Dan Watson, Managing Director, Blairgowrie Associates LLC08.07.14
The Asia Pacific region is perhaps one of the most diverse areas on our planet. Not only is it comprised of numerous dissimilar countries but the myriad of cultures, language, religion and politics is mind boggling. There is also the sheer size of the region. The Asia Pacific region, as defined in this article, is an immense region, covering some 2.8 billion hectares of land area, or approximately 22 percent of the total global land area. Stretching from the borders of China-Mongolia with the NIS to the north to the southern tip of Australia and New Zealand to the south, this region covers the spectrum of conditions from northern temperate and boreal through the range of tropical and subtropical zones and back to temperate. From the high plateaus and mountains of Pakistan to the west and extending to the island countries of North Asia and the South Pacific, the Asia Pacific region incorporates conditions of moist tropical to arid and semi-arid desert. As would be expected by this huge geography, the human and social dimensions of the Asia Pacific region are equally diverse.
It’s fairly safe to assume that the Asia Pacific region presents an enormous challenge to the coating industry since this is a region where “one size” definitely doesn’t fit all. Depending on the segment, performance requirements by country differ significantly as does how the coating is actually applied. In the Southern part of the region (i.e. Australia/New Zealand) the architectural market demands a gloss coating. In addition, in the ANZ market there is a strong DIY (Do It Yourself) market whereas in most other countries in the region it’s a contractor applied market.
The Asia Pacific region is home to about 62 percent of the total global population (i.e., approximately 4.4 billion). China and India account for more than half of this regions total population. India is projected to pass China in population size in about 15 years, becoming the world’s most populous country with about 1.5 billion people.
The region represents the single largest growth opportunity for the coatings industry. In 2001 the region represented 27 percent of the global coating market compared to 33 percnt for the Americas and 36 percent for Europe. In 2010 the region represented 40 percent of the coatings market while the Americas share declined to 26 percent and Europe declined to 28 percent. This trend is expected to continue. Depending on how you define the composition of the region, the total Asia Pacific region coating market is estimated to be valued at over $62 billion with an annual growth rate estimated at 12-15 percent.
The charts on this page describe the coating market in Asia Pacific both by segment and by country.
Clearly, the largest revenue segment is architectural and the largest revenue coating market resides inside of China. Of course, as you might expect, actual segments vary in size and revenue depending on the country. Paint consumption in China in 2013 was three times that of 2003 and the Indian paint volume was about two and one-half times greater. Many of the smaller coating consumers in the region have also undergone significant growth. In contrast, coating consumption in Japan has declined and the South Korean volume is about the same.
China accounts for 55 percent of the region’s consumption in volume and 65 percent of the value. India is now the second-largest consumer in tons, with a 13 percent share, and is third in value, with 6 percent. Japan is second in value, comprising 11 percent of the total, but is expected to be displaced by India within the next two years. Korea is the fourth-largest consumer in both volume and value. These four countries took 84 percent of the region’s tons and 85 percent of the value. Indonesia, Thailand and Vietnam each consumes about 2-3 percent of the regional volume and are considered expanding markets. Australia, Taiwan and Singapore are mature outlets for coatings.
Nippon Paint (including Nipsea JVs), AkzoNobel, Kansai Paint, PPG and Asian Paints are the five largest suppliers of coatings in the Asia-Pacific region, and together they capture 28 percent of the coating sales in 2013. AkzoNobel and Nippon Paint are the leading architectural paint suppliers, with Asian Paints third. Dulux (Australia), Kansai Paint, Valspar and Berger Paint (India) are in the next tier of architectural paint suppliers. Kansai Paint and Nippon Paint are the largest industrial paint suppliers, each with about an 8 percent share. AkzoNobel and PPG are next in size and are followed by Jotun and KCC (Korea).
