Anthony Locicero, Associate Editor04.15.20
The coating resins market is projected to grow from $29.5 billion in 2018 to $37.9 billion by 2023, at a compound annual growth rate of 5.1 percent, during the forecast period, according to MarketsandMarkets.
The growth of end-use industries, such as building and construction, packaging, industrial, automotive, marine, aerospace, and furniture, are driving the growth of the coating resins market, per MarketsandMarkets.
“We have seen the demand for resins increase as building and construction activity has grown with the broader economy,” said Daniel T. Grobe, director of sales and marketing at Specialty Polymers.
Coating resins are organic compounds used for decorative and industrial coatings to protect surfaces from extreme environmental conditions coupled with properties such as high durability, adhesion, corrosion resistance, and wear resistance, according to Allied Market Research.
These coatings are extensively used in furniture, automotive, marine, and protective applications, Allied Market Research noted.
“Coatings manufacturers are looking for greater durability and longer coating life at a lower total cost,” said Dan Latas, marketing manager at Lubrizol. “In addition, they may look to enhance the coating application process, enabling applicators to lower the overall cost to apply, such as through a reduced number of coatings required or faster dry times/completions.”
The market is divided into waterborne, conventional solvent-borne, high solid solvent-borne, powder coating, radiation cured, and others, per Allied Market Research.
Sun Chemical Advanced Materials reported growth in the global resins market in 2020, especially in sales of UV-curable, waterborne, and powder coating resins, according to Michael T. Venturini, marketing director, coatings, Sun Chemical.
“In the areas of industrial coatings, we see a continued shift toward waterborne over solvent-borne technologies,” said Diana Rowe, industry marketing manager – Transportation, Industrial, Furniture and Flooring, BASF.
“Water-based resins that are able to reach lower VOCs are currently what customers continue to ask for,” according to Marcia King, VP of UV, Specialties, & Distribution and Dr. Terri Carson, director of Technical Service and Quality Control at Alberdingk Boley, Inc.
Based on resin type, the market is segmented into acrylic, epoxy, polyurethane, alkyd, vinyl, unsaturated polyester resin, saturated polyester resin, and others, Allied Market Research reported.
“Some of the key drivers for epoxy resins in the coatings market include the cost and availability of key raw materials such as ECH and BPA, the timing of plant turnarounds and the availability of shipping containers and transportation modes (truck, railcar) on a global basis,” said Dan Weinmann, market development manager, Epoxy Specialties at Hexion. “Therefore, procurement of epoxy resins and amine curing agents from domestic producers can be a strategic way to improve the security of supply.
“Coatings manufacturers are also looking for cost-effective resins that deliver value above any switching costs, but without sacrificing the security of supply,” Latas said. “For the resin manufacturer, when developing new coating products, all other things being equal, formulators will look at raw materials that are plentiful and more cost-effective than ones that may cause supply chain disruptions.
However, “The novel coronavirus (COVID-19) is impacting the global supply chain in ways that emphasize the importance of partnering with global suppliers who have local production,” he added.
“While the fundamental drivers for the coatings market will return to normal, today the coronavirus epidemic is having a major impact on the coatings business,” Venturini said. “Prior to the epidemic, regulatory and environmental trends included performance improvement and special functionality like anti-fingerprint, infrared absorption, UV-protection and many others. Currently, the main drivers are supply chain security and anti-viral properties.”
More drivers for growth
Powder coatings are projected to be the fastest-growing technology of the coating resins market due to increasingly stringent environmental regulations for zero or non-VOC coatings, according to MarketsandMarkets’ research.
“Sustainability is a key driver that we see across a number of market segments. In the printing and packaging space, this has materialized as a focus on products with increased levels of bio-renewable content,” said Simon K. Foster, industry marketing manager, Printing & Packaging - Dispersions & Resins North America at BASF. “Through bio-sourced raw materials, the industry hopes to reduce the overall environmental impact of our formulations without sacrificing efficacy. Overall across application areas – industrial coatings, printing “and packaging, etc. – we see a drive to lower VOCs to improve worker quality of life and further reduce the environmental impact of finished coating formulations.”
