• Login
    • Join
  • FOLLOW:
  • Subscribe Free
    • Magazine
    • eNewsletter
    Checkout
    • Magazine
    • News
    • Research
    • Markets & Technologies
    • Raw Materials
    • Top Companies
    • Directories
    • Jobs
    • Events
    • Microsites
    • More
  • Magazine
  • News
  • Research
  • Markets & Technologies
  • Raw Materials
  • Top Companies
  • Directories
  • Jobs
  • Events
  • Microsites
  • Current / Back Issues
    Features
    Business Corner
    Editorial
    Digital Edition
    eNewsletter Archive
    Our Team
    Editorial Guidelines
    Subscribe Now
    Advertise Now
    World Reports
    eBook
    Top Features
    Powder Coatings Market

    Performance Enhancing Additives

    The Role Of Kilowatt Hours In Measuring Mill Performance

    The 2023 Marine Coatings Market

    PPG: Treated Silicas Enable Tire Manufacturing Energy Savings and Reduced Complexity
    Breaking News
    Online Exclusives
    Distributor News
    Financial News
    Paint & Coatings Manufacturer News
    People In the News
    Price Increases
    Product News
    Raw Materials & Equipment
    Video Bites
    Suppliers News
    Live From Shows
    Top News
    RPM Reports Record Fiscal 1Q 2024 Results

    Solid Growth for Jotun

    Dunn-Edwards Names ‘Skipping Stones’ 2024 Color of the Year

    PPG Partners with Prague Crafts Academy to Train Next Generation of Painters

    RPM Acquires Leading Panelized Wall Systems Business
    Top Companies report
    Market Research
    White Papers / Tech Papers
    Technical Papers
    Product Spec Sheets
    World Reports
    Adhesives and Sealants
    Aerospace Coatings
    Architectural Coatings
    Automotive Coatings
    Automotive Refinish
    Business Operation
    Color Trends & Forecast
    Construction Chemicals
    Corrosion Control
    Industrial Coatings
    Laboratory Equipment
    Marine Coatings
    Market Trends & Forecast
    Powder Coatings
    Production Equipment
    Radcure Coatings
    Special Purpose Coatings
    Wood Coatings
    "Green" Coatings

    Corrosion Control is Hardide Coatings’ Specialty

    Dunn-Edwards Names ‘Skipping Stones’ 2024 Color of the Year

    PPG Partners with Prague Crafts Academy to Train Next Generation of Painters

    GIT Names Kent Young to Board of Directors

    AkzoNobel’s Acquisition of Kansai Paint Decorative Coatings Prohibited in Three Africa Countries
    Additives
    Binders
    Pigments
    Solvents

    Coating Additives Market Worth $10.5B by 2028: MarketsandMarkets

    Micro Powders Showcases Natural, PTFE Alternative Additives at 2023 WCS

    OQ Chemicals Announces Price Increases for Oxo Intermediates

    BASF Broadens Monomers Portfolio, Launches Bio-based 2-Octyl Acrylate

    “MyCarbonFootprint”: BASF Launches Dashboard for Sustainable Procurement
    Company Capabilities
    Buyers Guide
    Distributor Guide
    Add New Company
    International Buyers Guide Companies
    Clariant Additives

    Siltech Corporation

    W. R. Grace & Co.

    Active Minerals

    Shepherd Color Company, The
    Industry Events
    Webinars
    Live From Show Event
    Top Events
    The Gulf Coatings Show

    Western Coatings Symposium 2023

    Pacific Coatings Show

    CHINACOAT 2023

    ABRAFATI 2023
    Companies
    White Papers/Tech Papers
    Product Spec Sheets
    Equipment
    Literature/Brochures
    Videos
    International Buyers Guide Companies
    Clariant Additives