The changes that are happening in this market somewhat mirror the history of coatings in other parts of the globe. In essentially all markets the water-based coatings are gaining significant market share (especially in the architectural segments). In 2013 approximately 70 percent of the architectural market was comprised of water-based coatings. Water-based growth in the industrial segments has been slow but it is happening. Today about 10 percent of the industrial segment is water-based while 14 percent is powder. Clearly, solvent-based coatings are the largest group of products in the industrial market but that is changing driven by increasing environmental concerns, especially in heavily populated countries like China and India.
There are numerous drivers in place that will support the growth expectations for Asia Pacific. Perhaps the largest of which is infrastructure investment. Approximately 40 percent of future global infrastructure investment is slated for the Asia Pacific region. That investment strategy will provide the basis for an enormous amount of high value coatings.
Coating Trends For Asia Pacific
Historically, Asia Pacific has been a low cost, low performance expectation market, mostly served by solvent-based systems (Japan, Australia and New Zealand being the exception). However, with the emergence of the region’s primary countries (i.e., China, India, etc.) as a major participant in the global marketplace major changes have occurred. An area of potential growth that cuts across all coating segments in Asia Pacific involves “green coatings” (i.e. environment friendly systems). The green coatings manufacturing companies and research institutions are infusing high investment for the future advancements and technology of environment friendly and nonhazardous coatings. These investments are to create coatings with similar performance as compared to conventional VOC contained coatings. Asia Pacific is the largest region followed by North America and Europe. Countries such as China, India, Japan, Malaysia, Thailand, Indonesia, Vietnam and others are growing markets for green coatings. Major players in the green coatings industry include the same players that participate in conventional systems (i.e. AkzoNobel, PPG Industries, Henkel, Sherwin-Williams, Axalta, Valspar, BASF, Kansai and others).
Decorative Coatings In Asia Pacific
History shows that the decorative coating market owes its growth and sustainability to the construction and/or renovation of commercial/residential properties. Over the past few years we have seen a significant increase in such activities in China, India, Indonesia, etc. That activity has resulted in an increased demand for decorative coatings. Along with this increased demand has been the need to produce coatings that are more environmentally friendly (i.e. reduction of VOC, removal of lead based pigments, etc.) and provide improved performance characteristics (i.e. resistance to mold growth, dirt and loss of adhesion from various substrates, long term durability, etc.). To meet these demands companies such as Nippon and AkzoNobel established regionally based facilities to better understand the relationship between local raw materials, application techniques, substrate differences, etc. Over the past years most coating companies in Asia Pacific have been able to formulate environmental friendly paints. Water-based coatings dominate this particular segment.
The critical drivers for future growth include a growing ‘middle class’ in key Asia Pacific counties, which has fueled commercial and residential construction. In addition, as various countries in the region incorporate more green and sustainable construction this will be a positive driver for more decorative coatings.
Major coating producers in Asia Pacific are working on sustainable coatings (coatings that provide energy savings); functional or so called “smart coatings,” which will enhance mold and dirt resistance; more environmentally friendly coatings that are water borne, offer reduced VOC and are formaldehyde free.
The major threats to the future growth of this segment include: increased cost of essential raw materials; continued stagnation or decline in the global market which would negatively impact the growth of the regions ‘middle class.’
Marine Coatings In Asia Pacific
The Asia Pacific marine coatings market is expected to witness steady growth owing to the robust development of the shipbuilding and offshore engineering industries that are located in the region. It is estimated that marine coatings represent about 6 percent of the total coatings market in Asia Pacific. Generally speaking, ocean going ships are subject to harsh environments and the constant need for their maintenance and repair will be a significant driver to sustain market demand in the years to come. An analysis of the Asia Pacific marine coating market finds that the market earned revenues of$4.84 billion in 2012 and industry experts estimates this will reach $6.69 billion in 2016. However, the rising costs of the raw materials used in these coatings – mostly due to fluctuating crude oil prices as a result of political tensions in the Middle East – have heightened production expenditure and reduced manufacturers’ margins. Titanium dioxide, in particular, is a key raw material, and any increase in its price will directly affect consumer demand. Epoxy-based anticorrosive marine coatings are slated for high growth in Asia Pacific due to its favorable cost and enhanced performance. In the case of antifouling coatings, acrylates are preferred. Foul release technologies are expected to show gradual growth if the industry can develop improved coatings in copper- and tin-free antifouling systems. Oddly, the economic slowdown in Europe and North America that has led to a decline in sea trade and curbed marine coating sales has also led to the outsourcing of shipbuilding activities to countries such as China that provide cheap labor. Hence, Asia Pacific’s position as a hotspot for shipbuilding will remain intact, spurring the marine coatings market continued growth in the region. Although China, South Korea and Japan lead the ship building industry globally (i.e., 80 percnt share of the industry) new shipping hubs are appearing in Vietnam, Philippines and India. It is clear that Asia Pacific will retain a dominant position in ship building globally.
