2013 was a very positive year for Nubiola. The company reported steady demand for its inorganic pigment products through the first three quarters followed by some softening in the fourth quarter. “Nubiola is growing on a year over year basis due to the global reach of our business and our disciplined focus in specific markets,” said Craig Utesch, national ales manager – coatings at Nubiola. “Our pigment chemistries are used in durable goods and consumer products with fairly steady consumption patterns, and we pursue a niche strategy in construction markets to lessen our dependence on new construction trends. For 2014 we expect a reasonable growth patterns to continue into mid-summer.”
“We saw the pigment market grow in 2013 especially in the last third of the year and particularly in industries serving construction and housing,” said Frank Lavieri, executive vice president and general manager, Lansco Colors. “Since 2009 we have seen the consumption of pigment increase steadily and at double digit rates at times. We expect 2014 to be another strong year.”
“The pigments market for the coatings industry grew only in the one to two percent range for 2013 versus 2012,” said Robert Poemer of Heubach. “There were several periods during 2013 where it appeared the recovery was finally taking hold and there would be more significant overall growth. Unfortunately, these were not sustained throughout the entire year.”
“The performance again varied significantly by the sector of the coatings business,” added Poemer. “Once again leading the way with the most improved performance was automotive where we have seen positive growth for the last four years. Although there are signs that the recovery is starting to impact the building sector, it still appears to be quite listless. As stated in previous years, the major questions for the building sector are when will we some return to normalcy and what will the definition of the new normalcy be?”
Overall, Poemer said 2013 was an okay year for coatings industry sales. “While it was certainly an improvement over the recession years, it still has not recovered to pre-recession levels,” he added. “Heubach’s sales for our line of high performance pigments was up slightly in 2013 with again the positive driver being the automotive OEM market and soft sales to the architectural/building market. For 2014, we do anticipate four to five percent growth and a good percentage of our growth will be fueled by the introduction of new products into our high performance line of pigments.”
2013 presented some unique challenges. “Traditional supply channels have been disrupted by unusual regional issues and selective plant closures,” said Bill Gray, business manager at Sincol USA Corp. “There continue to be ‘environmental headwinds’ in many part of the world, especially Asia. Sincol Corp. has been well prepared for these events with strategic investments in evergreen water treatment facilities and continuing expansion of our pigment chemistry designed for coatings. In the end, 2013 is another difficult year for the pigment supplier. Global production capacity still exceeds the global demand and short-term competition for key pigment standards remains heavy.”
Sincol Corp global pigment sales have increased by 30 percent versus 2012. “The European economy continues its turn to positive, with a corresponding increase demand for organic pigment,” said Gray. “The U.S. market has been steady, with the Asian/Pacific sales region leading the way for overall sales growth. We expect the 2014 global economy to continue to expand. We are looking for good sales growth increase to the NAFTA coating market.”
Sun Chemical Performance Pigments continued to see an upswing in the global pigments market in 2013, especially in the high performance and special effect markets. “Global demand for dyes and pigments is estimated to grow annually at a four percent rate,” said Michael T. Venturini, global marketing manager coatings, performance pigments at Sun Chemical. “The demand in the U.S. is stronger due to the rebound in the housing market.
“Asian demand has been growing in general especially in China and Thailand, but a slowdown was seen in Thailand in the later part of the year,” said Makoto Furukawa, sales and marketing manager – pigments for coatings and plastics, DIC Corp. “Stronger demand has been seen in Japanese automotive coatings from later in the years and in architectural coatings from the second half of the year due to an expected increase in the demand before implementing VAT percent increase scheduled in April 2014.”
“Growth of demand for pigments in Asia is expected especially in India and Indonesia, but slowed down in Japan after VAT percent increase,” Furukawa added.
Environmental issues continue to be a hot button issue for pigment suppliers. “Without question the biggest challenge to the global pigment market will be more strict enforcement of environmental regulation, especially related to water and industrial waste treatment,” said Gray. “This will continue the trend toward developing less environmentally challenging organic pigments. Another consequence of this trend will be a reduction in number of pigment producers worldwide. Sincol Corp is well positioned to meet these challenges and remain focused and committed to meeting the changing marketplace needs.”