    Siltech Corporation

    W. R. Grace & Co.

    Active Minerals

    Shepherd Color Company, The
    • Magazine
      • Current / Back Issues
      • Features
      • Editorial
      • Business Corner
      • Digital Edition
      • eNewsletter Archive
      • Editorial Guidelines
      • Subscribe Now
      • Advertise Now
    • Breaking News
    • Directories
      • Buyers Guide
      • Distributor Guide
      • Corporate Capabilities
      • Trade Associations
      • Add Your Company
    • Markets & Technologies
      • Adhesives and Sealants
      • Aerospace Coatings
      • Architectural Coatings
      • Automotive Coatings
      • Automotive Refinish
      • Business Operation
      • Color Trends & Forecast
      • Construction Chemicals
      • Corrosion Control
      • Industrial Coatings
      • Laboratory Equipment
      • Marine Coatings
      • Market Trends & Forecast
      • Powder Coatings
      • Production Equipment
      • Radcure Coatings
      • Special Purpose Coatings
      • Wood Coatings
      • "Green" Coatings
    • Raw Materials
      • Additives
      • Binders
      • Pigments
      • Solvents
    • World Reports
      • Africa Report
      • China Report
      • India/Asia Pacific Report
      • Europe Report
      • Latin America Report
      • Market Research
      • Russian Report
    • Top Companies
    • Online Exclusives
    • Glossary
    • Slideshows
    • Experts Opinions
    • Blog
    • eBook
    • Infographics
    • Videos
    • Podcasts
    • Whitepapers
    • Jobs
    • Microsites
      • Companies
      • White Papers/Tech Papers
      • Product Spec Sheets
      • Equipment
      • Literature/Brochures
      • Videos
    • Events
      • Industry Events
      • Live From Show Event
      • Webinars
    • About Us
      • About Us
      • Contact Us
      • Advertise With Us
      • Privacy Policy
      • Terms of Use
    Europe Reports

    Rising Raw Material Prices Could Spark Increased Consolidation for European Coatings Companies

    Increasing costs could squeeze margins in the coatings sector strengthening the trend toward more consolidation.

    Sean Milmo , European Correspondent03.31.17
    Coatings producers in Europe have been protesting vociferously about steep rises in raw material costs over the last few months as the region is threatened with a spate of inflation in the wake of oil price rises and currency fluctuations.

    The increasing costs could squeeze margins in the coatings sector strengthening the trend toward more consolidation in an effort to improve profitability.

    The specter of a period of inflation putting pressure on earnings could have been a factor behind the bid by PPG Industries of the U.S. to take over Dutch-based  AkzoNobel, the European market  leader in decorative paints with a strong position also in industrial coatings.

    In February AkzoNobel reported falling sales and profits in its fourth quarter and full year results. Its performance coatings sales dropped by 5 percent in the full year 2016 to €5.7 billion ( $ 6.2 billion) while its operating income fell 4 percent to €759 million.  Decorative coatings revenue decreased by 4 percent to €3.8 billion but its operating income went up 3 percent to €357 million with the help of costs controls.

    PPG’s €21 billion ($23 billion) unsolicited bid in early March was rejected by AkzoNobel’s management, which responded with an announcement that it would create value itself by spinning off its speciality chemicals business which accounts for around a  third of total turnover.

    Previous to PPG’s acquisition move AkzoNobel revealed that it was planning a set of comprehensive measures to   deal with higher raw material and other input costs.

    “We are likely to see higher year-over-year input costs in 2017 due to the inflationary environment,” Ton Büchner, AkzoNobel’s chief executive, told an annual results investors’ meeting. “We are taking appropriate measures to deal with higher raw material prices in an inflationary environment.”

    Coatings producers in Europe face the problem of how to put up prices to offset higher costs when demand in the region only matches, at best, a GDP growth rate of 1-2 percent. 

    Also, such is the structure of the supply chains for coatings raw materials in Europe that even a small rise in demand puts pressure on the availability of certain key chemicals causing quick movements in prices.  But customers will not consider the demand increase strong enough to warrant prices rises for coatings.

    AkzoNobel reported that in the fourth quarter of last year revenues from the price/mix for performance coatings  fell by 3 percent and for decorative paints by 2 percent.

    The surge in raw material costs is a test of the resilience of  coatings producers  because the rapidity of the price  rises has made it even more difficult to pass them on to customers.