New innovations in the marine coating segment include glass flake epoxies that improve abrasion resistance; coatings focused on reducing drag which would result in increased fuel efficiency and more environmentally friendly systems (i.e., less toxic anti-fouling systems).
Protective Coatings In Asia Pacific
Protective coatings account for 12-14 percent of the total Asia Pacific coating market. China holds a resounding 78 percent market share in this particular segment. This trend is expected to continue for many years to come as this segment is tied closely with infrastructure investment and China is expected to see 40 percent of future global infrastructure investment. The projected high growth of industrial segments like energy and power, oil and gas and general manufacturing industries will ensue the continued growth of this segment. There are numerous companies involved with this segment (i.e. AkzoNobel, PPG, Asian Paint, Jotun, Hempel, etc.).
Historically, the performance needs of this segment have been met using solvent-based, two part epoxy systems (or similar systems). Coating manufacturers involved in this segment are working on producing systems that are water-based, have better functionality (i.e. performance) and are more environmentally friendly (i.e., reduced VOC). The Holy Grail for this segment would be environmentally friendly systems that can withstand extreme industrial conditions (exhibit great corrosion and abrasion resistance), have zero percent flame-spread fire retardant, provide waterproofing and abrasion protection along with steam/high pressure wash-down protection and can be applied in hot, cold, humid, dry environments.
Automotive Coating In Asia Pacific
Firmly on its mark with economic and environmental trends, the global automotive coatings industry is set to grow. Industry experts have projected that the automotive OEM coating market will grow from $8.7 billion in 2013 to $11.7 billion by 2018. Of course, this projection assumes a gradual improvement in the global economy. Should that not be the case then this projection will not be met.
The highest demand this year should come from China, the United States, Japan, Germany, India and South Korea. The highest five-year growth rate is expected in South Korea, India, the U.S., China, the UK and Mexico. Key players in the global market include PPG Industries (U.S.), BASF (Germany), Axalta Coating Systems/DuPont (U.S.), Kansai Paint (Japan) and Nippon Paint (Japan).
Changing demands in automobile and coatings technology, auto markets and regional economies have forced the auto paint industry to evolve. Today, it is aligned with environmental, technology, health and safety, and economic trends that will drive solid growth through 2018. Global automakers turned out 63 million passenger cars, 16.9 million light commercial vehicles and 4.1 million heavy commercial vehicles in 2012.
The Asia Oceania (Central and South Pacific) region is now the world’s largest automotive coatings market, with the highest revenues and regional compound annual growth rate (CAGR) estimated at 7.85 percent for the next five years. China leads this segment but other Asia Pacific countries are expected to show significant growth over the next few years.
Asia Oceania produces more vehicles than any other region – more than 47.2 million this past year alone, making it the most important market for the automotive coating industry. The strong regional presence of Nippon, Kansai and KCC Paints will definitely help to fuel the market growth for coatings in this region. Global players PPG Industries, BASF, Axalta Coating Systems (formerly DuPont) also have a presence in the region and are likely to influence demand. Some of these companies have chosen to set up joint ventures with local manufacturers.