“There is a real value in product and process stewardship and this trend will continue,” said Utesch. “Customers still want formulation tools with the lowest environmental impact and highest value from suppliers. With 100 years of manufacturing history and our leadership team in Spain, we continue to use REACH compliance as a strong influence for product development.”
Sun Chemical reported that it continues to see demand for pigments with unique performance properties that are tailored specially for the end user’s application, such as: stability/flocculation resistance in zero VOC systems, enhanced chemical and bleach resistance, increased strength allowing reduced usage and more value, and improved dispersability to reduce processing time. “Environmental regulations and social change for sustainable raw materials with less environmental impact are driving rapid change and innovation in all segments of the coatings market,” Venturini added. The trend is well established in Europe and the U.S., but is quickly growing in other regions.”
Another important trend affecting the pigments market is the consolidation of paint companies. “One of the major trends on a global basis in the coatings industry continues to be the consolidation of paint companies particularly in the NAFTA market,” said Poemer. “This obviously leads to larger customers with increased buying power and overall lower pricing. Unfortunately there also appears to be an overcapacity for the production of pigments and there is the potential for some restructuring within the market.”
“Consolidation is a major trend being driven by tighter regulatory and customer requirements coupled with the highly competitive nature of the global pigment market,” stated Lavieri. “Pigment buyers who have experienced past supply disruptions are more discerning than in years past and are doing more due diligence. Lansco Colors welcomes this scrutiny and is a major beneficiary as the legacy pigment manufacturers which once had patent protected monopolies become less important.”
Meeting Customer Demands
Remaining profitable under these circumstances requires that pigments suppliers are on the top of their game, delivering exactly what the customer wants.
“Generally speaking, all pigment customers are looking for acceptable and stable rheology, lot to lot consistency, a wide selection of Color Index choices to achieve specific performance attributes and, of course, competitive money value,” said Gray.
Nubiola said that its customers are looking for products that incorporate easily into a broad range of resins. “We have achieved this due to unique morphology that we have applied to both our colored pigments anticorrosive additives,” said Utesch. “We are also stretching color space and extending heat stability with our new product introductions. For the customer this translates into less dependence on costly organic pigments, lower loading rates for anticorrosives in DTM coatings and greater value in their formulations.”
“Our plant improvements are allowing Nubiola to create optimized intermediates that translate to refined products with a lower environmental impact,” added Utesch. “Our encapsulated pigments provide performance benefits to the coatings market while maintaining the excellent value offered by inorganic chemistries.”
Heubach participates in several R&D projects together with leading institutes and raw material manufacturers in order to develop novel corrosion protection technologies. Heubach’s latest research activities in the field of environmental-friendly anticorrosives have resulted in the development of a novel zinc-free product that exhibits high-performance and broad applicability.
DIC reports that its customers are looking for effect pigments more than conventional organic pigments. The company is focusing its R&D on the specialty market using aluminum products, which it obtained by the recent acquisition of Benda-Lutz.
Heubach’s continued focus is on high performance pigments that can offer customers a competitive advantage in their market. “Our R&D efforts in India and Europe have been focused on this important segment of high performance pigments which provide superior lightfastness, heat stability and chemical resistance,” said Poemer. “These important factors can be achieved in a number of ways including increased strength, ease of dispersion and viscosity stability. Pricing differentials high performance pigments versus conventional ones continue to shrink due to the overcapacity in the pigment areas.”
“In the coatings market, our customers are looking for us to deliver high quality products, top-notch service and value in terms of performance including: light fastness, durability, weather fastness, and ease of use,” Venturini said. “Additionally, the market is always looking for innovations – new materials that can help them differentiate their products and their customer’s products.”
Sun Chemical invests heavily in high performance and special effect pigment research. “It is a long tradition we will continue by focusing on areas that are important to our customers,” said Venturini. “Our Quindo, Palomar and Fanchon high performance pigment lines are continually being improved for value in delivering lightfastness, chemical resistance and heat stability. Our research efforts for Benda-Lutz metallic pigments not only include performance and anti-corrosive properties, but focus heavily on visual aesthetics of brightness and reflectivity.”