Key takeaways

The joining parts market comprises businesses that design, develop and manufacture components used to hold pieces of an assembly group together. This includes fasteners (e.g. screws, bolts and rivets) and fittings (e.g. clamps, flanges, valves and other components) manufactured through different processes such as cold forming, machining, forging and casting, depending on the material used and the desired end-product properties. As such, we segmented the European market by component type: (i) fasteners, (ii) fittings and (iii) generalists.

The European joining parts market is fragmented, with several large manufacturers benefitting from a global presence and strong brand image (e.g. Bollhoff Group has a network of ~45 locations globally), followed by a long tail of SMEs that focus on domestic markets and cater to select industry verticals (e.g. Avantus Aerospace serving the aerospace industry). Incumbents historically benefit from proximity to industrial clusters, where a strong distribution network acts as a differentiator, along with new technological advancements corresponding to lightweight materials (e.g. aluminium, magnesium) and advanced manufacturing techniques (e.g. 3D printing, CNC machining). The industry is ripe for consolidation as incumbents will try to capture and establish a broad regional and sectoral footprint, capitalising on the regulatory know-how provided by local and regional manufacturers. This is likely to be accelerated by the competitive pricing of low-cost peers from Asia, leading to bottom-line pressure.

Investor-led interest has been moderate, with ~30% of identified European assets being backed by financial sponsors (as of February 2024). Investors are primarily attracted by the (i) shift from traditional joining technologies (e.g. welding) toward the use of higher-margin dissectible joining components, (ii) growing demand from the electrifying automotive sector and the extensive need to increase fleet in aerospace, as well as (iii) improving efficiencies from technological advancements. On the flip side, (i) structural shortage of skilled labour with increasing wage costs, (ii) supply chain issues surrounding raw materials (e.g. steel), (iii) exposure to cyclical end markets and (iv) significant competition from low-cost Asian peers serve as detractors for investors.

ESG considerations primarily relate to environmental and social aspects. Herein, environmental topics relate to greenhouse gas emissions generated by the extraction and processing of raw materials as well as improper disposal of waste materials. Players are investing in sustainable initiatives with greener manufacturing practices (e.g. using solar power) and using recyclable raw materials like aluminium. Other environmental considerations arise from the harmful chemicals used in coatings and treatments applied to joining parts. In response, industry leaders have embraced eco-friendly alternatives (e.g. zinc or phosphate coatings) to mitigate adverse ecological effects. Social issues revolve around providing proper working conditions, with a strong emphasis on personnel training and injury prevention protocols. To improve working conditions, incumbents implement procedures to reduce accidents at their sites (e.g. mandatory training). Lastly, responsible sourcing of raw materials is top of mind for incumbents. Herein, they aim to form socially and environmentally responsible contractual relationships, ensuring adherence to human rights as well as labour and environmental standards.

Company benchmarking

Market growth

The global market for industrial fasteners generated ~$104.5bn in sales in 2023 and is forecasted to grow to ~$109.7bn in 2024 (+5.0% YoY; Beroe, February 2024)

Statista (April 2022) estimated that the global industrial fastener market reached ~$116.5bn in sales in 2022 from ~$85.7bn in sales in 2016 (+5.4% CAGR 2016-2022)

According to Technavio (February 2023), the global valves and fittings market generated ~$2.2bn revenue in 2022 and is anticipated to reach ~$2.7bn by 2027 (+4.5% CAGR 2022-2027)

Positive drivers

Leveraging innovative manufacturing methods (e.g. 3D printing, additive manufacturing) and advanced materials (e.g. lightweight metals) offers opportunities to enhance precision, reduce weight and improve durability (Fastenex, August 2023)

Demand for industrial joining parts in the consumer electronics and aerospace sectors is expected to surge. Firstly, the evolution of IoT as well as the rise of smart offices and homes are driving demand for consumer electronics products (EuroDev, February 2024). Secondly, expanding aircraft fleets in both commercial and military segments across Europe further contributes to this development (Fastener Eurasia, March 2023)

Ongoing shift from traditional joining methods (e.g. welding and adhesives) toward more economical bolts and screws. This trend is fuelled by the ease of disassembly and reduced need for intensive on-site labour, as recycling and reusing equipment gain importance (LNA Solutions, January 2024)

Negative drivers

Structural shortage of skilled labour and rising salary costs will likely hamper organic growth opportunities and profitability. At the same time, innovations and technological advancements within the industry have widened the knowledge gap among engineers and fabricators, compelling manufacturers to seek out the right talent (PEM, April 2023; Industrial Products Finder, September 2021)

Freight shortages and unstable raw material ( e.g. steel) prices are expected to persist. The global political environment continues to impact the global supply chains, with the ongoing conflict in Ukraine affecting the availability and cost of raw materials. To illustrate, Russia accounts for ~6% of global aluminium and ~4% of global copper production (Beroe, February 2024; PEM, April 2023; EUROFER, October 2023)

The implementation of the new EU anti-dumping policy has triggered an influx of orders, causing significant disruptions to delivery timelines. This has pushed players to ramp up in-house manufacturing capacity, reaching or even surpassing maximum capacity utilisation levels. Consequently, delivery schedules have more than doubled, adversely impacting market reputations for some (Bulten, February 2024; Fastener and Fixing, December 2021)

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