Major Coating Suppliers Positioned In Asia Pacific
The coating suppliers present in Asia Pacific read like a “Who’s Who” listing of major movers and shakers in the global coating market. Based on the following listing of suppliers in each country, it would appear that AkzoNobel and Nippon Paint are the heavy hitters in this region. Both have presence and significant investments in all key countries and market segments.
A. Australia/New Zealand: Dulux & Valspar
B. China: Nippon Paint, AkzoNobel, Valspar
C. Hong Kong: AkzoNobel, Nippon Paint, Camel Paint
D. India: Asian Paint, Kansai
E. Indonesia: AkzoNobel, Nippon Paint, Mowilex
F. Japan: Nippon Paint, Kansai, Skk
G. Malaysia: AkzoNobel, Nippon Paint, Jotun
H. Philippines: Boysen, Charter Chemical, Dutch Boy
I. Singapore: AkzoNobel, Nippon Paint, Jotun
J. South Korea: Kcc, Samhwa, Dpi/Nooro
K. Taiwan: Yungchi, AkzoNobel, Kansai
L. Thailand: Toa, AkzoNobel, Nippon Paint
M. Vietnam: AkzoNobel, 4 Oranges, Nippon Paint
The presence and size/composition of the investment made by these global players in the Asia Pacific coatings market will make it extremely difficult for “new comers” to enter. In addition, over time, as this region continues to grow and become a more intergral part of the global marketplace the small, country centric coating companies will most likely lose out. A possible solution would be for these small companies to form alliances with the larger global players or perhaps consider becoming an acquisition target while they still have value in their local markets. Unfortunately, many of the domestic producers in some Asia Pacific countries have chosen to meet the threat posed by the larger global players through pursuance of a “volume oriented price war” strategy. Since these small players don’t have superior technology products to offset lost profit stemming from their chosen strategy we will see more and more of them simply dissapear over time.
The immediate focus for coating producers in the Asia Pacific will be to construct more cost competitive, environment friendly systems across all coatings segments that also offer performance such as heat resistance, dirt and mold resistance and improved adhesion to a variety of substrates.
Looking ahead, the Asia Pacific coatings market will require smart coatings – a coating that changes its properties in response to an environmental stimulus, sustainable coatings – products that protect the environment without sacrificing overall coatings performance and high performance coatings – coatings to make airplanes lighter, buildings cooler, cargo ships more fuel efficient, and wind turbines smoother and more aerodynamic. The Asia Pacific coatings market is no longer regarded as a low cost, low performance expectation market. It has truly become a dynamic force and leader in the total global coatings market.
It’s fairly safe to assume that the Asia Pacific region presents an enormous challenge to the coating industry since this is a region where “one size” definitely doesn’t fit all. Depending on the segment, performance requirements by country differ significantly as does how the coating is actually applied. In the Southern part of the region (i.e. Australia/New Zealand) the architectural market demands a gloss coating. In addition, in the ANZ market there is a strong DIY (Do It Yourself) market whereas in most other countries in the region it’s a contractor applied market.
The Asia Pacific region is home to about 62 percent of the total global population (i.e., approximately 4.4 billion). China and India account for more than half of this regions total population. India is projected to pass China in population size in about 15 years, becoming the world’s most populous country with about 1.5 billion people.
The region represents the single largest growth opportunity for the coatings industry. In 2001 the region represented 27 percent of the global coating market compared to 33 percnt for the Americas and 36 percent for Europe. In 2010 the region represented 40 percent of the coatings market while the Americas share declined to 26 percent and Europe declined to 28 percent. This trend is expected to continue. Depending on how you define the composition of the region, the total Asia Pacific region coating market is estimated to be valued at over $62 billion with an annual growth rate estimated at 12-15 percent.
The charts on this page describe the coating market in Asia Pacific both by segment and by country.
Clearly, the largest revenue segment is architectural and the largest revenue coating market resides inside of China. Of course, as you might expect, actual segments vary in size and revenue depending on the country. Paint consumption in China in 2013 was three times that of 2003 and the Indian paint volume was about two and one-half times greater. Many of the smaller coating consumers in the region have also undergone significant growth. In contrast, coating consumption in Japan has declined and the South Korean volume is about the same.