    Throughout much of last year chemical prices, at least in Europe, were declining, particularly those for bulk petrochemicals which provide the building blocks for many of the chemicals used in coatings formulations.

    The Brussels-based European Chemical Industry Council (Cefic) issued figures in March (2016) showing that average prices of chemicals declined by 3 percent in January-November last year.

    However, since late 2016 a number of factors  have combined to trigger an  increase in raw material prices of unusual  rapidity.

    “Such price dynamics over such a short period have rarely been seen ( before), ” said Martin Engelmann, director-general of German Paint and Printing Ink Association (VdL), who estimates that the price rises will add  around € 200 million to the German coatings  industry’s costs.

    BASF, the German-based leading chemicals producer which is both a raw materials supplier and a coatings producer, estimated in February that basic chemicals prices were already 40 percent higher than a year ago while during 2016 they had dropped by 11 percent.  “The price rises will continue in the first and second quarters of this year,” Hans-Ulrich Engel, the company’s chief financial officer, told BASF’s annual press conference at Ludwigshafen, Germany.

    The big driver behind the increase has been the hike in oil prices which soared to a new high of over $50 per barrel in three months. This compared with $32  in early 2016  - an increase of 60 percent.

    Higher oil prices have precipitated increases in prices of intermediates and other petrochemical derivatives which have been aggravated by currency changes particularly a stronger U.S. dollar.

    In addition, in Europe and in China, which is a major supplier of organic pigments, there have been plant shutdowns caused by accidents and, in the case of China, a tightening of environmental regulations.

    Exchange rate changes have been particularly severe in countries like the UK where  a referendum vote in favor of leaving the European Union in mid-2016 led to a 15-20 percent drop in the value of   the  pound  against  the dollar  and around 12 percent against  the euro.

    UK raw material prices generally increased by 21 percent in January this year to register the biggest rise in five years, according to the country’s Office for National Statistics (ONS).

    “These latest findings indicate a dramatic change, with the current rate of increase being five times greater than the 4.2 percent rise seen just 6 months ago back in July last year,” said Tom Bowtell, chief executive of British Coatings Federation (BCF).

    In the UK some of the biggest price increases have in solvents. The BCF’s most recent raw material prices survey for January 2017 show the three-monthly average prices for acetone going up 61 percent,  n-butyl acetate up 40 percent  and methyl isobutyl ketone (MIBK) 20 percent.

    In the eurozone which covers most of the EU’s 28 member states, the price rises have been less steep.  The VdL records a 6-percent rise since mid-2016 in Germany for  binders based on acrylic, epoxy or alkyd resins, a 12 percent increase for solvents and 20 percent for zinc dust.

    Similar price  rises have been reported in the neighbouring eurozone-member  Austria. “The chemical industry has to expect even more price increases on raw materials (with) further uncertainties and fluctuations,” said the Austrian Chemical Industry Association (FCIO), which represents coatings producers.

    Among the biggest prices rises have been those for titanium dioxide which accounts for a large proportion of most coatings companies raw material costs.  Since late last year in the eurozone countries TiO2 prices have gone up by over 15 percent while in the UK they have risen by 22 percent.

    Part of this increase was due to a fire in January stopping production at a TiO2  plant at  Pori, Finland, owned by Huntsman Corporation of  the U.S.  The incident could have a big impact on TiO2  prices in Europe throughout 2017.

    But TiO2 producers,  like suppliers of other important chemicals in coatings formulations, are also suffering from rises in their own raw material costs and are also determined to compensate for a period of low prices for their products. 

