Whilst details are still pretty limited it does appear that Saint Gobain have aquired a control in Sika.
What does this mean in the UK for the 2 companies?
The Sika Board and Group Management have identified 2 product areas where there will be direct competition between the 2 companies, technical mortars and tile adhesives.
Whilst globally this may be an issue, how big an issue is it to the companies in the UK?
The definition of technical mortars is very subjective, but if we assume this means renders, repair systems and grouts in the UK where are the areas of compitition?
- Saint Gobain, mainly through there weber brand, have a high level of market share in the External Wall Insulation market, which is a market Sika is absent from!
- Sika has a strong market share in repair systems and are market leaders with some of its corrosion control systems, whilst the weber brand is present in this market in the form of flowable concrete and sprayed concrete, it is generally used in the commodity end of the product range.
- Grouts products, whilst high volume are very low value materials. This is a strength of weber. Sika have struggled for many years to compete in this market and in recent times have all but withdrawn from it!
Tile adhesives in the UK are dominated by several companies such as weber and ardex to name a few, but for Sika in the UK this product area is a relatively small market, generally only exisiting in the portfolio to provide a full range of products to major customers such as DIY retailers and builders merchants.
Will there be a conflict between the 2 companies in the UK in tile adhesives and technical mortars, well not really! Several years ago this would have been a major issue, but both companies have found there own route through the markets and there startegies have diverged.
Saint Gobain with its weber brand has a very effective production facility for the products produced for the technical mortars and tile adhesive segments, whilst Sika have a smaller production facility that is without doubt more expensive to run and produce for this area.
My guess will be that the synergies Saint Gobain are looking for from the aquisition, in the UK market, will be support function based with a particular emphasis on production of the materials. The conflict of interest mentioned by the Sika Board, may simply not exist in the UK market, and the divergant strategies of the 2 companies may mean a strong market position, without duplication of effort and resources.
Watch this space to see how this one pans out!