The U.S. additives market has been characterized by slow, stable growth over the years and is likely to continue in such fashion throughout the foreseeable future.

The total revenue from the U.S. additives market was $940 million in 2004 and is projected to grow to $1,147.9 million in 2011, with a compound annual growth rate (CAGR) of 2.9% for the periord 2004 to 2011, according to research conducted by Frost & Sullivan (see chart below and on page 38).

Trends that are driving the additives market are increased demand for low VOC coatings, growth in the use of low surface energy substrates such as plastics and pressure on coatings suppliers to reduce cost. Hindering the market is the increased cost of raw materials and energy, which is affecting housing sales and reducing the demand for capital goods, according to Robert Miller, product manager, Troy Performance Additives. "The high cost and availability of raw materials is a major concern. Additive suppliers must respond to the needs of the coating formulator by supplying products that have little or no VOCs and enhance the perfornmance of coatings to compensate for the removed solvent," he said. "The availability and price of certain raw materials like aromatic solvents, oxygenated solvents and synthetic waxy polymers have presented challenges to our business in 2005. The coatings market place has continued to search for additives that will help ultra-low or no VOC formulations. This has forced additives suppliers to develop unique materials to solve specific application challenges."


One of the primary considerations for the selection of an additive is the functionality of that additive, according to Patrick Northrop, technology manager, BASF automotive OEM coatings solutions business. "That means we look for additives that are cost-effective while contributing multiple, desirable properties to the final coating product with minimal effect on other important properties of the coating," he said. "Additives with cross-functionality that allow them to be used in multiple product families-such as electrocoat, waterborne primer-surfaces and/or waterborne basecoats-are highly desirable from a coatings manufacturers' standpoint. Such versatility helps to reduce the complexity and costs of manufacturing and inventory management."

Kevin Quinn, commercial platform manager, surface modifiers, Noveon, Inc.,  agreed that the first consideration when choosing an additive is whether it enhances the desired property. "If the desired property is achieved then cost is the next important driver. It is desirable that additives be developed that are very versatile and there are a few well known products in the market place that are widely used such as acrylic flow and leveling agents or benzoin degassing agents for powder coatings," he said. "But there are many more unique additives developed for specific applications. I think that more specific additives will be developed in the future rather than general types like those mentioned above."  

Discussing biocides in particular was Ray Fahmy, North American marketing manager, biocides, International Specialty Products (ISP). "Similar to many specialty chemicals markets, with biocides the recent increases in raw materials and fuel coupled with the inability to pass these increases onto customers who are also trying to contain their costs has been a challenge," he said.  "There continues to be a need in the biocides market for unique products that offer performance advantages such as lower VOCs, broader spectrum protection against various elements and lower in-use costs."

Going into further detail about VOCs, Fahmy said it is the major environmental issue facing the industry and there is the continued trend towards lower VOC systems. "For biocide suppliers that means the ability to offer low or zero VOC products at costs comparable to products existing in the market today," he said. "For biocides it is important to have products that offer broad spectrum protection including preservatives that protect against bacterial spoilage of liquid water-based products and fungicides that offer broad spectrum protection of paint films against fungal growth."


In the field of corrosion inhibitors, Halox is seeing the fruits of its labor as chrome-free technologies have become a 'must' for coatings manufacturers both domestic and abroad, according to Michael O'Brien, general sales manager, Halox. "With heavy-metal free initiatives in Europe, many of our current domestic customers are looking toward this technology as a way to get ahead of the curve. These types of driving factors help to assure financial stability in the additives marketplace," he said. "Many customers continue to ask for nanotechnology, and we see this as an area of growth.  We also see potential in providing non-toxic solutions to their current toxic counterparts. Many times we need to think 'outside of the box' when developing solutions for our customers, and one particular way we have found successful is by working closely with other additive suppliers to combine technologies to provide a synergistic approach / solution."

Automotive OEM and refinish are the most important markets for high quality UV light stabilizers, commented Bob Post, vice president of coatings industries, pigments and additives division, Clariant Corporation. "Sales of additives for these applications are suffering from the slow and depressed automotive business," Post said. "On the other hand, the trends to waterborne and low VOC systems are drivers for new additives, particularly developed and suitable for these new systems. In addition, the ongoing request from automotive makers for better quality and durability are a continuous challenge and driver to develop and launch new additives with better performance."

For 2006, Post predicted that the marketplace will become more and more competitive due to additional suppliers particularly from Asia. "This is going to lead an increasing level of commoditization even in the high quality sectors like automotive OEM," he said. "The leading additive suppliers will respond to this challenge by developing and offering new products with better performance and perfect suitability for the new coating systems supported by excellent technical customer service."

Clariant is forecasting 2006 to be a strong year, according to April Yeager, business line manager, industrial performance chemicals, functional chemicals division, Clariant Corporation. "The additives market is a very mature market, so we don't anticipate huge growth spurts, but new technologies and new requirements could change things," she said. "From our point of view, the market is crowded and because of this the only way to get a new product out is to be a problem solver for the customer. You have to be able to bring something to the customer to help them and at a reasonable cost. The benefit has to be worth what the customer is paying for it."

Cost and availability issues lead the way in terms of issues facing additive suppliers, according to Alan Kalmikoff, president Keim-Additec Surface USA. "The market has not seen in aggregate the issues of cost and availability since the early 1970s," he said. "In terms of other issues, the sheer volume of suppliers and products coming from all over the world creates an overwhelming amount of choices given to the paint and coatings formulator. While having choices is always a plus, this can be good and bad as information overload can be problematic as well. Diluted pricing in the market due to competitive pressures even in the face of ever increasing costs is a plus to customers and a nightmare for suppliers' profitability."