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    Features

    The Industrial Coatings Market

    The market for industrial and protective coatings has potential for growth in a number of key markets.

    The Industrial Coatings Market
    Photo courtesey of Hempel
    The Industrial Coatings Market
    Photo Courtesy of PPG Industries
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    Kerry Pianoforte, Editor06.08.16
    According to market research firm IRL, general industrial coatings is estimated to have reached almost 7.6 million metric tons in 2015, with sales expected to reach more than 8.9 million metric tons by 2020. In terms of value, global sales of general industrial coatings reached $23 billion in 2015. Asia accounted for the largest share of the market despite having a substantially lower average price compared to Western economies. Europe followed Asia closely in terms of the revenue generated, although with a substantially lower volume sold.

    According to IRL researchers, solvent-based coatings still account for the majority of the sales, although they have been losing share in favor of powder and water-based coatings. Most of the market value was generated by sales of general finish coatings, followed by coil and extrusion. Metal packaging and coil coatings had the highest average prices.

    2015

    “Global performance for the industrial coatings market was mixed last year,” said Shelley Bausch, PPG vice president, Global Industrial Coatings. “Results varied significantly geographically and across segments. We saw steady growth in the U.S. and Europe, but Brazil, the largest market in South America, was down significantly due to the continued economic and political challenges. 

    “China’s economic performance was affected by a slowdown in their construction market and a slowdown in exports,” Bausch added. “From a segment perspective, the oil and gas sectors were down globally, of course, and we saw continued challenges in the agricultural segment.  Agricultural equipment production was down more than 20 percent globally and this downturn has continued into 2016 market performance.  Slowdowns in these segments affect industrial coatings activities in heavy-duty equipment, transportation, and pipe and tubing.  Fortunately, the diversity and global nature of our business enabled us to have a good year despite some of these headwinds.  Automotive builds continued strong their strong performance in all geographies, and globally, coil and extrusion benefitted from low steel prices and increasing new builds.”

    AkzoNobel’s Protective Coatings business, which supplies anticorrosive and fire production coatings and services to industrial steel structures, including oil and gas, power generation, other industrial installations, and commercial buildings, reported that volume development has been positive overall, reflecting strength in several key markets, such as power. “However, that has been offset by lower capital spending in the global oil and gas industries,” said Kerstin Stranimaier, marketing director, Protective Coatings at AkzoNobel. “Power generation and downstream oil and gas markets are still growing, and there is particularly strong growth in the offshore wind power market, where AkzoNobel is the clear market leader. There is also strong demand for differentiated product and service offerings; in the oil and gas sector; we are helping our customers further extend asset life via proactive maintenance programs, including our Interplan tool.”

    Axalta considers industrial coatings a thriving market. “We made it our priority to launch a significant number of new products and customers programs in the segments we focused on over the past year,” said Michael Cash, senior vice president and president industrial coatings, Axalta Coating Systems. “This effort opened up a large amount of opportunity to increase our customer base.”
    According to Dave T. Zelch, global business director, metal and plastics, Product Finishes Division, The Sherwin-Williams Company, it was not a bullish year in terms of overall growth but he did see significant opportunities ahead, especially as customer footprint and their markets continue to expand globally. 

    The industrial coatings market has opportunities for growth in a number of segments including architectural, transportation, oil and gas and construction. 

    According to Bausch, although the automotive sector is cyclical, PPG sees continued strength and growth in that segment as builds continue to increase, particularly in parts of Europe, China, and India.  Over the next two years, PPG expects significant growth to come from segments that have been trending downward.  
      
    “We’re already seeing signs of recovery in the agricultural sector,” Bausch noted. “End equipment sales are starting to turn positive which is a leading indicator for the coatings industry.  Much like the oil situation, there is a large amount of inventory to work through before we will see a resulting uptick in production, but it will come, likely in late 2017, and the macro trends for the sector are positive. There’s also good news in the construction segment. China reported its first uptick in commercial new construction last month (April), and we’re seeing moderate growth continue in the U.S. and Europe. Those are all positive indicators for coatings segments such as coil, extrusion, appliances, and heavy duty equipment.”

     “The outlook for the energy, construction and transportation segments is very favorable,” said Zelch. “Accelerating demand for traditional and renewable energy infrastructure in the developing world, combined with an aging infrastructure in the developed world, makes that a stable and continuous growth market for us. While economic indicators for agriculture and construction equipment (ACE) remain soft, this customer base looks for an extended product lifecycle, giving us the opportunity to innovate and grow that base. Our strategic focus on underbody/underhood in the truck and bus segment also has a very positive outlook due to the need for longer lifecycles and higher performance coatings.”

