Asia Pacific Coatings Market

The largest geographic market for paint & coatings is Asia. It remains a strong, robust and diverse market for paint coatings products.  Despite the continued concern over the resurgence of the COVID-19 in some countries in the region and the lockdowns, Asia will be the fastest growing region in the world in 2021.  The major economies are growing this year. Nonetheless, some countries in Southeast Asia are in lockdown again, which is depressing paint demand. 

Market Size

The 2020 market size for the entire Asian paint & coatings market is estimated to be $70 billion US dollars and 24.5 billion liters. Like other regions, Decorative Coatings is the largest segment at 38% of the value of the segment. General Industrial (GI), Protective, Powder, and Industrial Wood are also large segments of the market. The accompanying chart provides the breakdown of the market by segment.

Breakdown by Region and Sub-region

Given that Asia is such a large and diverse continent, we further break down the market by six sub-regions. The chart below summarizes our market size estimates by region.

The table below breaks down the market further by region and decorative and industrial or non-decorative coatings. In this table, Industrial coatings would be larger than all other coatings besides decorative, and would include automotive OEM & refinish, protective & marine, wood, powder, general industrial, coil, packaging, and other transportation coatings.

Greater China: Greater China is by far the largest sub-region in Asia. It accounts for 61% of value and just over 50% of the volume of the Asian coatings market. Greater China includes mainland China, Taiwan, Hong Kong, and Macau. The Chinese market has withstood the COVID pandemic better than others and the economy overall has continued to grow. This year, the paint markets have been impacted by the raw material shortages and this has limited growth. Overall, we expect volume growth to be in the 3-5% range and value growth to be in 8-10% range. In 2022, we expect volume growth to be 4-6% and value growth to be in the 6-8% range.

Japan & Korea: Japan & Korea is a more mature market. As such, it does not grow as fast as the other sub-regional markets in Asia. But due to its market maturity, average selling prices and the quality levels are higher in Japan & Korea. In 2020, the paint & coatings market declined by 5-8% in these countries. We estimate that it rebounded this year by about 3% in volume and 8% value.

South Asia: South Asia includes India, Sri Lanka, Pakistan, Bangladesh, Nepal, and Afghanistan. India is the largest market in South Asia and accounts for about 75% of the South Asian paint and coatings market. India is now the fastest growing paint market in Asia. India did have a significant lockdown last year in Q2, but the paint market came back fast in Q3 and Q4 and into 2021. With the surge in virus cases in spring, some of the growth was reduced but the market seems to be rebounding again. We think that overall, the South Asian volume will be up close to 10% this year and value up in the 10-15% range or perhaps more. Decorative coatings will have a few percent higher growth rates than the market as a whole.

Central Asia: Central Asia is the smallest paint & coatings market in Asia at $1.2 billion. Central Asia includes countries like Kyrgyzstan, Kazakhstan, Tajikistan, Turkmenistan and Uzbekistan.

Despite being relatively small, these countries do offer some good opportunities especially in protective markets due to the oil & gas and mineral production in these countries. There was not as strong of a lockdown in 2020 in these countries and thus the economies did not contract as much as in other regions of the world, so the paint markets did not contract much. Since they did not contract as much, they are not rebounding as quickly as in other regions of the world. Overall, we expect the paint markets to grow by about 3-5% this year.

Southeast Asia: Indonesia, Malaysia, Vietnam, Thailand, Singapore, Philippines, Cambodia, Laos and Myanmar. Similar to South Asia, the economies and paint & coatings markets in these countries have been growing very fast. At the beginning of this year, we were expecting the paint market to grow in the range of 10-15%. However, the virus cases have grown, and Indonesia, Malaysia, Vietnam and Thailand have returned to lockdown and growth will be much more modest this year as a result. As of this writing, it is still difficult to understand the impact of the lockdowns this year, but we think that growth in the 4-6% level is expected.

Australia and New Zealand: These countries have paint markets similar to those in the United States and Europe. The decorative markets are a mix of DIY and professional and there is a mix of industrial coatings applications. As in the United States and Europe, the DIY decorative markets have been strong in these countries. Construction markets have also been strong with construction growth in the 10% range. Manufacturing has been up by about 5%.

Trends

We believe that many of the longer-range trends remain in place. Some of these include:
• South Asia and Southeast Asia remaining growth leaders, although this year, Southeast Asia may be lower due to the lockdowns.
• Continued increased interest in anti-microbial and anti-viral coatings
• The electric vehicle (EV) market continues to grow at strong rates in Asia and especially in China.
• Decorative markets in South Asia and Southeast Asia will grow at slightly faster rates than the overall markets.
• All the major multinational paint companies are active in the region. But there are also quite a few regional paint companies that are active and remain relatively strong in the region.

Conclusion

Overall, we expect that the Asian markets will continue to grow at fast rates. We expect that this trend will continue going forward. Given that the Asian market is the largest regional coatings market, any company participating in the global paint and coatings market cannot afford to ignore it. However, the market is diverse with many different regions and sub-regions and each with their own characteristics. This diversity makes the market challenging but it also creates many opportunities in individual markets like Vietnam, Indonesia, Bangladesh and India.