IRL has published a new edition of its title, “A Profile of the Russian Paint Industry,” which now contains data for 2009. The study points to Russia having a decorative paint market of 800,000 tons and an industrial coatings market of 510,000 tons. Future growth in the decorative sector will arise from general economic development and spending power. The industrial coatings sector will be busy recouping lost ground from 2009, which has hit the automotive and powder coatings sectors in particular.
Environmental awareness is one of the key drivers in the Russian decorative paint market, even in the absence of Russian legislation in this regard. There is a rising awareness in Russia of environmental, health and lifestyle factors. This awareness is contributing to an upsurge in the market for low-VOC paints. Throughout 2009, there has been more emphasis on low-quality paint and coatings, including the emergence of a super-economy sub-segment, which is likely to disappear as the decorative market picks up again from 2010 onward. The Russian decorative paint market divides fairly evenly between DIY and professional applications, which will be driven by a return to the middle market in the future.
One of the key long-term drivers for the Russian coatings market will be the arrival of the Winter Olympics in Sochi, Russia, in 2014. Construction and protective coatings demand associated with the structures for this event will be a strong point for the paint industry. However, industrial coatings segments associated with OEM applications are the parts of the market that have been hit hardest. To this end, the coming years are likely to witness regrowth in the automotive OEM and powder coatings sectors, which have been hit hard by a fall in consumer demand and hence production in their end-use markets.
IRL forecasts that the total Russian paint market should rise from a total of 1,310,000 tons in 2009 to 1,687,000 tons in 2014. It is the OEM-based segments that will represent the best growth opportunities as consumer spending starts to rise again.
The Russian paint and coatings sector faces an uphill battle in terms of its balance of trade. Although the continued ingress of Western paint makers into Russia is good for both markets and technology, the Russian paint industry is not able to compete effectively in international markets, and certainly not all that well in Europe. To this end, the steadily encroaching effects of REACH legislation are a threat to some Russian paint companies, but not, perhaps, the multinationals that are already there.