companies that had been reluctant to invest in new machinery now plan to massively increase their capacities.

There are so many aspects that make decision making in our business difficult – steadily increasing energy costs, raw material costs are partly exploding and social megatrends like CO2 reduction and green production, digitalisation, etc. In order to find reliable solutions to the questions arising from these challenges we will need to join forces and bundle our expertise along the value chains. Networking, cooperations and even coopetition will become something we will all need to think about.”

What will the technology drivers for the fastener sector be in the future?

“When it comes to defining the technology of tomorrow we see a strong tendency in cutting down CO2 emissions. This approach can be found in various fields: High-tensile strength fasteners, new materials, as well as insourcing of activities like heat and surface treatment. Equipment manufacturers keep on developing new machinery; chemical suppliers like Dörken keep on looking for new products; material suppliers are looking for more energy saving production processes. Apart from that, we believe that the applications will become more and more relevant. In particular, the automotive industry is currently facing a massive transformation, with many new applications the focus will be laid on to how best solve problems occurring in the application. A perfect example are the fasteners for battery cells and housings. What dimensions shall be used? How many fasteners do I really need? Are there alternatives to fasteners? Shall we use metric or special fasteners like self-tapping screws? All these topics need to be examined in detail to avoid problems in the field.

The companies that are willing to perceive these challenges as chances will be successful, those who see them as a threat will face massive difficulties.”