    “With construction on the upswing, there is noticeable opportunity in the architectural segment,” noted Cash. “In line with this, we’ve had success in this segment with our global approach, new products and new warranties. Our extensive Alesta, Abcite and Nap-Gard powder products along with AquaEC electrocoats, Ganicin primers and Voltatex Energy Solutions liquid coatings meet different niches around the world.  At Axalta, we feel that all of the segments are positioned well for growth due to the global need and prioritization of new technology and innovation. There is global demand for more efficiency, corrosion protection, durability and overall support in helping our customers meet the specific needs of their customers. We see this as opportunity across all of our Industrial end user segments.”

    According to Klaus Møller, group vice president, Group Protective Marketing at Hempel, globally, the market for Protective coatings has been impacted significantly by the slowdown in the oil industry,  where a significant number of projects requiring protective coatings have been cancelled and very limited new projects are put on stream. “Most other key segments within civil construction, power generation and industrial manufacturing remain more or less in the same shape as in previous years. Civil construction and infrastructure probably represent the biggest market potential within the protective segment.”

    Meeting the needs of customers

    Industrial coatings customers prize durability and cost effectiveness.

    Two of the major performance trends PPG is seeing are demands for increased corrosion-resistance and more advanced coatings that have the versatility and robustness to perform well on complex substrates.  That means surfaces made with multiple mixed metals, plastics and other materials, or those processed with differing pretreatment regimens. 

    “Another key need is for robust products that are available globally,” said Bausch. “As our customers operate coatings lines in different parts of the world and as they outsource their activities, we need to develop and supply products that produce consistent quality and color regardless of their line conditions – whether their lines are in warm, humid climates or in cold, dry climates … or even in different environmental conditions as their plants change throughout the day.”

    Bausch noted that meeting the demand for customers who want to make their own products more sustainable is also importat. “That could mean more reflective cool roof coatings for the building industry or better high-performance primers that help automakers use lighter-gauge metals for fuel-efficiency. Overall, the push internally and from our customers is for better durability, enhanced surface functionality, more environmentally advanced coatings and on-going innovations in design and color.”

    “Customers are looking for more sustainable and durable protection from their coatings and fire protection systems, as well as better color retention and chemical resistance,” said Stranimaier. “We are placing increased emphasis on working with our customers to understand their needs, whether it is for new projects, OEM or maintenance and repair.”  

    According to Cash, the Axalta customer is looking for a competitive edge through new innovative colors, improved performance and comprehensive support. “They’re looking for a partner rather than a supplier, so service and customer support are key,” he added. “As a paint company with 150 years of experience, it’s our mission to understand our customer’s products, and their customers, as well as they do. We are driven to surpass their expectations aesthetically and functionally.”

    “Protective coatings applicators continue to look for ease when using coatings as well as productivity in their workflows to save time and labor, while limiting environmental impact,” said Møller. “The coatings must support this in order to create value for our customer. The end users that will own and operate the assets which have been coated, look for long-lasting asset protection that will limit total cost of ownership and operation. This means coatings that last as long as possible before repairs and maintenance are needed; hence, reducing direct maintenance cost and interruptions that result in expensive downtime of their operations.” 

    Making the switch to water

    Although solventborne coatings are still widely used in the industrial sector, as environmental regulations become increasingly stringent throughout the world, more users are looking for alternatives.

    “We are seeing a shift in demand towards higher-solids and waterborne products across the world, and particularly in China and India where environmental legislation is tightening,” said Stranimaier. “The challenge is to ensuring we can offer right balance of product and environmental performance.” 

    Axalta reports that it remains conscious that the global market has specific application needs and requirements. “We make it a priority to offer a wide-range of environmentally-conscious products, from powder coatings with zero VOCs and targeted HAPs to leading edge AquaEC waterborne coatings to ultra-high solids solventborne coatings – our intention is to offer an environmentally-friendly product portfolio that meets every customer’s need,” said Cash.

    Sherwin-Williams views this global shift from solvent- to water-based coatings as an opportunity for growth. “For those of us who have mastered the complexities of managing technologies globally, these pressures actually present valuable opportunities for bringing innovations to market,” said Zelch. “Although we are a global company, global regulation is not universal, so reinvention and being in position for what’s next are constants. We broaden the definition of “environmental” to address not only curbing emissions, but also managing raw materials around the trend to restrict the use of materials deemed too hazardous for use in and on products, particularly consumer electronics and biomedical applications.” 

    Environmental legislation continues to push innovation in the coatings industry, yet even in the absence of such influences, PPG noted it would be pursuing these developments based on its own corporate-wide commitment to sustainability.

    “From a customer standpoint, one of the things that sets PPG apart is the ability to leverage our expertise across all technology platforms  to help OEMs and their suppliers find the right solutions to any challenge, whether they’re related to environmental compliance, manufacturing or product performance,” said Bausch. “And based on our capabilities, we take a multi-faceted approach to this challenge. First, we still believe strongly in the viability of liquid coatings at PPG. That’s why we’re continuing to invest in the development of high-solid low-VOC formulations that will enhance the sustainability of liquid coatings for generations to come.”