“In the development of new resin products, manufacturers must stay ahead of a continuously changing regulatory landscape across the globe,” Latas said. “From new NMP regulations to APEO-free to VOC restrictions, regulations are constantly changing the face of the resins market, and resin manufacturers must keep up and deliver prompt solutions to remain viable in a competitive market. That means knowing what the next regulations are going to be before they happen so that when they do occur, manufacturers are ready to provide a solution.”
Added Robert Schlager, coatings account manager, Georgia-Pacific Chemicals: “Georgia-Pacific Chemicals sees the primary drivers affecting the industry to be the regulatory issues regarding volatile organic compounds and the market is looking for resins that have lower free monomer content, be they lower formaldehyde, lower phenol, etc.”
Regions for growth
APAC – most notably China, Japan, India, South Korea, Thailand, Indonesia and Singapore – accounted for the largest share of the global coating resins market in 2017, according to MarketsandMarkets.
“Growth swings for coatings between regions are a result of economic, demographic and environmental demands that influence the global manufacture of durable goods and the increase in building and construction,” Latas said.
“With the China tariff situation causing concern for growth in that market, manufacturers are increasingly looking at countries such as India and Vietnam for manufacturing opportunities as well as growth,” added Schlager.
“Environmental trends continue to move forward in Europe and the US but is quickly growing in Asia driven by China’s regulations for improved air quality and reduced VOC emissions,” Venturini said. “This has required paint producers to transition to powder, waterborne or other low-VOC technologies. The ever-growing importance of waterborne technology has created exciting innovation opportunities for resin manufacturers.”
In 2017, Asia-Pacific and Europe collectively accounted for more than 79 percent of the global coating resins industry, in terms of value, according to Allied Market Research.
“According to market studies, high growth regions for epoxy resins were forecast to be China, the Asia Pacific region and North America,” Weinmann said. “This forecast is likely to remain true but the rate of growth can be expected to decrease for 2020 due to the impact of the coronavirus.
“China and India remain well known high growth areas, but accelerated growth in developing economies in the Middle East and Africa are occurring as well,” Latas said. “In addition, with ongoing regulatory pressures throughout the global resins market, big opportunities exist in regions that tend to act quickly to adopt new environmental regulations in a short time period.
“In China, for instance, mandated conversions from solvent-based to water-based resin systems in an extremely short time period has represented new opportunities for resin suppliers,” he continued. “In other regions, including Europe and North America, formulators may want to be fast adopters of new resin technologies in order to enhance competitive positioning. In Latin America, there are always opportunities for growth as the overall size of the coatings market continues to expand.”
“Rapid urbanization in India and China is creating a good demand for resins across all the applications segments in the industry,” said Gunjan Khanijow, global strategic marketing manager Epoxy & Chlorinated Organics EME China at Olin. “China is driving the demand for waterborne coatings as well as hybrid-based powder coatings. The Middle East and Russia are leading regions of growth for epoxy powder-based pipeline coatings. The US and Western Europe are mostly driving resin consumption in various repair and maintenance programs for infrastructure and construction. Also, in the African continent, especially in Nigeria, we are observing growth in mortars and coatings for flooring, which is primarily driven by new public infrastructure programs.”
Foster reported “a number of opportunities” in North America’s regional resin market.
“There are a number of opportunities in the regional resin market that are driven by end-use markets in our region,” he said. “In the packaging space, recyclability is becoming an ever-requested product attribute so we’re focused on product development to enable greater package circularity so that brand owners can fulfill their sustainability commitments.”
Customer demands
On the supplier side, “Performance is key, and customers are looking for more technical support and polymer design based around their specific application,” according to Grobe.
From a distributor’s perspective, “Customers are demanding increased performance and cost control, not necessarily lower costs,” said Brendan M. Cullinan, technology director Coatings & Construction, Brenntag North America.
“Demand for improved product performance is being driven by consumer demands for durable goods improvement in areas of higher heat resistance, lower VOCs, and better flame retardancy/intumescing.”
Low VOC is a popular request.
“Due to regulatory and environmental concerns, our customers are looking for low VOC, low monomer, low bisphenol A and low free formaldehyde phenolic resins,” Schlager said. “Customers are also looking for biobased, green solutions.”