China accounts for 55 percent of the region’s consumption in volume and 65 percent of the value. India is now the second-largest consumer in tons, with a 13 percent share, and is third in value, with 6 percent. Japan is second in value, comprising 11 percent of the total, but is expected to be displaced by India within the next two years. Korea is the fourth-largest consumer in both volume and value. These four countries took 84 percent of the region’s tons and 85 percent of the value. Indonesia, Thailand and Vietnam each consumes about 2-3 percent of the regional volume and are considered expanding markets. Australia, Taiwan and Singapore are mature outlets for coatings.
Nippon Paint (including Nipsea JVs), AkzoNobel, Kansai Paint, PPG and Asian Paints are the five largest suppliers of coatings in the Asia-Pacific region, and together they capture 28 percent of the coating sales in 2013. AkzoNobel and Nippon Paint are the leading architectural paint suppliers, with Asian Paints third. Dulux (Australia), Kansai Paint, Valspar and Berger Paint (India) are in the next tier of architectural paint suppliers. Kansai Paint and Nippon Paint are the largest industrial paint suppliers, each with about an 8 percent share. AkzoNobel and PPG are next in size and are followed by Jotun and KCC (Korea).
The changes that are happening in this market somewhat mirror the history of coatings in other parts of the globe. In essentially all markets the water-based coatings are gaining significant market share (especially in the architectural segments). In 2013 approximately 70 percent of the architectural market was comprised of water-based coatings. Water-based growth in the industrial segments has been slow but it is happening. Today about 10 percent of the industrial segment is water-based while 14 percent is powder. Clearly, solvent-based coatings are the largest group of products in the industrial market but that is changing driven by increasing environmental concerns, especially in heavily populated countries like China and India.
There are numerous drivers in place that will support the growth expectations for Asia Pacific. Perhaps the largest of which is infrastructure investment. Approximately 40 percent of future global infrastructure investment is slated for the Asia Pacific region. That investment strategy will provide the basis for an enormous amount of high value coatings.
Coating Trends For Asia Pacific
Historically, Asia Pacific has been a low cost, low performance expectation market, mostly served by solvent-based systems (Japan, Australia and New Zealand being the exception). However, with the emergence of the region’s primary countries (i.e., China, India, etc.) as a major participant in the global marketplace major changes have occurred. An area of potential growth that cuts across all coating segments in Asia Pacific involves “green coatings” (i.e. environment friendly systems). The green coatings manufacturing companies and research institutions are infusing high investment for the future advancements and technology of environment friendly and nonhazardous coatings. These investments are to create coatings with similar performance as compared to conventional VOC contained coatings. Asia Pacific is the largest region followed by North America and Europe. Countries such as China, India, Japan, Malaysia, Thailand, Indonesia, Vietnam and others are growing markets for green coatings. Major players in the green coatings industry include the same players that participate in conventional systems (i.e. AkzoNobel, PPG Industries, Henkel, Sherwin-Williams, Axalta, Valspar, BASF, Kansai and others).
Decorative Coatings In Asia Pacific
History shows that the decorative coating market owes its growth and sustainability to the construction and/or renovation of commercial/residential properties. Over the past few years we have seen a significant increase in such activities in China, India, Indonesia, etc. That activity has resulted in an increased demand for decorative coatings. Along with this increased demand has been the need to produce coatings that are more environmentally friendly (i.e. reduction of VOC, removal of lead based pigments, etc.) and provide improved performance characteristics (i.e. resistance to mold growth, dirt and loss of adhesion from various substrates, long term durability, etc.). To meet these demands companies such as Nippon and AkzoNobel established regionally based facilities to better understand the relationship between local raw materials, application techniques, substrate differences, etc. Over the past years most coating companies in Asia Pacific have been able to formulate environmental friendly paints. Water-based coatings dominate this particular segment.
