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    Features

    Resins Market Update

    Resins suppliers reported market growth in 2017

    Related CONTENT
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    • Raw Material Suppliers, Distributors Part of Recent M&A Activity
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    Anthony Locicero, Associate Editor04.09.18
    The coating resins market was valued at $29.03 billion in 2015 and is projected to reach $38.15 billion by 2020 – increasing at a CAGR of 5.61 percent between 2015-2020, according to research by MarketsandMarkets.

    MarketsandMarkets sees a rise in the global market “primarily triggered by the economic growth in developing countries, growth in end-use industries, increasing investment in infrastructure, stringent environmental regulations, and increasing purchasing power.”

    On the other hand, the automotive industry’s demand for coatings resins is driving the global market, according to Transparency Market Research’s “Coating Resins Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2014 – 2020.”

    This all coincides with a projected growth of the paint and coatings market, which MarketsandMarkets expects to jump from $160.54 billion in 2017 to $209.36 billion by 2022 (at a 5.4 percecnt CAGR). Included in those numbers are the resins being produced:

    •  Polyurethanes; •  Acrylics; •  Polyesters;
    •  Epoxy; •  Alkyd; •  Others

    Epoxy is the largest segment of protective coating resins, per MarketsandMarkets.

    “The growing popularity of various types of protective coating resins such as alkyd, acrylics, epoxy, polyurethane and polyester in various end-use applications plays a significant role in driving the market,” the research stated. “Epoxy protective coating resins accounted for the maximum share, in terms of value, of the overall market due to its excellent customizability and easy to apply and remove properties.”

    Christa Norielle of Umicore said the company observed a consolidating market for solvent alkyds, but a growing market for alkyd emulsions.
    The largest segment inside the market is industrial application, according to MarketsandMarkets.

    Growth in 2017

    “The resin market generally follows the macro trends of the paint producers and the overall GDP movement. The resin market grew slightly with the overall GDP growth seen in 2017,” said Matthew Hayden, applications manager, Polynt. “There was growth in many of the main sectors using paints. The architectural market grew slightly more than the industrial and automotive in 2017, but each major market experienced growth. Improving domestic and global economies are the main drivers.”

    “Sun Chemical Advanced Materials saw growth in the global resins market in 2017, especially in sales of UV-curable, waterborne and powder coating resins,” said Michael T. Venturini, marketing director, Coatings, at Sun. “...Trends are dictated both by legislation and end consumers in the marketplace that focus on technical service, quality, performance and environmental considerations.”

    “As predicted, we saw the market strengthen in 2017 – growth we expect to continue in the coming year. In North America, housing and industrial coatings spurred market growth while Europe and Asia remained steady,” added Eric Dumain, North America commercial director for Arkema Coating Resins. “One area where we are seeing significant potential is in India [Arkema will be opening a new polyester powder resins unit in Mumbai this year] and the surrounding region. In powder coatings specifically, we are anticipating the market will potentially double in the next few years.”

    Some of the growth can be attributed to construction, according to Specialty Polymer Inc.’s President Sheryl Southwell.

    “If you travel to any major city in the U.S. and Canada, chances are you’ll see cranes everywhere,” Southwell observed.

    Customer demands

    Cost is a demand, however it is “always relative to performance benefits,” allnex’s Global Marketing Manager Robert Skarvan said.

    “Customers continue to look for improved cost/performance balance, which can be measured in a variety of ways, including: cost as applied; reduced waste/improved transfer; improved substrate protection (fewer or thinner layers); increased interval between recoating jobs (longer service life); and total cost of ownership,” said Ann Frederix, senior vice president, Epoxy Specialties at Hexion.

    There is rising demand for high performance and environmentally friendly protective coatings, which is expected to drive the market for this segment, per MarketsandMarkets.

    “There is always a need for low VOCs, followed by durability and technical innovation. The robustness of new binder systems is especially essential for the market,” said Markus Hallack, head of Silicone Resin Technology at Evonik.

    “Environmental regulations and social change for sustainable raw materials with less environmental impact are driving rapid change and innovation in all segments of the coatings market,” Venturini said. “The trend continues to move forward in Europe and the U.S., but is quickly growing in Asia driven by China’s regulations for improved air quality and reduced VOC emissions.”

