Coming off a very difficult 2009 when most coatings companies experienced reduced activity and lower profitability, 2010 became the year when the coatings industry recovered from the economic downturn across most markets and regions. For example, global automotive markets, which were some of the hardest hit during the recession, experienced increased production levels due to improved OEM auto builds as a result of higher demand, particularly in North America and Europe.
Automotive builds across the globe increased 22 percent, reflecting an improvement of 37 percent in North America and 20 percent in the rest of the world. The industry production forecast for 2011 projects a global increase of five percent, reflecting continued recovery in North America and continued growth in Asia Pacific.
Most paint companies posted positive sales growth over 2009. However full recovery to pre-recession levels is still likely a few years away. Still it is a very positive sign that overall profitability was restored in most companies and the industry is again preparing for growth outside the mature markets while also continuing to invest in the R&D pipeline.
One of the biggest stories of the year was the landmark deal between Walmart and AkzoNobel. The Dutch paint maker supplanted Sherwin-Williams as the primary paint supplier in the U.S. for the world’s largest retailer.
In other key news, after a year of bitter opposition, a competition watchdog recently approved Kansai Paint’s $260 million takeover bid of Freeworld Coatings, which is making its curtain call in this year’s report. The deal represents a significant push into the African continent for Japan’s largest paint and coatings maker.
Also gone from this year’s report is Australia’s Wattyl having been acquired by Valspar for $125 million. Under the deal, Wattyl, which began operations in 1915, handed over its 30 percent share of the domestic paints market to Valspar.
As high growth markets continue to redefine the dynamics of all manufacturing-based industries, domestic suppliers in these regions continue to gain prominence on the world stage. In this year’s report we say hello for the first time to several Chinese companies: Carpoly Chemical Group, Yips Chemical and Shanghai Coatings. Also, in Russia, joining fellow domestic paints producer Empils is Russian Coatings.
I’m sure we will see this list of Top Companies continue to grow as these high growth regions become increasingly important to the customers the coatings industry serves.
Also be sure to read this year’s State of the Industry report where the presidents and CEOs of some of the biggest players in the industry discuss the year under review as well as make predictions about the future direction the industry is headed. You don’t want to miss it!