“Typical customer demands include requests for lower VOC and higher performance,” Weinmann said. “However, today’s customers are asking for new products that reduce costs, offer lower use levels, as well as, asking for more sustainable options.
“This means a strong interest in amine curing agents that do not contain benzyl alcohol or nonylphenol, ultra-low VOC waterborne epoxy systems, and faster reactivity curing agents,” he continued. “All of these customer demands have driven new product offerings from Hexion that are coming to the market in 2020.
“Furthermore, there is great interest in testing and qualifying lower yellowing epoxy systems because they avoid the use of isocyanates and offer contractors the opportunity to reduce the number of coatings layers,” Weinmann concluded.
Help with navigating the “challenging” compliance landscape is something Lubrizol’s customers seek.
“Probably the biggest demand we’ve seen from coating formulators is in helping them navigate the challenging compliance landscape,” Latas said. “Customers often expect their suppliers to fully understand and share knowledge of upcoming regulations and to provide enhanced testing and formulation validation of products to meet or exceed those regulations prior to even ordering a sample for their own testing purposes.”
Cost-efficiency is key for BASF customers.
“Overall, customers continue to explore every possible cost-efficiency in order to remain competitive, while at the same time the expectations for resin performance could not be higher,” Foster said. “As a result, we’re working to pursue opportunities that strike a balance for customers between cost, performance/efficacy, and sustainability, where possible or relevant.”
“The key need for customers right now is for our team at Sun Chemical to monitor our global supply chain, proactively manage each of our sites and warehouses, and frequently communicate with our supply base and customers with important updates,” Venturini said. “The challenges Sun Chemical faces are the same as every other company: Managing the supply chain, rapidly changing tastes and market needs, government regulations and consumer preferences. 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.”
“For powder coatings, customers are asking for lower curing temperatures, lower film thicknesses, and phenolic hardeners that are in compliance with ongoing regulatory changes,” said Khanijow. “For metal and mineral coatings, we have customer requests for products complying with developments in Environment, Health, and Safety (EH&S) requirements, faster cure periods to reduce the downtime of assets and flexible epoxy systems with higher chemical and mechanical resistance properties to improve on existing systems, to name a few.”
Balancing demand with rising costs
Recently, BASF increased the prices on polyalcohol Neopentylglycol (NPG), a high-quality intermediate used, for example, to produce polyester resins for coatings, unsaturated polyester resins, lubricants and plasticizers, in Europe.
“For applications with high-performance requirements, the drive has been to find products that enable lower formulated cost, or cost-in-use, without sacrificing performance,” BASF’s Foster said.
For Specialty Polymers, meeting customers’ demands amongst rising costs is all about “finding the right balance.”
“It’s all about finding the right balance for each customer, and communication is key,” Grobe said. “During the collaboration process, we work with the customer to find the best balance for them. When we develop a custom resin it’s important to understand every aspect of their needs, from performance goals to cost goals.”
“Every customer is treated on a case-by-case basis in that their needs from a partner may be different,” Schlager added. “We want to meet their needs in such a way that it creates value for them, and for Georgia-Pacific Chemicals.”
Alberdingk meets customer demands and addresses rising costs “through aggressive raw material sourcing/purchasing, process innovations and analysis of plant performance indicators that yield actionable process improvements,” per Carson and King.
Lubrizol employs methods such as six sigma manufacturing, “to continuously evaluate and improve manufacturing efficiency and operational costs,” according to Latas.
“We invest in equipment in plants to improve our quality and product consistency, which helps minimize extraneous expenses,” he continued. “Our long-term strategy also includes the expansion of production capabilities at the regional level to get closer to customers. All combined, our goal is to continuously deliver advanced resin capabilities to meet customer demand at a cost and quality level that is mutually beneficial.”
Hexion practices what Weinmann called “responsible chemistry.”
“Hexion focuses on developing innovative new products with improved sustainability and we are a leader in operational excellence,” he said. “There are multiple examples where Hexion has decreased waste streams, increased production yields, decreased energy use, reduced emissions and lowered process risk by implementing engineering controls. All of these actions improve sustainability and protect our ability to provide superior service to our global and regional customers.”
Being a low-cost producer is an essential part of Olin’s strategy, Khanijow said.
