Globally, the decorative sector dominates the paint and coatings market, accounting for approximately half of the $80 billion industry. The U.S. market represents nearly 25% of the global market, however it is not growing well like other mature markets in Western Europe. At the same time, parts of the developing world like China are growing near double-digit rates while the greatest growth is coming from rest of the world markets (ROW) though from a small base. Eastern Europe is also showing significant growth.
Coatings growth in Asia-Pacific has been overwhelmingly industrial while ROW markets have a more prominent role in the architectural market. Decorative coatings are the bulk of the market in the developing world.
Europe-including Eastern Europe-accounts for approximately 32%, or $13 billion of the global architectural coatings market, according to consultancy Orr & Boss. Asia-Pacific represents approximately 29% of the market, or $12 billion. NAFTA is approximately 27%, or $11 billion of the market while ROW markets are 12%, or $5 billion.
According to Orr & Boss, the markets in Latin America, Africa, India and China are dominated by low-end, very cheap paint that tends to be produced by local manufacturers making global suppliers want to drive up the price point in developing countries.
The decorative coatings market is comprised of the interior, exterior, stains, clears and lacquers sub-segments, with the interior market dominating the sector accounting for a little more than half of the market share.
Decorative coatings ride on housing developments and business construction and growth has traditionally been driven by new construction, particularly in emerging markets where housing ownership and commercial developments are showing strong growth.
However, decorative coatings have not fared well in a number of developed markets. The bad economy has heightened concerns among paint makers that have been struggling with the slowdown in the housing sector for much of 2008. Analysts Coatings World spoke with said prospects for 2009 are not good.
Even before the current financial crisis, the steep drop in the housing markets, expecially in the U.S. due to the subprime mortgage mess, was severely affecting business in the paint and coatings industry.
Some analysts estimate the global architectural sector of the paints and coatings market has fallen by approximately 30% as a result. Under such deteriorating and volatile econcomic conditions it is hard to forecast where the market will end up at year's end. At best the market will be flat, but, most analysts expect a downturn in the architectural market during the next two years, due primarily to the economic crisis affecting all regions.
At the same time, the architectural markets in emerging regions such as China and India will continue to grow so expect the major firms with the infrastructure in place to continue to expand operations in these emerging markets while at the same time contracting, cutting back and consolidating in mature markets.
The architectural market is already heavily consolidated between a handful of large global companies. AkzoNobel through its acquisition of ICI, Sherwin-Williams and PPG are the three biggest paint makers in the architectural sector and command almost half of the global market, according to Chemark Consulting. At the same time only five paintmakers-Sherwin-Williams, AkzoNobel, PPG, Valspar and Benjamin Moore-own approximately 75% of the North American market, which is the largest in the world.
In addition to housing starts, sales of decorative coatings are also being heavily influenced by other factors. Trends towards DIY and home decorating are growing, led by media attention and by the expansion of DIY retail networks, such as Home Depot's extension in Mexico, and Praktiker and Castorama into Eastern Europe.
In the developed markets of North America and Western Europe, the highly competitive decorative coatings area is also being pressured by rising raw material prices and the erosion of profit margins due to the low price policies of the major DIY chains. In response, manufacturers have focused on innovative and higher value coatings, a factor which firms hope will help sales growth through these dark economic times.�
Green technology continues to grow
Green coatings technology is one area that is growing exponentially, due to increased VOC legislation at the government level and the trend toward healthier living and environmental awareness in popular culture.
The new Natura family from Benjamin Moore includes a primer plus three sheens-flat, eggshell and semi-gloss.
"To have received this award for Natura, barely months since we've introduced it, is an extraordinary honor that we at Benjamin Moore deeply appreciate," said Denis Abrams, president and CEO. "Throughout the company's 125-year history, we have strived to offer the consumer the finest paint possible but with a keen awareness to the health and safety of the environment in which we all live. It's a commitment that is ongoing and our development of new technologies and formulations is unending."
Natura is just now making its debut on the West Coast and in select regions such as the Rocky Mountain States and parts of the Deep South, and is expected to have full national distribution by March 2009. Unlike any other zero-VOC paints, Natura is available in thousands of hues and a wide range of sheens, according to the company.
The VOC level of Natura is unaffected by the addition of colorant because the paint is based on Benjamin Moore's patented waterborne colorant system. In fact, Natura is available in all of Benjamin Moore's nearly 3,500 colors, and it can be limitlessly color-matched to one's personalized color choice and still be zero-VOC. The Natura range includes a primer plus three sheens-flat, eggshell and semi-gloss.
AkzoNobel's new Ecosure line includes matt, gloss and undercoat varieties.
The Muralo Company has introduced NanoKote ceramic paint, designed to provide a mold and mildew resistant coating to interior surfaces. Guaranteed for 10 years, Muralo's NanoKote is a premium quality, high hiding waterborne ceramic paint. Its combined ceramic and nano built-in technologies offer a broad range of advantages, including a smooth film that is easy to wash and resistance to water marks and streaking.
NanoKote ceramic paint is designed to provide a mold and mildew resistant coating to interior surfaces.
Earlier this year Sherwin-Williams' Harmony Interior Latex coating became Greenguard Indoor Air Quality Certified as well as certified for Greenguard for Children & Schools by the Greenguard Environmental Institute (GEI). Tested according to the Greenguard Certification standards for low emitting products, Harmony Interior Latex was found to have minimal impact on indoor air quality and the environment. Sherwin-Williams voluntarily applied for the certification for its products. Testing will be administered on an ongoing quarterly and annual basis to ensure continued certification.