    “Where we have the opportunity to best meet our customers’ performance and application needs with waterborne coatings, we are using our PPG waterborne technology platform to offer product solutions,” Bausch continued.  “In both coil and in some electronics applications, this is moving quickly. In developing regions, where we and our customers are not constrained by current application lines, powder coatings offer another substitute to solvent-based coatings.  We are seeing this as a strong trend in Southeast Asia.  And finally, E-Coat technology is also an alternative to the challenges of solvent-based coatings.  Obviously this depends on the segment, the substrate, and the design of the parts to be coated, but we are finding applications that historically have not used e-coat, such as pipe or containers, are now interested and working with us to develop and execute a change to this technology. “

    New Products

    AkzoNobel recently launched a range of Chartek fire protection coatings for the oil and gas sector that offer self-reinforced fire protection. This provides weight-savings advantages coupled with faster application. 

    Axalta Coating Systems recently launched AquaEC 6100 electrocoat coatings designed to improve customer’s productivity and reduce application costs. “The AquaEC range of electrocoat primers use patented epoxy-based technology to provide superior corrosion resistance with excellent throw power and improved edge protection,” said Cash. “This tin-free technology used in AquaEC 6100, now available globally, also helps meet environmental goals. The U.S.-made AquaEC 6100 E-Coat also received Caterpillar approval to their specification 1E2732F.

    Towards the end of last year, we introduced a non-acidic and formaldehyde-free Voltatex electrical steel varnish formulated to reduce costly shutdown periods during maintenance inspections, increasing our customer’s efficiency. In the architectural segment we’ve experienced great success in the launch of our Alesta Anti-Graffiti outdoor powder coatings, where our customers experienced outstanding exterior durability due to the excellent chemical resistance, UV weathering and film hardness of the coating. Its weather and chemical resistance makes it an ideal protective coating for finishes exposed to graffiti as well as extreme conditions such as dirt and smog. Axalta is also pleased to announce the release of the Nap-Gard 7-2500 series, which brings industry recognized FBE powder coatings into one group and expands the benefits of our thermosetting epoxy powder for onshore and offshore oil and gas pipelines.”

    Sherwin-Williasm recently launched KEM NISO 8510 system, a high-durability isocyanate-free topcoat system with an ambient cure of 15 minutes and Polane D 8700 coating, which provides the high durability of a urethane in a single direct-to-metal step. “Our newest powder offering is our patent pending introduction of the Powdura OneCuresystem, a two-coat powder system, applied in a single bake cycle, allowing for the combination of multiple chemistry layers. This allows finishers to reduce energy use, labor and maintenance costs while increasing throughput,” Zelch noted.

    Hempel recently launched Hempadur 4774D, a product for the wind power industry. “Hempadur 4774D allows wind tower manufacturers to reduce their coating schemes from three to two layers, hence reducing throughput time in their manufacturing process, while maintaining excellent corrosion protection properties,” said Møller.

    “Hempel is also redefining anti-corrosion with the continuing expansion of our Avantguard range of protective zinc epoxy primers,” Møller added. “Based on activated zinc technology, our patented Hempadur Avantguard coatings have been proven to deliver significantly higher galvanic corrosion protection than zinc epoxies without activated zinc technology. The unique formulation also enhances the coatings’ mechanical strength and offers greater working tolerances, to set a new standard for protection in tough C4 and C5 corrosive conditions.”

    PPG has several  new products in the pipeline. 

    DRAGONHIDE  ZRE primer is a zinc-rich primer for the automotive market with a proprietary “self-healing” technology that makes underbody parts for cars more corrosion- and impact-resistant.

    There are also SPECTRACRO SPU conductive and non-conductive urethane primers.  These are the first liquid primers that can be applied over multiple plastic substrates, including METTON-type and sheet-molded composite plastics. “That fulfills one of the goals I mentioned earlier, which is to help customers streamline their quality control and production process,” said Bausch. “Last year, we launched POWERCRON ADVANTEDGE electrocoat, featuring a heavy-metal-free catalyst technology. This product was originally formulated to help the customer achieve REACH compliance in Europe, but now that it is out in the field, we’re realizing that it is helping them to achieve some other amazing environmental benefits as well. We’ll be announcing more about that soon.”

    In Southeast Asia, PPG recently launched a new waterborne coil coating technology in the building and construction segment.  “The development of this product line was in collaboration with a key customer and resulted in a differentiated, environmentally friendly solution with increased throughput and productivity on line,” said Bausch. “In addition, collaboration with the customer on this innovation accelerated the product development time significantly. In the electronic materials market, we launched VELVECRON SR (stain-resistant) coating, a clear two-component urethane topcoat. Based on proprietary PPG resin and coatings technologies, Velvecron SR coating is designed to unite a soft, luxurious feel with unparalleled stain resistance for plastic and mixed-material finishes.  Although this product was developed initially for electronic materials, we expect to leverage this technology across other segments that value stain-resistance, such as athletic equipment, appliances, automotive parts and accessories, game consoles, furniture, display products and more.” 
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