The marine, yacht and offshore coatings market was a mixed bag in 2009. While certain segments were soft, other areas, particularly newbuilding and offshore, offered growth opportunities.
Sherwin-Williams experienced growth in its offshore and petrochemical related business, with much of that tied to Brazil's investment in those markets, according to Rick McRae, global market director, marine, Sherwin-Williams Protective and Marine. "That really helped investment in the Gulf of Mexico and helped to propel that portion of the market," he said. "The newbuild activity in Asia in 2009 remained stable given the completion of previously announced vessels while the inland marine maintenance market remained steady throughout most of 2009. However, the newbuild market slowed primarily because it was difficult for owners to obtain financing. The government marine business was somewhat soft, mostly due to deferral of maintenance.
While it's a little too early to tell what 2010 will bring, Sherwin-Williams is seeing some projects that had been on hold moving forward, and existing projects that were going slowly have increased their pace. These indicators could lead to a positive outcome for the remainder of the year. The outlook for 2011 and after is less clear.
For International Paint, 2009 was another successful year, despite the company's first fall in revenue-six percent overall-for a number of years. "We experienced relatively healthy demand, particularly in China, the Middle East, India and other parts of Asia," said Jim Brown, marketing operations manager, worldwide marine, International Paint. "The weakness in some markets and in some geographies was offset by continued rising demand in marine newbuilding. But in the second half, revenue fell by approximately ten percent as the weakness in Europe and the Americas more than offset the growth elsewhere."
Looking ahead the newbuilding market will take time to readjust to lower levels of new vessel ordering," Brown said. "For International Paint, some volume loss may be compensated for by a larger active trading fleet needing maintenance products. With most major economies returning to positive growth, the market will experience a period of readjustment and a return to more sustainable levels probably beyond 2013. The maintenance outlook is forecast strong with growth throughout the next five years."
Paint demand last year was still in-line with expectations in the newbuild segment, primarily driven by the existing order book, according to Jacques de Coninck, director, PPG global marine coatings. "For the dry dock segment the number of inquiries was still healthy," he said. "Although slippage and even cancellations were commonplace throughout the year and still expected to continue in 2010, PPG was and will be less affected, thanks to a solid customer portfolio and strong customer relationships.
"The fleet is still growing at a steady pace and that fleet requires maintenance and upkeep," said de Coninck. "PPG Protective and Marine Coatings (PMC) distribution network aids in supplying the fleet and our products are well know and used in the industry."
Geographically, the Asia-Pacific region comprises the largest market for marine coatings. According to McRae, nearly 70 percent of the market is now in the Asia-Pacific region. "It used to be concentrated in Japan and then South Korea," said McRae. "In the last five years we've seen China and India gain momentum."
Cost and efficiencies are a major reason. Sherwin-Williams has addressed the market shift by adding manufacturing facilities in Asia as well as a dedicated Asia-Pacific team. "Two of our biggest advantages are our NACE-certified workforce, with more than 3,700 years combined experience, and our worldwide distribution network, with more than 4,500 company-owned distribution points around the world," said McRae.
"Demand depends by region, with the largest newbuilding demand in Asia-Pacific," said de Coninck. "We see maintenance and repair moving to Asia-Pacific although there is still a significant part of the owners residing in Europe. In North America, there is a growing demand in the inland market as more financing becomes available."
Raw Material Costs & Environmental Concerns
Rising raw material costs and environmental issues continue to effect the marine coatings market. One example of higher prices is copper, used in traditional underwater hull coatings. "Copper has doubled in price over the last year," said McRae. "That's made our new antifoulants, SeaGuard HMF heavy metal-free and Sher-Release, a cost-effective consideration for many customers, given the added fuel savings that both offer. Certainly our costs have increased but we've worked very hard to become more efficient to keep price increases as low as possible."
"The global economic crisis had a short term effect on raw materials, with a dip in commodity prices seen at the start of 2009," said Brown. "Commodity prices have since climbed back up to levels seen before the crisis, and the market remains volatile.
"Inflationary pressures have been present throughout the year and overall we have experienced a year on year increase in the cost of coatings manufacture," Brown continued. "As a company we strive to minimize price increases to our customers by employing various techniques such as forward purchasing of key commodities and benchmarking activities. As many of our customers have pricing contracts in place we have absorbed much of these increases ourselves, but have been forced to implement price increases across the market."
Environmental regulations and compliance continue to be a chief concern among marine coating manufacterers. Users of marine coatings are not only looking to comply with existing regulations, but they are taking a proactive approach and are adopting new technologies before they are mandated.
