Latin America has emerged as one of the most important regions for paint and coatings manufacturers. Both suppliers and manufacturers are investing heavily in this fast-growing region.
Latin America correspondent Charles Thurston takes an in-depth look at this fast-growing region in his annual Latin America report, “Latin American Demand Rises With Middle Class” (page 30). According to Thurston, the Latin America paint and coatings market is estimated to be $9.7 billion. The Latin American market for paints and coatings is rising in importance relative to other geographic markets as economic growth in the region climbs upwards and as large new investments by both customers and suppliers are planned.
Some of the key findings of his report:
According to the United Nations Economic Commission for Latin America (Eclac), the region expanded by 2.5 percent during 2013 and is predicted to grow by 2.7 percent this year, the agency reported in April. That would place the growth of Latin American paint and coatings at 4.7 percent to 5.7 percent this year, since annual paint sales are typically a few percentage points ahead of GDP, Thurston reported. A variety of international multi-client studies have pegged growth in the region at 6.0 percent per year over the near to mid-term.
One segment that is growing fastest is automotive OEMs and auto parts, particularly in Mexico and Brazil.
IHS Automotive forecasts that “nearly 2.3 million additional vehicles will be sold in South America by 2025, equal to the output of 10 modern assembly plants. Most of the growth will occur in Brazil, followed by Argentina and Colombia.”
Ernst & Young estimates that total investments in Latin America’s automotive industry over the decade beginning in 2007 will amount to $17.7 billion. “The production of light vehicles are expected to grow at a CAGR of 6.88 percent over the next four years — from 7.3 million to 9.6 million units by 2017,” the consultant indicated in a study of the market last year.