The critical drivers for future growth include a growing ‘middle class’ in key Asia Pacific counties, which has fueled commercial and residential construction. In addition, as various countries in the region incorporate more green and sustainable construction this will be a positive driver for more decorative coatings.
Major coating producers in Asia Pacific are working on sustainable coatings (coatings that provide energy savings); functional or so called “smart coatings,” which will enhance mold and dirt resistance; more environmentally friendly coatings that are water borne, offer reduced VOC and are formaldehyde free.
The major threats to the future growth of this segment include: increased cost of essential raw materials; continued stagnation or decline in the global market which would negatively impact the growth of the regions ‘middle class.’
Marine Coatings In Asia Pacific
The Asia Pacific marine coatings market is expected to witness steady growth owing to the robust development of the shipbuilding and offshore engineering industries that are located in the region. It is estimated that marine coatings represent about 6 percent of the total coatings market in Asia Pacific. Generally speaking, ocean going ships are subject to harsh environments and the constant need for their maintenance and repair will be a significant driver to sustain market demand in the years to come. An analysis of the Asia Pacific marine coating market finds that the market earned revenues of$4.84 billion in 2012 and industry experts estimates this will reach $6.69 billion in 2016. However, the rising costs of the raw materials used in these coatings – mostly due to fluctuating crude oil prices as a result of political tensions in the Middle East – have heightened production expenditure and reduced manufacturers’ margins. Titanium dioxide, in particular, is a key raw material, and any increase in its price will directly affect consumer demand. Epoxy-based anticorrosive marine coatings are slated for high growth in Asia Pacific due to its favorable cost and enhanced performance. In the case of antifouling coatings, acrylates are preferred. Foul release technologies are expected to show gradual growth if the industry can develop improved coatings in copper- and tin-free antifouling systems. Oddly, the economic slowdown in Europe and North America that has led to a decline in sea trade and curbed marine coating sales has also led to the outsourcing of shipbuilding activities to countries such as China that provide cheap labor. Hence, Asia Pacific’s position as a hotspot for shipbuilding will remain intact, spurring the marine coatings market continued growth in the region. Although China, South Korea and Japan lead the ship building industry globally (i.e., 80 percnt share of the industry) new shipping hubs are appearing in Vietnam, Philippines and India. It is clear that Asia Pacific will retain a dominant position in ship building globally.
New innovations in the marine coating segment include glass flake epoxies that improve abrasion resistance; coatings focused on reducing drag which would result in increased fuel efficiency and more environmentally friendly systems (i.e., less toxic anti-fouling systems).
Protective Coatings In Asia Pacific
Protective coatings account for 12-14 percent of the total Asia Pacific coating market. China holds a resounding 78 percent market share in this particular segment. This trend is expected to continue for many years to come as this segment is tied closely with infrastructure investment and China is expected to see 40 percent of future global infrastructure investment. The projected high growth of industrial segments like energy and power, oil and gas and general manufacturing industries will ensue the continued growth of this segment. There are numerous companies involved with this segment (i.e. AkzoNobel, PPG, Asian Paint, Jotun, Hempel, etc.).
Historically, the performance needs of this segment have been met using solvent-based, two part epoxy systems (or similar systems). Coating manufacturers involved in this segment are working on producing systems that are water-based, have better functionality (i.e. performance) and are more environmentally friendly (i.e., reduced VOC). The Holy Grail for this segment would be environmentally friendly systems that can withstand extreme industrial conditions (exhibit great corrosion and abrasion resistance), have zero percent flame-spread fire retardant, provide waterproofing and abrasion protection along with steam/high pressure wash-down protection and can be applied in hot, cold, humid, dry environments.
Automotive Coating In Asia Pacific
Firmly on its mark with economic and environmental trends, the global automotive coatings industry is set to grow. Industry experts have projected that the automotive OEM coating market will grow from $8.7 billion in 2013 to $11.7 billion by 2018. Of course, this projection assumes a gradual improvement in the global economy. Should that not be the case then this projection will not be met.