“We are constantly working on streamlining our operating costs structure through productivity programs such as recycling waste streams from our production lines and the optimization of our supply chain and product portfolio,” Khanijow added.
The growth of end-use industries, such as building and construction, packaging, industrial, automotive, marine, aerospace, and furniture, are driving the growth of the coating resins market, per MarketsandMarkets.
“We have seen the demand for resins increase as building and construction activity has grown with the broader economy,” said Daniel T. Grobe, director of sales and marketing at Specialty Polymers.
Coating resins are organic compounds used for decorative and industrial coatings to protect surfaces from extreme environmental conditions coupled with properties such as high durability, adhesion, corrosion resistance, and wear resistance, according to Allied Market Research.
These coatings are extensively used in furniture, automotive, marine, and protective applications, Allied Market Research noted.
“Coatings manufacturers are looking for greater durability and longer coating life at a lower total cost,” said Dan Latas, marketing manager at Lubrizol. “In addition, they may look to enhance the coating application process, enabling applicators to lower the overall cost to apply, such as through a reduced number of coatings required or faster dry times/completions.”
The market is divided into waterborne, conventional solvent-borne, high solid solvent-borne, powder coating, radiation cured, and others, per Allied Market Research.
Sun Chemical Advanced Materials reported growth in the global resins market in 2020, especially in sales of UV-curable, waterborne, and powder coating resins, according to Michael T. Venturini, marketing director, coatings, Sun Chemical.
“In the areas of industrial coatings, we see a continued shift toward waterborne over solvent-borne technologies,” said Diana Rowe, industry marketing manager – Transportation, Industrial, Furniture and Flooring, BASF.
“Water-based resins that are able to reach lower VOCs are currently what customers continue to ask for,” according to Marcia King, VP of UV, Specialties, & Distribution and Dr. Terri Carson, director of Technical Service and Quality Control at Alberdingk Boley, Inc.
Based on resin type, the market is segmented into acrylic, epoxy, polyurethane, alkyd, vinyl, unsaturated polyester resin, saturated polyester resin, and others, Allied Market Research reported.
“Some of the key drivers for epoxy resins in the coatings market include the cost and availability of key raw materials such as ECH and BPA, the timing of plant turnarounds and the availability of shipping containers and transportation modes (truck, railcar) on a global basis,” said Dan Weinmann, market development manager, Epoxy Specialties at Hexion. “Therefore, procurement of epoxy resins and amine curing agents from domestic producers can be a strategic way to improve the security of supply.
“Coatings manufacturers are also looking for cost-effective resins that deliver value above any switching costs, but without sacrificing the security of supply,” Latas said. “For the resin manufacturer, when developing new coating products, all other things being equal, formulators will look at raw materials that are plentiful and more cost-effective than ones that may cause supply chain disruptions.
However, “The novel coronavirus (COVID-19) is impacting the global supply chain in ways that emphasize the importance of partnering with global suppliers who have local production,” he added.
“While the fundamental drivers for the coatings market will return to normal, today the coronavirus epidemic is having a major impact on the coatings business,” Venturini said. “Prior to the epidemic, regulatory and environmental trends included performance improvement and special functionality like anti-fingerprint, infrared absorption, UV-protection and many others. Currently, the main drivers are supply chain security and anti-viral properties.”
More drivers for growth
Powder coatings are projected to be the fastest-growing technology of the coating resins market due to increasingly stringent environmental regulations for zero or non-VOC coatings, according to MarketsandMarkets’ research.
“Sustainability is a key driver that we see across a number of market segments. In the printing and packaging space, this has materialized as a focus on products with increased levels of bio-renewable content,” said Simon K. Foster, industry marketing manager, Printing & Packaging - Dispersions & Resins North America at BASF. “Through bio-sourced raw materials, the industry hopes to reduce the overall environmental impact of our formulations without sacrificing efficacy. Overall across application areas – industrial coatings, printing “and packaging, etc. – we see a drive to lower VOCs to improve worker quality of life and further reduce the environmental impact of finished coating formulations.”
“In the development of new resin products, manufacturers must stay ahead of a continuously changing regulatory landscape across the globe,” Latas said. “From new NMP regulations to APEO-free to VOC restrictions, regulations are constantly changing the face of the resins market, and resin manufacturers must keep up and deliver prompt solutions to remain viable in a competitive market. That means knowing what the next regulations are going to be before they happen so that when they do occur, manufacturers are ready to provide a solution.”