    The coatings industry could be facing a time when finding ways of combatting  rising raw material cost will be a big priority. 
    Related Searches
    • paint
    • environment
    • conference
    • china
    Suggested For You
    Axalta Updates Financial Guidance Axalta Updates Financial Guidance
    Paint Specialist Flügger Maintains Momentum in Q1 2021-22 Paint Specialist Flügger Maintains Momentum in Q1 2021-22
    BASF and CATL Sign Agreement to Accelerate the Achievement of Global Carbon Neutrality BASF and CATL Sign Agreement to Accelerate the Achievement of Global Carbon Neutrality
    OQ Chemicals Announces Sales Control on U.S.-produced Carboxylic Acids OQ Chemicals Announces Sales Control on U.S.-produced Carboxylic Acids
    PPG Provides Sales Update and Reports Worsening Supply Disruptions and Customer Parts Shortages PPG Provides Sales Update and Reports Worsening Supply Disruptions and Customer Parts Shortages
    hubergroup: Price Increase Due to Massive Rise in Raw Material and Transport Costs hubergroup: Price Increase Due to Massive Rise in Raw Material and Transport Costs
    Burgess Pigments Announces Price Increase Burgess Pigments Announces Price Increase
    Carlos Hernandez to Manage Orion Carbons’ NJ Lab Carlos Hernandez to Manage Orion Carbons’ NJ Lab
    Diamond Vogel Diamond Vogel
    PPG’s Harris, Nuzzio Earn STEP Ahead Awards From Manufacturing Institute PPG’s Harris, Nuzzio Earn STEP Ahead Awards From Manufacturing Institute
    Axalta Releases Second Quarter 2021 Results Axalta Releases Second Quarter 2021 Results
    RPM Reports Results for Fiscal 2021 Fourth Quarter, Full Year RPM Reports Results for Fiscal 2021 Fourth Quarter, Full Year
    WACKER Polymers to Raise Prices for Dispersions and Dispersible Powders in North America WACKER Polymers to Raise Prices for Dispersions and Dispersible Powders in North America
    AkzoNobel Grows Revenue 26%, Delivers €335 Million Adjusted Operating Income AkzoNobel Grows Revenue 26%, Delivers €335 Million Adjusted Operating Income
    Asian Paints Consolidated Revenues from Operations for the Quarter Increases 91.1% Asian Paints Consolidated Revenues from Operations for the Quarter Increases 91.1%

    Related Breaking News

    • Breaking News | Financial News | Market Trends & Forecast
      Axalta Updates Financial Guidance

      Axalta Updates Financial Guidance

      Axalta updates financial guidance to reflect ongoing impacts of customer supply chain shortages and raw material and logistics constraints.
      09.22.21

    • Breaking News | Financial News | Paint & Coatings Manufacturer News
      Paint Specialist Flügger Maintains Momentum in Q1 2021-22

      Paint Specialist Flügger Maintains Momentum in Q1 2021-22

      Sales were $766 million for the quarter, up 17% in the prior year period.
      09.21.21

    • Breaking News | Industry News
      BASF and CATL Sign Agreement to Accelerate the Achievement of Global Carbon Neutrality

      BASF and CATL Sign Agreement to Accelerate the Achievement of Global Carbon Neutrality

      The partnership supports both companies’ commitment to global carbon neutrality and CATL’s localization strategy in Europe.
      09.17.21


    • Additives | Breaking News | Price Increases
      OQ Chemicals Announces Sales Control on U.S.-produced Carboxylic Acids

      OQ Chemicals Announces Sales Control on U.S.-produced Carboxylic Acids

      OQ Chemicals will implement a global Sales Control program for all U.S.-produced Carboxylic Acid.
      09.13.21

    • Breaking News | Financial News
      PPG Provides Sales Update and Reports Worsening Supply Disruptions and Customer Parts Shortages

      PPG Provides Sales Update and Reports Worsening Supply Disruptions and Customer Parts Shortages

      PPG’s sales volumes are being impacted by the increasing disruptions in commodity supplies.
      09.07.21

    Loading, Please Wait..
    Trending
    • AkzoNobel’s Acquisition Of Kansai Paint Decorative Coatings Prohibited In Three Africa Countries
    • LANXESS’ Papadourakis Retires, New Leadership For Americas Operations
    • RPM Acquires Leading Panelized Wall Systems Business
    • Sherwin-Williams DesignHouse Releases Industrial Trend Report
    • Krylon Announces 2024 Color Of The Year: Bluebird
    Breaking News
    • RPM Reports Record Fiscal 1Q 2024 Results
    • Solid Growth for Jotun
    • Dunn-Edwards Names ‘Skipping Stones’ 2024 Color of the Year
    • PPG Partners with Prague Crafts Academy to Train Next Generation of Painters
    • RPM Acquires Leading Panelized Wall Systems Business
    View Breaking News >
    CURRENT ISSUE

    September 2023

    • Powder Coatings Market
    • Performance Enhancing Additives
    • The Role Of Kilowatt Hours In Measuring Mill Performance
    • View More >

    Cookies help us to provide you with an excellent service. By using our website, you declare yourself in agreement with our use of cookies.
    You can obtain detailed information about the use of cookies on our website by clicking on "More information”.

