Anthony Locicero, Associate Editor08.10.20
The impact of COVID-19 continues to be felt across the world. Like so many other markets, marine coatings were affected by the global pandemic.
“This unfortunate and unprecedented pandemic has impacted every industry across the globe. When looking at the marine coatings market specifically we have found that everything has slowed down,” said Christian Ottosen, group VP, head of Marine Business at Hempel. “For example, it has been more challenging to carry out maintenance work due to temporary lockdowns that have been enforced in several dry dock locations.”
“Our shipyard customers have had to adapt to health and safety guidelines in order to keep operations running and travel restrictions have been hindering the ability of owners and operators to inspect vessels and undertake dry docking activities,” said Jean-Michel Gauthier, AkzoNobel managing director, Marine, Protective and Yacht Coatings. “We have also seen a growing number of vessel lay-ups as a result of the changing economic picture, cruise lines being most severely affected.”
Ottosen suggests using this time wisely.
“With tonnage in some segments in less demand, this is a good opportunity – access to yards permitting – to undertake maintenance and upgrades,” he said.
Raw materials
During the pandemic, supply chains and raw material procurement have also been reshaped by COVID-19.
“Countries and specific ports within countries have closed/opened quickly, all impacting the locations of where coatings are needed. In addition, raw material supply chains have been stressed throughout this pandemic,” said Tom Molenda, global director, Marine Coatings for PPG.
“We have a well-managed cross-functional approach from procurement to production and to supply, so our teams are continuing to work seamlessly together in making the necessary adaptations brought on by COVID-19,” Gauthier said. “We operate in a global supply system and, as can be expected from AkzoNobel, our global and regional integrated supply chain teams have shown great collective agility to proactively de-risk and overcome any raw material constraints coming our way.
“In spite of this very difficult and unpredictable situation, again, we are open for business for all our marine customers across North America and continue to provide commercial, technical and engineering support services without disruption,” he added.
Ottosen said that Hempel has always been very open with our customers about the volatile costs involved with raw materials.
“Raw materials constitute a major part of the cost of manufacturing coatings for the protective, marine and decorative segments,” he continued. “In the past, we have given notice to our customers when we have had to adjust the prices of certain products and always explained the reasons behind this.
“In our 2019 Annual Report, we mention that we had an improvement in earnings from our underlying business and this was mainly driven by two factors. First, we benefitted from efficiency gains in operations.
Second, the cost of raw materials had stabilized following an earlier increase,” Ottosen said. “Whilst we strive to deliver sustainable products to our customers that have minimal impact on the environment or the health and safety of employees, some of our products do contain substances that require careful handling. In order to minimize their effect, we are committed to using more sophisticated raw materials and reducing the inclusion of potentially hazardous substances known as red raw materials.”
Market outlook
The marine coatings market was valued at $3.19 billion in 2016 and is predicted to grow at a 3.5 percent CAGR between 2017-2022, according to MarketsandMarkets, which forecasts the marine coatings market to be worth $3.93 billion by 2022.
Ottosen reported positive growth for Hempel last year.
“In 2019 we experienced positive organic growth overall, which was partly due to our marine segment where we witnessed a strong performance in dry-docking due to a number of factors,” he said. “2019 began slowly but the latter half of the year saw “ a strong, solid performance.”
There is still room for optimism.
“Marine continues to be very competitive and the global pandemic has certainly caused a disruption, but we remain positive as planned maintenance schedules continue to be implemented as owners and operators recognize the need to maintain effective coatings,” Ottosen said.
“As COVID-19-related restrictions are lifting, we are seeing a return to normal ordering patterns around the world as well as in North America,” Gauthier said. “For our customers with operational vessels coming to dry dock, and for those customers in our Coastal and Navy segments, we are open for business and ready to support and enable successful completion of their maintenance and repair plans.”
“While definitely impacted, there remain elements of resiliency that continue to prevail through a very challenging 2020,” added Molenda. “On the new construction side of the business, ordering has slowed considerably since the COVID-19 crisis hit. We remain optimistic that this slowdown is a delay in ordering as opposed to a true loss of economic development. On the maintenance side, despite the challenges in segments like cruise and container, the marine business has been more resilient than new construction and we expect this to continue throughout 2020.”