Added Robert Schlager, coatings account manager, Georgia-Pacific Chemicals: “Georgia-Pacific Chemicals sees the primary drivers affecting the industry to be the regulatory issues regarding volatile organic compounds and the market is looking for resins that have lower free monomer content, be they lower formaldehyde, lower phenol, etc.”
Regions for growth
APAC – most notably China, Japan, India, South Korea, Thailand, Indonesia and Singapore – accounted for the largest share of the global coating resins market in 2017, according to MarketsandMarkets.
“Growth swings for coatings between regions are a result of economic, demographic and environmental demands that influence the global manufacture of durable goods and the increase in building and construction,” Latas said.
“With the China tariff situation causing concern for growth in that market, manufacturers are increasingly looking at countries such as India and Vietnam for manufacturing opportunities as well as growth,” added Schlager.
“Environmental trends continue to move forward in Europe and the US but is quickly growing in Asia driven by China’s regulations for improved air quality and reduced VOC emissions,” Venturini said. “This has required paint producers to transition to powder, waterborne or other low-VOC technologies. The ever-growing importance of waterborne technology has created exciting innovation opportunities for resin manufacturers.”
In 2017, Asia-Pacific and Europe collectively accounted for more than 79 percent of the global coating resins industry, in terms of value, according to Allied Market Research.
“According to market studies, high growth regions for epoxy resins were forecast to be China, the Asia Pacific region and North America,” Weinmann said. “This forecast is likely to remain true but the rate of growth can be expected to decrease for 2020 due to the impact of the coronavirus.
“China and India remain well known high growth areas, but accelerated growth in developing economies in the Middle East and Africa are occurring as well,” Latas said. “In addition, with ongoing regulatory pressures throughout the global resins market, big opportunities exist in regions that tend to act quickly to adopt new environmental regulations in a short time period.
“In China, for instance, mandated conversions from solvent-based to water-based resin systems in an extremely short time period has represented new opportunities for resin suppliers,” he continued. “In other regions, including Europe and North America, formulators may want to be fast adopters of new resin technologies in order to enhance competitive positioning. In Latin America, there are always opportunities for growth as the overall size of the coatings market continues to expand.”
“Rapid urbanization in India and China is creating a good demand for resins across all the applications segments in the industry,” said Gunjan Khanijow, global strategic marketing manager Epoxy & Chlorinated Organics EME China at Olin. “China is driving the demand for waterborne coatings as well as hybrid-based powder coatings. The Middle East and Russia are leading regions of growth for epoxy powder-based pipeline coatings. The US and Western Europe are mostly driving resin consumption in various repair and maintenance programs for infrastructure and construction. Also, in the African continent, especially in Nigeria, we are observing growth in mortars and coatings for flooring, which is primarily driven by new public infrastructure programs.”
Foster reported “a number of opportunities” in North America’s regional resin market.
“There are a number of opportunities in the regional resin market that are driven by end-use markets in our region,” he said. “In the packaging space, recyclability is becoming an ever-requested product attribute so we’re focused on product development to enable greater package circularity so that brand owners can fulfill their sustainability commitments.”
Customer demands
On the supplier side, “Performance is key, and customers are looking for more technical support and polymer design based around their specific application,” according to Grobe.
From a distributor’s perspective, “Customers are demanding increased performance and cost control, not necessarily lower costs,” said Brendan M. Cullinan, technology director Coatings & Construction, Brenntag North America.
“Demand for improved product performance is being driven by consumer demands for durable goods improvement in areas of higher heat resistance, lower VOCs, and better flame retardancy/intumescing.”
Low VOC is a popular request.
“Due to regulatory and environmental concerns, our customers are looking for low VOC, low monomer, low bisphenol A and low free formaldehyde phenolic resins,” Schlager said. “Customers are also looking for biobased, green solutions.”
“Typical customer demands include requests for lower VOC and higher performance,” Weinmann said. “However, today’s customers are asking for new products that reduce costs, offer lower use levels, as well as, asking for more sustainable options.
