An Overview of Thailand’s Paint & Coatings Market

Second largest economy of ASEAN, Thailand is one of the most vibrant paint and coatings market in the region on account of a number of factors. Continued urbanization and decreasing household sizes; demand for new housing and repainting, government initiatives of  infrastructure development; growth in tourism and a rapid rise in purchasing power and increase in retail spending and emergence of the country as an automotive production hub in ASEAN  have led to a steady growth of the country’s paint and coatings industry in recent years. Coatings World presents an overview of country’s paint and coating industry.

Buoyed by a number of factors, Thailand’s paint and coatings industry has made one of the steadiest growths in ASEAN region countries.  The retail market for decorative paint and coatings in the country at the end of 2016 was about THB 19.201 billion. For the five year period between 2011- 2016, the decorative paint and coatings industry has registered a CAGR of 7.97 percent ( at the end of 2011 decorative paint and coatings market stood at THB 13.727 billion).

The Thai market for decorative paints was driven by construction activities, repainting, retail spending and changing consumer preferences. There were several major setbacks in the market during the last few years, which in turn had an adverse impact on the overall economy.  Both new housing constructions and permission for land development in Thailand declined considerably between 2014 and 2016. However, its impact on retail sales in the decorative paint and coatings market were partially offset by an increase in repainting activities, urbanization and higher demand of premium decorative paint and coating products, resulting in lower growth rate from 2014 to 2016, rather than a decline in absolute market size.

Increased awareness and consumer knowledge about decorative paint and coatings, consumer preferences for premium decorative paint and coating products and decrease in average repainting cycles of private household from 7-10 years in 2011 to 5-7 years in 2016 are other factors driving retail sales growth.

The retail market for non-decorative paints and coatings (wood coatings, waterproofing and protective coatings combined) at the end of 2016 was about THB 6,376.9 million in 2016. Primarily driven by greater retail spending and urbanization, this sub-segment registered a CAGR of 6.67 percent over the five year period of 2011- 2016.

Large companies such as TOA Paint (Thailand) Public Company Limited, Akzo Nobel Paints ( Thailand) Company Limited, Jotun Thailand Limited, Beger Co., Ltd, and Nippon Paint (Thailand) Co., Ltd  dominate the paint and coating industry in Thailand, supplying the market with decorative, automotive, marine and  other non-decorative paints and coatings used on metal, concrete, wood and for waterproofing.

Thailand has emerged as an important hub of automotive industry in ASEAN region, resulting in a significant demand of automotive coating and refinishes in the country. Though, in the last two years, the country’s automotive production has posted negative growth numbers, but industry stakeholders say that it is a temporary blip in the journey of the country’s robust automotive segment.

Rising Exports

Rising exports to other regions, especially ASEAN countries, is also expanding the paint and coatings industry in Thailand. Thai paint and coating exports to ASEAN countries accounted for 67.8 percent of the total paint and coating exports in 2015, with Myanmar being the largest market (share of 13.5 percent of total paint and coating exports in 2015).

The other large export markets for the Thai paint and coating industry were India (8.3 percent), Australia (3.4 percent), and China (2.7 percent). From 2011 to 2015, the export of paints and related products from Thailand recorded a CAGR of 6.5 percent from $100.2 million in 2011 to $120.8 million in 2015.

TOA Paint (Thailand) Company is the largest paint and coatings producer in the country with a market share of 48.7 percent at the end of year 2016. Its main products are decorative paint, coating products and non-decorative paint and coating products, such as protective wood lacquers and heavy paints for chemical construction.  In 2017, decorative sub-segment accounted for 68.8 percent of the company’s revenue, while non-decorative sub-segment accounted for 27.7 percent of the total revenues, followed by 3.5 percent from other businesses (supplying raw material to other group companies etc.) 

With three manufacturing plants in Thailand (two plants in Bangna and one in Samrong) and five in ASEAN region, TOA Thailand is one of the three largest paint and coating producers in ASEAN region.

In addition to Thailand, TOA also operates three production plants in Malaysia, Vietnam and Laos. The company has a 10 percent share of Vietnam’s decorative paint market. Currently, the company is setting up three production plants in Indonesia, Myanmar and Cambodia, which will commence commercial production during second half of 2018 and first half of 2019.

Akzo Nobel, which entered into Thailand in 1963, has four manufacturing plants in the country. The company’s Bangkok plant produces decorative and packaging coatings, while three plants located in Nakhon Pathom, Rayong and Chonburi.

In 2017, AkzoNobel commenced commercial production at one new plant and also acquired the powder coating business of a leading Thai producer. The company’s latest plant at Chonburi started commercial production in May 2017. Coming up with  an investment of €31 million, this is AkzoNobel’s ninth production site in the Southeast Asia region. The 45,000 tons per year production facility provides for a number of performance coatings businesses – including metal coatings, protective coatings, specialty coatings and marine coatings, as well certain products from the company’s decorative paints business.

Commenting on the opening of Chonburi plant,  Bill Collins, corporate director of AkzoNobel Performance Coatings business said,  “The new plant will play a key role in driving organic growth for the performance coatings business. The large size of the new site and the already established infrastructure enables later-phase investments for expansion. The Chonburi site will then provide opportunities for possible future expansion and growth in the region.”

Later in November 2017, AkzoNobel acquired the  Samutsakhon based business of V.Powdertech Company Ltd., a leading producer of powder coatings, supplying a range of products for domestic appliances, furniture and general industrial applications.