Reasons for growth
MarketsandMarkets, in a recent report, cited increasing demand for marine coatings from the shipbuilding industry in emerging economies such as China, India, and Brazil, to fuel the growth of the marine coatings market across the globe.
“Customers continue to want products that will maximize their efficiency, improve their bottom line and also minimize their environmental footprint,” Ottosen said. “Interestingly something we have been focusing more on in recent years is sustainability, embedding it as a strategic element in our business and we are seeing more and more of our customers doing the same. We are working with our customers to develop solutions that help reach their sustainability goals through fuel savings and reduced CO2 emissions, improving their sustainability performance.”
“The health of the market is dictated by a number of factors, including U.S. and Canadian economic growth outlook and the global trade it stimulates,” Gauthier said. “As COVID-19-related restrictions are lifting, we expect to see a gradual recovery of the industry. However, this is highly dependent on economies continuing to re-open and effectively manage any second wave of the virus.”
According to marine industry analyst Clarksons Research (COVID-19: Shipping Impact Assessment No. 6), the global GDP is set to fall due to COVID-19. As a result, Clarksons suggests that global seaborne trade will contract by 5.6 percent during 2020.
“This is one reason behind the increased number of layups currently seen in the market, and we are actively harnessing the power of big data in our Intertrac software suite to help our customers identify the best locations for layup of their vessels based on the fouling challenge at each location,” Gauthier said. “Our customers also continue to connect with us for advice and support on managing vessel performance, fuel efficiency and emissions – for both upcoming dry dockings and in relation to returning vessels to service as quickly and safely as possible. For example, due to the surplus in oil, tankers have been used as floating storage units, and our customers have been looking for best practice solutions for bringing them back to service.”
Added Molenda: “In the long term, the marine marketplace and the coatings market within it are tied to general economic growth and to global seaborne trade. Currently, there are a number of environmental regulations imposed upon the maritime industry, and these new requirements will contribute to strong demand for coatings that deliver high levels of vessel efficiency in terms of speed and power.”
Trends
Efficiency, regulatory changes and sustainability are amongst the current trends of the marine coatings market.
“The trends driving the marine coatings market continue to be centered on efficiency but also on regulatory changes and sustainability. One of the most significant environmental regulations affecting the maritime industry came into force on Jan. 1, 2020, with the IMO’s 0.5 percent global sulfur cap,” Ottosen said. “Simultaneously the IMO is pushing towards reducing greenhouse gas emissions by 50 percent by 2050, compared to a 2008 baseline. The goal is ultimately to eliminate emissions from shipping altogether.
“In addition, shipping companies are also positively working towards adopting the United Nations Sustainable Development Goals. In particular goal No. 13 – Climate Action: To take urgent action to combat climate change and its impacts. The IMO and other international bodies are continuously working towards integrating climate change measures into national policies, strategies and planning. This is vital as sustainability is key to our industry evolving for the better,” Ottosen continued.
“All of these changes in the industry are having a positive impact on the marine coatings market as the difference between a low performing coating and a premium solution can save as much as 20 percent in CO2 emissions,” he concluded.
According to Molenda, the technology is headed towards high vessel efficiency as well as an environmentally sensitive footprint.
“Sustainability, minimization of fuel consumption, air emissions and big data are key topics for the Marine Industry at the moment, in our opinion,” AkzoNobel’s Gauthier said. “Sustainability is rightly front and center of everything we do in our business, having already been one of the first movers in foul release technology since the very first introduction of our Intersleek technology, a biocide-free product that continues to deliver proven fuel savings as well as easy-clean characteristics.
“As with many industries, big data will also play an important role going forward. By using our proprietary hull performance analytics, we can view live ‘at sea’ performance data of a hull and use it to make decisions on vessel routings based on fouling challenge assessments,” he continued. “Our Intertrac software suite supports this move within the market and enables us to be the trusted partner to help customers make sound product selections meeting their technical and economic requirements.
“Crucially, our hull performance innovations will continue to drive our industry forward, keeping the environment and ocean conservation at the very heart of the International brand. We are working cooperatively with customers to provide guidance relating to enhanced fouling challenge assessments, improved inspections and vessel cleaning to ensure clean hull throughout scheme lifetime. We strongly believe this focused approach is what our customers expect from us to help address their environmental footprint reduction challenge beyond compliance and enable the shipping industry to achieve its 2030 carbon-neutral ambition,” Gauthier concluded.