The highest demand this year should come from China, the United States, Japan, Germany, India and South Korea. The highest five-year growth rate is expected in South Korea, India, the U.S., China, the UK and Mexico. Key players in the global market include PPG Industries (U.S.), BASF (Germany), Axalta Coating Systems/DuPont (U.S.), Kansai Paint (Japan) and Nippon Paint (Japan).
Changing demands in automobile and coatings technology, auto markets and regional economies have forced the auto paint industry to evolve. Today, it is aligned with environmental, technology, health and safety, and economic trends that will drive solid growth through 2018. Global automakers turned out 63 million passenger cars, 16.9 million light commercial vehicles and 4.1 million heavy commercial vehicles in 2012.
The Asia Oceania (Central and South Pacific) region is now the world’s largest automotive coatings market, with the highest revenues and regional compound annual growth rate (CAGR) estimated at 7.85 percent for the next five years. China leads this segment but other Asia Pacific countries are expected to show significant growth over the next few years.
Asia Oceania produces more vehicles than any other region – more than 47.2 million this past year alone, making it the most important market for the automotive coating industry. The strong regional presence of Nippon, Kansai and KCC Paints will definitely help to fuel the market growth for coatings in this region. Global players PPG Industries, BASF, Axalta Coating Systems (formerly DuPont) also have a presence in the region and are likely to influence demand. Some of these companies have chosen to set up joint ventures with local manufacturers.
Major Coating Suppliers Positioned In Asia Pacific
The coating suppliers present in Asia Pacific read like a “Who’s Who” listing of major movers and shakers in the global coating market. Based on the following listing of suppliers in each country, it would appear that AkzoNobel and Nippon Paint are the heavy hitters in this region. Both have presence and significant investments in all key countries and market segments.
A. Australia/New Zealand: Dulux & Valspar
B. China: Nippon Paint, AkzoNobel, Valspar
C. Hong Kong: AkzoNobel, Nippon Paint, Camel Paint
D. India: Asian Paint, Kansai
E. Indonesia: AkzoNobel, Nippon Paint, Mowilex
F. Japan: Nippon Paint, Kansai, Skk
G. Malaysia: AkzoNobel, Nippon Paint, Jotun
H. Philippines: Boysen, Charter Chemical, Dutch Boy
I. Singapore: AkzoNobel, Nippon Paint, Jotun
J. South Korea: Kcc, Samhwa, Dpi/Nooro
K. Taiwan: Yungchi, AkzoNobel, Kansai
L. Thailand: Toa, AkzoNobel, Nippon Paint
M. Vietnam: AkzoNobel, 4 Oranges, Nippon Paint
The presence and size/composition of the investment made by these global players in the Asia Pacific coatings market will make it extremely difficult for “new comers” to enter. In addition, over time, as this region continues to grow and become a more intergral part of the global marketplace the small, country centric coating companies will most likely lose out. A possible solution would be for these small companies to form alliances with the larger global players or perhaps consider becoming an acquisition target while they still have value in their local markets. Unfortunately, many of the domestic producers in some Asia Pacific countries have chosen to meet the threat posed by the larger global players through pursuance of a “volume oriented price war” strategy. Since these small players don’t have superior technology products to offset lost profit stemming from their chosen strategy we will see more and more of them simply dissapear over time.
The immediate focus for coating producers in the Asia Pacific will be to construct more cost competitive, environment friendly systems across all coatings segments that also offer performance such as heat resistance, dirt and mold resistance and improved adhesion to a variety of substrates.
Looking ahead, the Asia Pacific coatings market will require smart coatings – a coating that changes its properties in response to an environmental stimulus, sustainable coatings – products that protect the environment without sacrificing overall coatings performance and high performance coatings – coatings to make airplanes lighter, buildings cooler, cargo ships more fuel efficient, and wind turbines smoother and more aerodynamic. The Asia Pacific coatings market is no longer regarded as a low cost, low performance expectation market. It has truly become a dynamic force and leader in the total global coatings market.
