Rapid industrialization in Asia-Pacific and other developing regions will expand the global coatings market in the next few years, despite flattening demand in the developed world, a new market forecast says.
The global market for coatings will reach 8.7 billion gallons in volume and $107 billion in value by the year 2017, according to the new projections by Global Industry Analysts Inc.
|UV-cure technology has a bright future in industrial coatings, the report says.|
That is good news for an industry “mauled” in recent years by plummeting volume and sales worldwide, the report says.
Regional Market Shifts
Better days are ahead, but not in the same old markets, according to Coatings – A Global Strategic Business Report.
The report notes “a major shift” in the coatings industry away from the U.S., Europe and other developed economies, toward developing nations in Asia and elsewhere.
“Sustained demand from the developed countries, in addition to the burgeoning demand from the developing countries, is contributing to the overall expansion of the coatings market worldwide,” the report says. “However, industrial growth in developing economies is a major growth driver for the coatings industry.”
The industry is “mature” in most of the world, but growth can still come from developing areas, depending on their levels of economic activity and the state of their construction industries.
Other growth drivers include the increasing stringency in regulations in many countries, rising competition, the growth of unique formulations, and new technology and product developments, GIA reports.
The global recession packed a different wallop for different coatings sectors, the report notes, looking back at the period of 2003-08.
Architectural or decorative coatings fared better than OEM product coatings and special purpose coatings (industrial maintenance, automotive and others), although the overall value of the market contracted by 4 percent in 2009.
Geographically, North American and European markets took the greatest hits, with declines substantially less elsewhere in the world.
The report also notes the “tremendous spurt” in raw materials prices in recent years, “oscillating in tandem with crude oil prices.” The cost of titanium dioxide has soared along with that of other pigments, additives and resins that are in short supply. BASF, DuPont and other international raw materials suppliers have responded to the spikes with greater vertical integration, the report notes.
Trendspotting: UV Cure
Looking ahead, the report sees UV-curing as the technology to watch in the area of industrial coatings.
The fast-growing market segment “is arguably emerging as the answer to the rising environmental concerns and stringent regulations,” GIA reports. “Several application-related advantages come to serve the technology, [including] absence of pot life issues, lower energy costs, fast cure speed, and reduced environmental impact.”
One-component UV-cure coating “ranks among the fastest coating chemistries available in the present context,” GIA says. Curing “takes few seconds to minutes, which makes it more ideal for use in applications that require faster turnaround time.”
Both waterborne and solids formulation UV-cure coatings also feature ultra-low VOC levels, the authors add.
Regional, Segment Forecasts
Led by China, India and Indonesia, Asia-Pacific represents the largest and fastest-growing regional market for coatings worldwide, with a compound annual growth rate (CAGR) of 5.1 percent expected through 2017. Europe ranks second in market size, followed by the U.S.
Although architectural coatings will continue to make up the largest share of the market, special purpose coatings are set to rebound sharply, with a CAGR of 5.3 percent projected through the study period.
Meanwhile, ongoing M&A activity has made “the big players bigger and smaller players finding the going extremely tough.”
That trend is unlikely to change, the report adds, as relentless cost-cutting in the mature markets leaves large companies “with no alternative but to integrate respective operations into a single entity in order to maintain synergies, cut down on costs and to jointly initiate R&D and marketing efforts to increase sales.”