"We're seeing more openness to products that offer higher solids, low VOCs, and HAPs-free," McRae said. "Customers are telling us that they are important, even though they may not necessarily need them for compliance at this time. Customers see this as a benefit as part of their corporate stewardship and sustainability programs. Others are climbing onboard because they realize that this is the way of the future and they want to be ready for it."
Sherwin-Williams continues to add environmentally-friendly products such as SeaGuard HMF heavy metal-free antifouling hull coatings and Sher-Release silicone foulant release underwater hull coating system to its portfolio. Both of these weigh less than copper-based antifouling coatings and help achieve a smoother hull, which will result in fuel saving and a reduction in CO2 emissions, according to the company.
"Beyond environmental protection, there'sa savings to customers," McRae continued. "Using higher solids products means that they can use less product because these coatings typically provide better coverage. Using better quality products extends the life of an asset; they won't have to perform maintenance quite as often as these coatings tend to last longer.
"Another factor is rapid return to service-turning the job around faster than ever saves everyone time and money," McRai added. "Sherwin-Williams products such as Fast Clad ER require fewer coats and cure quickly to save material and labor costs-it can literally cure to walk-on condition in four hours, and that means a yard can deliver a ship or finish a tank faster than ever."
"There's no doubt that there's an increased environmental focus amongst our shipowner and shipyard clients and we hear the words 'sustainability' and 'corporate social responsibility' far more frequently," said Brown. "These issues are right at the top of company agendas and will drive future coatings developments. This will include less solvent, less biocides and a smaller range of raw materials for formulating chemists to work from."
Many of International Paints' existing products are already especially designed to assist its customers' environmental initiatives. Interplate Zero for example is a water-based newbuilding shop primer which has zero VOC.
"The coatings industry is heavily regulated and we're controlled in many ways," said Brown. "In Europe for example, REACH is a new regulation on chemicals and their safe use. It deals with the Registration, Evaluation, Authorization and Restriction of Chemicals which for us means we can only use registered raw materials in our coatings. The SED, Solvents Emissions Directive, regulates VOC emissions from facilities such as shipyards. This means we have to produce coatings which have less solvent or are water-based. We're also regulated by the BPD, the Biocidal Products Directive, where all biocides used in antifouling paints need to be evaluated and approved before they can legally be sold.
In the U.S. there are also a series of regulations governing the substances paint manufacturers can use in their products together with rules for VOCs and biocides.
"We are also now seeing new countries regulating in these areas such as Hong Kong where rules for VOCs are to be introduced," said Brown. "For our customers, there are two main areas of coatings legislation which have had a significant affect and I believe both have been beneficial. Firstly, the 'Control of Harmful Antifouling Systems on Ships,' where from January 1, 2003 an International Maritime Organization (IMO) convention established a ban on the application of TBT antifoulings on ships hulls and from January 1, 2008 an end to the presence of TBT on ships hulls. The convention entered into force on the 17th of September 17, 2008.
"Secondly, The SOLAS Performance Standard for Protective Coatings for dedicated seawater ballast tanks in all types of ships and double-side skin spaces of bulk carriers," Brown said. "Again I believe this is beneficial and welcome the introduction of a standard that will help increase the service life of coatings and ultimately crew and vessel safety."
New build will be subject to the IMO PSPC regulations and, in a few years from now, ballast water treatment systems must be installed onboard, according to de Coninck. "Our ballast tank coating systems are IMO PSPC compliant and we have significant experience in this field," he said. "In fact, the world's first IMO PSPC-compliant vessel was coated with our SigmaPrime 700 in its ballast tanks."
PPG PMC offers an extended product range that is certified under IMP PSPC and is available throughout the world. "The regulations are in place to safeguard people onboard, as well as the environment, and we see it as our obligation and responsibility to wholeheartedly support this regulation," de Coninck said. "Accordingly, our technical staff are fully aligned with the requirements. We will be glad to offer our expertise in advising yards and owners on this subject."
The marine market is constantly evolving as customers look for easier-to-apply and better products. "In addition, technological advancement and development of products that help to improve health and safety, and contribute to environmental care and energy efficiency is becoming increasingly important," said de Coninck. "As a conscientious, global organization we believe in responsible business growth, a principle that underpins all our commercial activities. So we're committed to operating in a manner that is protective of people and all environmental issues. Through our business and manufacturing practices, as well as our innovative products, we're focused on stewardship and conservation, which not only helps protect the environment, but also gives PPG Protective and Marine Coatings a competitive advantage in the marketplace."