    “This has required paint producers to transition to powder, waterborne or other low-VOC technologies,” Venturini added. “We will also work with DIC to provide resins with unique performance properties that are tailored specially for the end user’s application, such as: One pack primers for adhesion to polypropylene and TPO that allow for lightweighting and recyclability of automotive parts.”

    “Customers continue to look to the resin suppliers to create lower VOC to no VOC products with similar performance to conventional resins,” Hayden said. “Customers also continue the trend of maintaining their own raw material inventories at efficient levels, so the resins suppliers are asked to make just in time deliveries, deliver with shorter lead times in some cases, consider consignment stock, and maintain finished goods with minimum stock levels at our facilities. Some raw materials used in resin and paint formulations are also under more health and safety reviews from domestic and global bodies. The resin suppliers have been asked to proactively work on new resin formulas with similar performance using alternative raw materials in these cases.”

    Arkema has observed customer and supplier collaboration.

    “In the past few years, we have seen a move toward greater collaboration between the resin supplier and customers,” Dumain said. “By building stronger relationships, coating formulators and suppliers potentially get new technologies and products to market faster and more efficiently. That is particularly important as the demand for coatings grows worldwide. Customers see the value of those stronger relationships and, as a result, expect more from their relationship with us.

    “Due to that emphasis on stronger ties, the customer’s priorities and those of the resin supplier overlap more than they ever have,” Dumain added. “It is in everyone’s best interest to leverage new technology and infrastructure growth to directly address ongoing needs for greater balance between performance, cost, sustainability and quality.”

    Perstorp is a producer of building blocks for different types of resins. In addition to receiving requests for bio-based building blocks, “We also see a strong requirement on security of supply as well as a strive towards lower cost,” Corporate Communications Manager Malin Johansson said. “Innovation is also high up on the agendas, customers are looking to differentiate their portfolios by offering new innovative solutions.”

    Performance is also key.

    “Customers have been placing more emphasis on performance, especially in those applications requiring a customized solution,” Southwell said. “Customers are looking for more technical support and testing designed around their specific application.”

    “Our customers are also looking for us to either find alternatives or reduce the use of certain monomers in our resins to comply with the changes for sales into the European Union subject to REACh,” said Robert Schlager, account manager for Coatings, Georgia-Pacific Chemicals LLC. “However, customers don’t want these attributes to affect performance. We work closely with our customers to respond to their demands and needs for their specific applications.”

    From the consultant’s side, lower costs are important for the “so-called commodity resins,” according to CHEMARK Consulting Group President Phil Phillips.

    “But [just] as important is greater inventory for shorter term deliveries,” he said. “Thus, the formulators are reducing their inventory costs while pushing this burden back on the resin suppliers.

    “Additionally, within the specialty resins offerings, formulators are increasing their demand on the suppliers to innovate and bring forth improved ‘backbone’ resin performance in concert with formulators guidance,” Phillips concluded.

    Balancing demands with rising costs

    Hexion “continues to invest in research and development to deliver on improving cost-performance” as well as “Six Sigma and Manufacturing Excellence programs,” Frederix said.

    Georgia-Pacific “uses its Market Based Management – aka MBM – decision-making framework to help identify those activities where we believe we bring a competitive advantage,” Schlager said. “In focusing on these activities, we find that we can bring the greatest value to both our customers and our company in any cost environment.”
    Hayden highlighted what he sees as the benefits of the Polynt/Reichhold merger.

    “It has integrated two large resin suppliers to the industry,” he said. “More than just looking for synergies, our strategy is match every one of our customer locations with the closest resin manufacturing plant in order to make logistics costs more efficient and meet tighter delivery windows. We also have ongoing research and engineering projects to improve manufacturing cycle times. We are also expanding the number of qualified global raw material suppliers to create the best supply chain value and to be prepared for any supplier disruptions.”

    Innovation is a “key part” of managing the balance, according to Hallack.

    “And innovation must play a significant part along the entire production chain,” he said.

    “The challenges Sun Chemical faces are the same as every other company – rapidly changing tastes and market needs, government regulations and consumer preferences,” Venturini said. “Sun Chemical’s philosophy to deliver ‘solutions, tailor made,’ shapes our relationships with our customers to learn and understand what drives their markets and helps us develop and bring them products that they specifically need to compete and succeed.

