The demand for maritime coatings in Latin America is solidly expanding on new oil and gas activity, on domestic shipyard investments and on general seaborne trade growth volumes. Out of a total $8.9 billion regional paint and coatings market, maritime coatings now represent 14 percent, or over $1.2 billion per year, according to a 2012 financial presentation by Sherwin-Williams, a leading maritime coatings player in the region.
Among international players in the Brazilian maritime coatings market, PPG’s Sigma Coatings is a leader, along with Akzo Nobel’s International Paint and Sherwin-Williams. Similarly, The Jotun Group, of Sandefjord, Norway, is constructing its first Brazilian factory at Itaipuaçu, in Rio De Janeiro state—also its first in Latin America—to better serve the growing maritime coatings market there.
Globally, new ship building is cooling, but low-cost, high-demand areas like China and Brazil are exceptions to the trend. And in the meantime, increased investments in coatings maintenance are rising. While the price of oil is keeping maritime vessel fuel costs relatively high, the demand for increased efficiency is helping to drive the demand for anti-fouling coatings in Latin America.
Within the region, Sherwin-Williams claims the number one maritime coatings market supplier position in Brazil, Chile and Mexico, along with third position in Ecuador and fifth position in Argentina, according to a presentation by Tim Knight, the president of S-W Latin America coatings, in May.
Among domestic investments in Brazilian shipbuilding is that of Sete Brasil, which plans to spend some $27 billion by 2020 to build deep-water drilling vessels for rent to Petroleos Brasileiros, the national oil company. Petrobras plans on spending $224 billion developing new deep-water oil reserves by 2015. There is currently a shortage of deep water equipment and labor in Brazil, which is driving up costs.
Among foreign investors in Brazil’s shipbuilding market, an estimated $142 million investment is bringing in Royal Boskalis Westminster N.V., of the Netherlands, for the construction of a new port terminal TX2 at the Açu Superport north of Rio de Janeiro state. The Açu Superport is the largest industrial port complex in Latin America. Similarly, Norway’s STX Europe will expand its shipbuilding capacity by setting up a new shipyard in Fortaleza, in Ceará state, in the northeast, at a cost of $100 million. And Singapore’s Keppel is building a second shipyard in the country to help fulfill some $5 billion worth of new vessel orders in Brazil.
According to Brazil’s national maritime industry association, Sindicato Nacional da Indústria da Construção e Reparação Naval e Offshore, or Sinaval, there are 11 new shipyards under construction in the country, which will raise the current number of 47 by roughly 25 pecent over the near term. Apart from nearly four-dozen vessels being built in the country now, Petrobras’ future demand includes 50 production platforms, 50 drill rigs, 130 oil tankers and 500 offshore supply vessels.
While maritime coatings imports currently provide 20 to 40 percent of the Brazilian maritime coatings demand, according to one Sinaval document, the country is considering local content rules that could reduce that share, prompting greater local coatings manufacturing invesments.