Paint and coatings manufacturers and suppliers are adjusting their strategies for Brazil, preparing for an expected recovery in the market after a four-year slide. Among strategies being employed are new direct investments, expanded service and laboratory networks and new formulations with enhanced performance characteristics.

This is the first part of a two-part story on strategies in the paint and coatings market in Brazil. A second part will be published in December, focusing on systems management, services and quality control.

Many of the paint makers and suppliers in the market gathered at the 2017 Abrafati trade show in Sao Paulo during early October.

Building on Investments

Among companies continuing new investments in Brazil is BASF, which is now producing some acrylics that are not manufactured anywhere else in Latin America, according to Valter Milani, the director of petrochemical sales for the company in Sao Paulo. In June 2016, BASF began operations of the first 2-ethylhexyl acrylate (2-EHA) plant in South America, in Guaratinguetá, Sao Paulo state.

BASF’s local manufacturing at other plants like the €500 million Camaçari Acrylic Complex helps reduce costs for its paint lines, like Suvinil, which launched a new product in September, Suvinil Limpeza Total, a washable acrylic-based paint. The company is also now helping paint formulators substitute imported ingredients with downstream customization, noted Milani.

CMC Milling do Brasil also has increased its production lines recently, boosting capacity by 40 percent to 200 metric tons per year, noted Jose Ricardo Giacobelli, the managing director of the company, in Campina Grande do Sul, Paraná state. The new capacity will help smaller paint formulators develop test products, he says.

And Chromaflo Technologies has made new investment in its Rio Claro, Sao Paulo, production facility, noted Luis Silva, a commercial director for the company in Barueri, Sao Paulo.

Rebuilding Logistics and Distribution

The reorganization of the distribution lines and logistics for ingredients and final product lines was also a common strategy identified at Abrafati. Angus Chemical, for example, has selected Univar to provide distribution services for its products in Brazil and the region, said Mauricio Nisiyama, the Latin America marketing manager for the company, in Sao Paulo. The new partnership will help Angus with new product formulations that may be targeted to price-sensitive customers, he noted.

Tailoring New Products

The offer of new products to the Brazilian market during its recovery is a basic strategy many companies are pursuing. Since the so-called standard quality of architectural paints and coatings has emerged as the fastest growing segment class, in place of premium products that grew fastest up to a few years ago, more companies are increasing the level of technologies employed in formulations.

Future demand for paints and coatings products in Brazil will be based largely on the environmental friendliness of the product and on its sustainable production, suggests Thiago Guimaraes, the business manager for Latin America at Hexio, in Sao Paulo. While these considerations are now a new trend in the country, they soon will become regulated requirements, he reckons. His company will be bringing more waterborne epoxy products to Brazil over the coming year, he said.

Chromaflo always introduces a new product each year and the latest trend in automotive refinish is highlighted, Silva said. Abrafati has predicted that the automotive refinish market will grow between 5 and 10 percent this year, unlike all other paint and coatings segments, predicted to grow no faster than 2 percent.

EMD Performance Materials also will be launching new colors for its automotive repainting customers in Brazil next year, including Meoxal Red, a Merck color, noted Shane Dreher, the director of marketing for the Americas, based in Philadelphia.