    “At Sun Chemical, we’re doing our part to help customers thrive in this dynamic business environment by providing a comprehensive and consistent offering of world-class products and services, delivering consistently on our promises with strong technical and customer service, and offering breakthroughs in technology that will ultimately save our customers money,” Venturini continued.

    “Sun Chemical wants to continue being known as the company that is truly a partner with its customers. To be able to achieve this, our customers have to know that we are here to help them with their problems,” he added. “Backed with 17 research and development centers and the strength of DIC, our parent company, our unparalleled global presence allows for the delivery of local service and support that is customized to the markets it serves. Our coatings customers also can benefit from the fact that Sun Chemical offers a broad portfolio of both pigments and polymers.”

    For Specialty Polymers, Inc., it’s about striking a balance.

    “When we work with a customer to custom develop a resin, we have to understand every aspect of their needs, from performance goals to cost goals. During the collaboration process, we work with the customer to find the best balance for them,” Southwell said. “Customer communication is key!”

    Environmental regulations

    According to MarketsandMarkets, the use of environment-friendly products has been one of the most important trends in the coatings industry over the last 10 years. This was largely influenced by tighter EU regulation regarding reduction of volatile organic compounds (VOC) emission in coating resins.

    The demand has shifted from solvent-based coatings to environment-friendly products, such as water-based, powder, high solid, and UV curable coatings, according to MarketsandMarkets.

    “These products do not contain solvent that evaporates during the curing phase; they only need a special ultraviolet light to cure instantly,” the research stated.
    At Hexion, it’s about using systems – ultra-high solids acrylic polyols and waterborne polyols for 2K PU coatings – based on Cardura E10p Glycidyl Ester.

    Frederix said these technologies have been “broadly” adopted worldwide.

    Siltech has the ability to “strip volatiles down to very low levels, meeting the current regulatory hurdles,” said Global Marketing and Sales Manager Bob Ruckle.
    “We have developed a range of acrylic binders in both solvent- and water-based technologies that meet the stringent requirements of premium global automotive manufacturers,” said Sun Chemical’s Venturini.

    ‘Green’ and sustainable products

    In regards to “green” technology, Sun Chemical launched products under the WATERSOL line.

    “A group of self-emulsifying acrylic resins developed by DIC for automotive interiors, WATERSOL water-based resins deliver performance properties similar to solvent-based resins and demonstrate excellent corrosion resistance, high hardness, pigment dispersability and low-temperature film formation properties,” Venturini said.

    “We also recently launched WATERSOL WQS-364, a UV-curable water-based polymer for water-reducible coatings on plastics which contains a hydrophobic multi-functional methacrylate and urethane acrylate core surrounded by a hydrophilic group,” he added. “This unique technology brings both excellent package stability and a level of chemical and solvent resistance to the cured films not seen with other UV-curable systems.”

    This is an area where Arkema would like to work with customers to address specific needs and drive R&D efforts, per Dumain.

    “Together, we have identified specific focus areas related to sustainability, most notably in water-based, powder and high solid systems coatings,” he said. “To give some examples, we are looking at new ways to improve preservation and dry-film performance in liquid water-based coatings, as well as new application areas for powder such as coating medium-density fiberboard.”

    “We continue to conduct research on green and sustainable technologies. We believe the greenest potential resins are alkyd polymers made from renewable raw materials available in water or water reducible formulas,” Hayden added. “We continue to work on expanding our alkyds in water line, BECKOSOL AQ, to meet performance needs and to expand the number of applications that can use them. For our solvent based resins, we continue to work on lower VOC formulas.”

    Perstop’s three essential polyols – Penta, TMP & Neo – now come in renewable options, said Johansson.

    And “instead of using fossil natural gas as a raw material for Evyron and Neeture,” Johansson added, “we are using locally produced biogas from waste.”

    “Now more than ever we are seeing a need for resins capable of meeting tough performance demands in ultra-low VOC formulations,” Southwell said. “Aiming to minimize solvent load, formulators are looking for polymers providing the functionality of efficient film formation while maintaining high-performance properties. One approach that our R&D team is developing to meet customers’ needs is an acrylic-based hybrid resin. This technique combines traditional acrylic polymer synthesis with other resin chemistries, enabling the hybrid resin to replace less environmentally friendly products.” 
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