    • About Us
    • Privacy Policy
    • Terms And Conditions
    • Contact Us

    follow us

    Subscribe
    Nutraceuticals World

    Latest Breaking News From Nutraceuticals World

    Eriomin Associated with Improved Microbiota in People with Prediabetes
    BAPP Publishes Lab Guidance Document on Lavender Oil
    Bartek Provides Update on Construction of World's Largest Malic, Fumaric Acid Facility
    Coatings World

    Latest Breaking News From Coatings World

    RPM Reports Record Fiscal 1Q 2024 Results
    Solid Growth for Jotun
    Dunn-Edwards Names ‘Skipping Stones’ 2024 Color of the Year
    Medical Product Outsourcing

    Latest Breaking News From Medical Product Outsourcing

    Microsure Secures €38M Series B2 Funding for MUSA-3 Microsurgical Robot
    AMCR Institute Purchased by Headlands Research
    Paragonix Opens New Massachusetts Headquarters
    Contract Pharma

    Latest Breaking News From Contract Pharma

    Schreiner MediPharm to Introduce Freeze-Light-Protect Label
    Eisai Merges with KAN Research Institute
    FUJIFILM Diosynth Biotechnologies Names Maja Pedersen Chief Quality Officer
    Beauty Packaging

    Latest Breaking News From Beauty Packaging

    Mintel Reveals 5 Global Consumer Trends for 2024
    Hard Candy's 'Wednesday' Makeup Collection Debuts at Walmart
    Ho.Bag Corporate Acquires SR Packaging Consultants
    Happi

    Latest Breaking News From Happi

    R+Co Launches Professional Hair Color Line
    Hard Candy Partners with MGM for Addams Family's Wednesday Cosmetics Collection
    Argan Oil-Based Hair Care Formula from Influencer Lauren Perez Waltzer
    Ink World

    Latest Breaking News From Ink World

    Crown Holdings Completes Helvetia Packaging Acquisition
    MUTOH Releases ValueJet 628MP Multi-Purpose Printer
    Inkcups to Showcase Portfolio at PRINTING United 2023
    Label & Narrow Web

    Latest Breaking News From Label & Narrow Web

    DataLase achieves Grade A RecyClass certification
    ECO3 to make North America debut at PRINTING United Expo
    ProMach acquires Lofton Label & Packaging
    Nonwovens Industry

    Latest Breaking News From Nonwovens Industry

    Ahlstrom Launches Glass Fiber Tissue Line
    Conwed Refreshes Branding, Website
    Registration Opens for 2024 ACI Convention
    Orthopedic Design & Technology

    Latest Breaking News From Orthopedic Design & Technology

    Relievant's Intracept Procedure Granted Anthem Blue Cross and Blue Shield Coverage
    Study: Brain Exercise Helps with Knee Surgery Recovery
    Loci Ortho Completes Enrollment for THANKS Clinical Trial
    Printed Electronics Now

    Latest Breaking News From Printed Electronics Now

    ASSA ABLOY Acquires Inovadoor in Brazil
    Walmart CEO Doug McMillon to Keynote CES 2024
    JDI Launches Launch Large-Scale eLEAP Project in China

    Copyright © 2023 Rodman Media. All rights reserved. Use of this constitutes acceptance of our privacy policy The material on this site may not be reproduced, distributed, transmitted, or otherwise used, except with the prior written permission of Rodman Media.

    AD BLOCKER DETECTED

    Our website is made possible by displaying online advertisements to our visitors.
    Please consider supporting us by disabling your ad blocker.


    FREE SUBSCRIPTION Already a subscriber? Login