PPG Protective and Marine Coatings has launched antifoulings that allow for extended laid-up periods, meet the latest IMO PSPC regulations for water ballast tanks and reduce the cost of onboard maintenance. "We obviously have to keep the market condition in view when developing or re-engineering our products," said de Coninck. "Product development usually requires thorough testing, which is not always in-line with the pace of changes in the market.
Looking medium- to long-term, factors such as fuel consumption, environmental footprint and hull performance will be key issues, particularly when the bunkering cost will rise again, according to de Coninck. "As a globally responsible organization we already have fouling release and antifouling coatings, such as the SigmaGlide product range and the Sigma SylAdvance 800," he said. "These coatings solutions reduce fuel consumption and carbon dioxide emissions as a result of the improved hydrodynamics of the ship's hull."
International Paint has introduced a new range of universal primers for the newbuilding market to address the productivity, regulatory, performance and commercial needs of shipyards and ship owners. "Ship builders and owners can now better choose how they meet productivity and performance targets and comply with the IMO's Performance Standard for Protective Coatings (PSPC) and new regional regulations limiting VOC emissions, such as the EU's Solvents Emissions Directive," said Brown. "While newbuilding shipyards all have different construction methods, build different vessels, are exposed to seasonal fluctuations in climatic conditions and are subject to global and local regulation, our new range of universal primers offers shipyards worldwide customized products to meet those different needs."
For the newbuilding shipyard the product range offers universal application, high volume solids with low VOC, year round workability with fast drying, low temperature cure and long overcoating intervals. For the ship owner the range provides long term asset protection with controlled through life maintenance costs, high performance corrosion and abrasion resistance and PSPC compliance.
International's Intershield 300 is an IMO PSPC compliant anticorrosive. This abrasion resistant, (>9%) aluminum pure epoxy coating can be applied to multiple vessel areas over mechanically prepared shop primer and offers long term asset protection and control of through life maintenance costs.
New Intershield 300HS, is a high solids version of the market leading technology which offers 78% volume solids, lower VOC and application direct from the can without thinning. With the aluminum content maintained >9%, Intershield 300HS will continue to deliver the same outstanding corrosion control the shipping industry has come to expect, according to Brown.
New Intergard 7600 is a light colored, pure epoxy universal primer providing good abrasion resistance. It offers excellent application properties, low temperature workability and true long term overcoating intervals with no requirement for surface roughening.
Intergard 787 is a high, 80% volume solids light colored aluminum pure epoxy coating with good corrosion protection and abrasion resistance. Intergard 787 can help meet the environmental challenge on VOC emissions and has an excellent track record in Korean newbuilding. Currently available in Korea. Intergard 5600 and Intergard 5620 complete the range. These light colored, epoxy universal primers have evolved from Intergard 403 and Intergard 423 technology. These products have excellent sprayability all year round and have proven long term anticorrosive performance with an extensive track record.
Sherwin-Williams has launched a number of new products for the marine coatings market. SeaGuard HMF is an ablative coating that utilizes a metal-free organic biocide agent and provides the same effective antifouling protection as traditional copper-based coatings. Because the antifouling agent has an extremely short hydrolytic half-life, it doesn't persist or accumulate in the marine environment and will not harm marine organisms. Sher-Release Silicone Fouling Release Coating System hull coating contains no heavy metals or biocides., combines epoxy anti-corrosive system and a tough, protective silicon surface coat interlocked by a unique elastomeric formula, provides steady, long-term performance less prone to mechanical damage than "softer" silicone systems and provides 6 to 10 percent fuel savings, reducing CO2 emissions.
Euronavy ES-301 epoxy is a solvent-free anticorrosive epoxy formulated for application over marginally prepared surfaces. It offers lower surface preparation costs and can be applied directly on damp surfaces. It's a durable, moisture- and surface-tolerant coating that allows customers to protect their steel assets against corrosion, even when it is applied in wet and cold conditions. It is engineered for ballast tanks, crude oil tanks, wet spaces, bilges, decks and external hull applications, provides outstanding durability and long-term performance, requires minimal surface preparation and is IMO PSPC approved to be applied over a zinc-free shop primer.
Sherwin-Williams' FastClad ER Epoxy is engineered for immersion service in sea water ballast tanks, fuel/sea water ballast tanks and petroleum storage tanks. It features rapid return to service designed to walk-on conditions within four hours, 24 hours for full immersion service, high build properties, greater than 70 percent edge retention and is low odor and low VOC.
Marine & Offshore Coatings Market
The marine coatings market reported growth opportunities in the offshore and petro-chemical segments in 2009. Marine coatings manufacturers are hopeful this momentum will continue to build in 2010.
By Kerry Pianoforte, Associate Editor