“This means a strong interest in amine curing agents that do not contain benzyl alcohol or nonylphenol, ultra-low VOC waterborne epoxy systems, and faster reactivity curing agents,” he continued. “All of these customer demands have driven new product offerings from Hexion that are coming to the market in 2020.
“Furthermore, there is great interest in testing and qualifying lower yellowing epoxy systems because they avoid the use of isocyanates and offer contractors the opportunity to reduce the number of coatings layers,” Weinmann concluded.
Help with navigating the “challenging” compliance landscape is something Lubrizol’s customers seek.
“Probably the biggest demand we’ve seen from coating formulators is in helping them navigate the challenging compliance landscape,” Latas said. “Customers often expect their suppliers to fully understand and share knowledge of upcoming regulations and to provide enhanced testing and formulation validation of products to meet or exceed those regulations prior to even ordering a sample for their own testing purposes.”
Cost-efficiency is key for BASF customers.
“Overall, customers continue to explore every possible cost-efficiency in order to remain competitive, while at the same time the expectations for resin performance could not be higher,” Foster said. “As a result, we’re working to pursue opportunities that strike a balance for customers between cost, performance/efficacy, and sustainability, where possible or relevant.”
“The key need for customers right now is for our team at Sun Chemical to monitor our global supply chain, proactively manage each of our sites and warehouses, and frequently communicate with our supply base and customers with important updates,” Venturini said. “The challenges Sun Chemical faces are the same as every other company: Managing the supply chain, rapidly changing tastes and market needs, government regulations and consumer preferences. 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.”
“For powder coatings, customers are asking for lower curing temperatures, lower film thicknesses, and phenolic hardeners that are in compliance with ongoing regulatory changes,” said Khanijow. “For metal and mineral coatings, we have customer requests for products complying with developments in Environment, Health, and Safety (EH&S) requirements, faster cure periods to reduce the downtime of assets and flexible epoxy systems with higher chemical and mechanical resistance properties to improve on existing systems, to name a few.”
Balancing demand with rising costs
Recently, BASF increased the prices on polyalcohol Neopentylglycol (NPG), a high-quality intermediate used, for example, to produce polyester resins for coatings, unsaturated polyester resins, lubricants and plasticizers, in Europe.
“For applications with high-performance requirements, the drive has been to find products that enable lower formulated cost, or cost-in-use, without sacrificing performance,” BASF’s Foster said.
For Specialty Polymers, meeting customers’ demands amongst rising costs is all about “finding the right balance.”
“It’s all about finding the right balance for each customer, and communication is key,” Grobe said. “During the collaboration process, we work with the customer to find the best balance for them. When we develop a custom resin it’s important to understand every aspect of their needs, from performance goals to cost goals.”
“Every customer is treated on a case-by-case basis in that their needs from a partner may be different,” Schlager added. “We want to meet their needs in such a way that it creates value for them, and for Georgia-Pacific Chemicals.”
Alberdingk meets customer demands and addresses rising costs “through aggressive raw material sourcing/purchasing, process innovations and analysis of plant performance indicators that yield actionable process improvements,” per Carson and King.
Lubrizol employs methods such as six sigma manufacturing, “to continuously evaluate and improve manufacturing efficiency and operational costs,” according to Latas.
“We invest in equipment in plants to improve our quality and product consistency, which helps minimize extraneous expenses,” he continued. “Our long-term strategy also includes the expansion of production capabilities at the regional level to get closer to customers. All combined, our goal is to continuously deliver advanced resin capabilities to meet customer demand at a cost and quality level that is mutually beneficial.”
Hexion practices what Weinmann called “responsible chemistry.”
“Hexion focuses on developing innovative new products with improved sustainability and we are a leader in operational excellence,” he said. “There are multiple examples where Hexion has decreased waste streams, increased production yields, decreased energy use, reduced emissions and lowered process risk by implementing engineering controls. All of these actions improve sustainability and protect our ability to provide superior service to our global and regional customers.”
Being a low-cost producer is an essential part of Olin’s strategy, Khanijow said.
“We are constantly working on streamlining our operating costs structure through productivity programs such as recycling waste streams from our production lines and the optimization of our supply chain and product portfolio,” Khanijow added.
