The Powder Coatings Market

By Christine Esposito | August 9, 2005

Companies are improving their technologies and expanding their businesses to gain a greater foothold in this growing market.

From small custom coaters to multi-national OEMs, those who use powder coatings are a diverse bunch with one thing in common: they are part of a market that has posted great numbers in recent years.

According to a new study on the powder coatings market released by Cleveland, OH-based Freedonia Group, demand for powder coatings in the U.S. is forecast to rise nearly eight percent per year through 2005 to reach 505 million pounds, valued at $1.6 billion. According to Frost & Sullivan, the European powder coatings market was estimated at $1.14 billion in 2000. Even though these markets are outpacing growth in many other coatings segments, there has been a downward trend of late. Europe's revenues in 2000 were down 4.5%. In the U.S., the 7.9% annual growth rate projected between now and 2005 is off from the 9.4% tallied between 1990 and 2000. By 2007, Frost & Sullivan predicts powder coatings sales in Europe will reach to $1.82 billion, driven by a compound annual growth rate of seven percent.

Yet even as growth rates-and economies-slow, coatings companies still see gold when it comes powder. It should come as no surprise that powder coating suppliers are utilizing every technology available to meet their customers needs for speed, performance and appearance. New developments range from expanded business operations to new chemistries to in-house e-commerce efforts.

New Product Developments
Several companies have recently added to their product portfolios, with low-energy and improved performance taking center stage at several manufacturers.

"Our customers have been burdened with higher energy costs," said Patricia Hendrick, marketing manager, NAR, Morton Powder Coatings. The company's new Low-E powder products "offer higher productivity at lower curing temperatures. The savings are most evident on heavy mass parts, and parts that are difficult to cure," Ms. Hendrick said.

H.B. Fuller recently commercialized a line of high-performance UV powder coatings for wood and metal applications, according to Walt Blatter, market manager, wood products. The benefits of the new product line are its low-energy requirements and higher process speeds. "A typical process schedule is two minutes at 100�C to melt and flow the powder coating, followed by five seconds of UV light for cure," Mr. Blatter added that the line, which is suited for heat-sensitive substrates like wood, plastics and assembled components, is currently available in North America and will be available in Europe in 2002.

Atofina Chemicals recently received some good news regarding its thermoplastic Rilsan fine powder coatings. An independent study showed that the product performed almost eight times better than epoxy coatings during cavitation resistance tests which stimulate the efforts of high flow or turbulent water on coated pipe. According to Atofina, during the first 24 hours of testing, Rilsan-based coatings lost just 0.02 grams while the epoxy coatings lost 0.15 grams. After 13 additional days, Rilsan lost a total weight of 0.08 grams.

"This study is another example of how well Rilsan coatings resist abrasion from sustained high or turbulent flow," said Neil Lehman, marketing manager for Rilsan fine powders. "The coating is an excellent choice for piping in chemical and petroleum plants where resistance to chemicals and hydrocarbons is imperative for greater asset productivity."

Improved performance is also the news coming from the PPG powder coatings camp. According to PPG, it now has a "breakthrough powder coating technology" that has the potential to greatly improve mar- and scratch-resistance in a broad range of industrial applications.

Several formulations of Envirocron XMR powder coatings have approached the mar performance usually associated with porcelain enamels, according to the company. "This represents a huge leap forward in powder coating technology," said Rob Edwards, PPG's director of global powder operations. "This new technology has the potential to have a huge impact in any industrial application where the scratch resistance of the coating is beneficial."

PPG contends improved mar- and scratch-resistance delivered by Envirocron XMR powder coatings will provide significant value to customers. "This new technology provides value to industrial coatings users in two ways," said Mr. Edwards. "First, it enhances the mar- and scratch- resistance of the coated part. Second, it makes the coated part more resistant to damage caused by handling and transportation. These two factors should ultimately improve the performance of the coated part in the end use application and reduce the customer's costs."

Envirocron XMR, which was in development for more than three years at PPG's coatings R&D center in Allison Park, PA, is available in a broad range of powder chemistries including pigmented and clear formulations, according to PPG.

Morton Powder Coatings, which was a pioneer in developing bonded metallic technology, has continued to develop and improve its metallic product offerings. Bondabrite is its latest breakthrough. "Bondabrite products apply to a consistent, uniform film and are reclaimable," according to Ms. Hendrick.


The global headquarters of Akzo Nobel's Interpon Powder Coatings business is located at Felling Gateshead in northeast England.

Protecting Your Position
Improving and protecting your position in the powder coatings market also means investing in and expanding operations through new accords, new facilities and more focused business units.

Akzo Nobel recently formed a new powder coatings business unit that it contends underlines its "commitment to meeting the specific needs of powder coatings users worldwide." Through this new structure, Akzo Nobel's powder operations, which includes the Courtaulds businesses acquired in 1998, is now operating under one brand-Interpon Powder Coatings. The business unit incorporates both of the company's powder lines: Interpon (architectural, automotive, appliance and industrial finishing) and Resicoat (for electrical insulation, valves, pipe fittings and steel rebar).

Akzo Nobel's powder operations has been busy this year. In the first quarter, it opened a 10,000 ton powder coating facility in Turkey, and following successful introductions in the UK, France, Germany, Sweden and China, the company is rolling out Interpon Express globally. "This technology revolutionizes the servicing of small and special color orders from industrial finishers-traditionally an area of weakness for powder," said Richard Higgins, market manager, architectural, for Akzo Nobel's powder coatings business.

Servicing small- and medium-sized companies is also the rationale behind a soon-to-be launched stock line of powder coatings from H.B. Fuller. The new line includes 105 standard weathering chemistries, 28 metallic and 19 non-weathering chemistries, according to Matt Albin, market manager, stock product line. The line-which at press time was unnamed-will replace H.B. Fuller's Omega line. According to Mr. Albin, the Omega line consisted of many different chemistries, requiring applicators to have to worry about product compatibility.

"The new stock line allows for faster color change and applies consistently color to color," Mr. Albin said. "By focusing on a single chemistry we were able to devote a great deal of time and resources to developing the platform. The result is a very robust product line with superior application and appearance characteristics." H.B. Fuller plans to add 50 more products to the new line this fall, including veins, textures and wrinkles.

Late last year, BASF started-up a new powder coatings plant in Morganton, NC, which will serve as the base for its North American powder coatings operations. The facility, which has an initial annual capacity of 10,000 metric tons, produces powder coatings for automotive, household appliances, radiator and pipeline industries, as well as other for other industrial applications.

Rising Demand: U.S. Powder Coatings Forecast
Appliances & Housewares (million lbs) Furniture (million lbs)
Source: Freedonia

In addition to the site in North Carolina, a power coatings mill came on line at BASF's Vernabia site on Lago Maggiore in Italy. The facility-which can mill up to 3,500 kilograms of powder per hour-is the first phase in the expansion of white powder coatings production at Vernabia. At the plant's inauguration, Wolfgang Straehle, head of the industrial coatings division of BASF, said, "With this investment, we underscore once again our determination to keep growing in powder coatings, a core technology. The mill marks a vital step toward raising both capacity and productivity."

Joint ventures and licensing agreements are strategies employed by companies that want to operate on a global scale.

Oxyplast Powder Coatings, Belgium, has adding DAI PHU Company of Vietnam to its network of licensees. The new firm increased Oxyplast's licensees to 22 worldwide.

In June, Becker Industrial Coatings (BIC) acquired the powder coatings and liquid paint businesses of Blancomme. According to Becker, by acquiring Blancomme and its 15% market share, it has gained a strategic position in the French powder coating market.

Blancomme's powder coatings business, based in Thouars, Deux S�vres, supplies powder coatings for general industrial use as well as for automotive and construction markets. It also supplies powder for coil coating application, an important market for Becker. Gilbert Marguier, who had been BIC's director, special coatings, has been appointed managing director of Blancomme's powder coatings business. The operation joins Becker Powder Coatings operations in the U.S., the UK, Italy, Sweden and Poland.

LG Chem has finalized an agreement with Ferro Corp. in which the two firms will establish a powder coatings joint venture company-LG Ferro Powder Coatings Ltd.-to serve the Asian market. Through the deal, Ferro gains a greater presence in the Asian market and LG Chem exits the powder business, which despite having a 19% share of the Korean market and an annual capacity of 5,000 metric tons, was not considered a core business. Under the terms of the accord, LG Chem, which will sell its powder business to the new entity, will retain a minority share in the JV.

Pushing beyond North America has been key to H.B. Fuller's growth in the powder market. Offering products in several different geographic regions has helped the Minneapolis, MN-based company serve large accounts around the world. For example, the company has been a key supplier to JCB, Europe's leading construction equipment manufacturer and one of the top five firms globally. JCB, which recently invested in a new production facility in Savannah, GA, and has eight additional facilities in the UK and one in India, has been using Fuller's coatings for six years. "Our benefit of global manufacturing and research has enabled us to support JCB in all regions," said Andy Stevenson, ACE market manager, H.B. Fuller.

E-Commerce: Going It Alone
For larger players, adding e-commerce capabilities has been a primary concern-even in the wake of the dot-com fallout. After searching for viable options, some companies have taken matters into their own hands.

"E-business has undergone many changes during the past 12 months," said Ms. Hendrick of Morton Powder Coatings, which was once a supplier to now defunct coatingsMart.com. Morton is now testing "a new, user-friendly channel for customers to purchase products."

H.B. wasn't satisfied with the roster of online portals either. "We decided it wasn't a good fit for us; our business model was a better proposition," Mr. Albin said.

After a successful BETA test in May, H.B. Fuller's powderstore.com debuted in mid-July. H.B. Fuller's customers now have online access to ordering, order status, MSDSs, technical data sheets and delivery tracking. "Many businesses are moving towards-commerce, and a lot of our customers wanted the convenience of access 24/7," said Mr. Albin.

Like its physical presence, H.B.Fuller sees the need to expand its virtual presence if it wants to move ahead in the market. Powderstore.com's current focus is mainly on existing customers in North America, however, H.B. Fuller is "planning significant launch activities" at Coating 2001 in October, said Mr. Albin. Plans also include expanding powderstore.com to Scandinavian countries, Belgium, France and Germany, a new market for the company.