Anti-fouling coatings are projected to record a 2.3 percent CAGR and reach $2.2 billion by the end of 2027, according to ReportLinker’s July 2020 “Global Marine Coatings Industry” report.
“Biocidal anti-foulings are still important technologies and continue to have a place in a complete fouling control portfolio as long as compliance with IMO and global environmental regulation and legislation is maintained,” Gauthier said.
Areas of growth
The Asia Pacific region is expected to lead the marine coatings market through 2022, owing to the increased consumption of marine coatings in emerging economies such as China, India, and South Korea, according to MarketsandMarkets.
“Demand will continue to be heavily weighted to the Asia Pacific region both from a shipyard perspective as well as a growing base of vessel ownership,” PPG’s Molenda said. “Key European markets such as Greece will continue to be leading areas for vessel ownership.”
“Greece is a very important market for us with the total asset value of the Greek-owned fleet topping $100 billion,” Hempel’s Ottosen said. “But all the major shipping countries in Europe and Asia (Germany, Singapore, China, Japan Norway to name a few) have a great demand for marine coatings.”
The demand for oil and gas is increasing in tandem with the ongoing urbanization and industrialization in the APAC region, MarketsandMarkets reported.
This, in turn, has fueled the demand for large cargo vessels from the region, thereby increasing the demand for marine coatings in the Asia Pacific region, per MarketsandMarkets.
In North America, AkzoNobel “has a broad base of demand across various marine sectors in the market,” Gauthier said.
“We are therefore glad we can deliver high-performance coatings and services to meet the needs of our customers in new-build or repair yard settings, in the main coastal and inland waterway areas across the continent,” he added.
Product launches
AkzoNobel’s most recent offering is Intersmooth 7670SPC, a high-performance, high solids self-polishing copolymer anti-fouling paint.
“It uses patented copolymer technology to deliver a low friction surface with the added benefit of being TBT and copper-free,” Gauthier said. “It is specifically formulated to tackle the demanding challenges of coastal waterways where vessels tend to operate in shallower, warmer waters and generally operate at a lower speed with frequent static periods. These factors typically lead to a high degree of fouling formation, so Intersmooth 7670SPC is our latest response to this for coastal fleets.”
In September 2019, Hempel released its fouling defense hull coating solution Hempaguard MaX.
“This unique three-coat hull solution provides vessels with a smoother hull reducing drag, resulting in significantly lower fuel requirements and delivering a maximum speed loss of 1.2 percent over five years (according to ISO 19030), as well as eight percent higher out of dock fuel savings,” Ottosen said. “It is suitable for all vessel types and remains fully effective in both warm and cold water, and at slow and normal speed – including idle periods of up to 120 days.
The coating system comprises an anti-corrosive primer (Hempaprime Immerse 900), the tie coat (Nexus II), and topcoat (Hempaguard X8).
PPG SigmaGlide is “based on a unique 100% silicone binder system and is an outstanding high-performance solution for marine industry applications,” Molenda said. “SigmaGlide delivers excellent hull efficiency performance and provides speed and power improvement.
“This unfortunate and unprecedented pandemic has impacted every industry across the globe. When looking at the marine coatings market specifically we have found that everything has slowed down,” said Christian Ottosen, group VP, head of Marine Business at Hempel. “For example, it has been more challenging to carry out maintenance work due to temporary lockdowns that have been enforced in several dry dock locations.”
“Our shipyard customers have had to adapt to health and safety guidelines in order to keep operations running and travel restrictions have been hindering the ability of owners and operators to inspect vessels and undertake dry docking activities,” said Jean-Michel Gauthier, AkzoNobel managing director, Marine, Protective and Yacht Coatings. “We have also seen a growing number of vessel lay-ups as a result of the changing economic picture, cruise lines being most severely affected.”
Ottosen suggests using this time wisely.
“With tonnage in some segments in less demand, this is a good opportunity – access to yards permitting – to undertake maintenance and upgrades,” he said.
Raw materials
During the pandemic, supply chains and raw material procurement have also been reshaped by COVID-19.
“Countries and specific ports within countries have closed/opened quickly, all impacting the locations of where coatings are needed. In addition, raw material supply chains have been stressed throughout this pandemic,” said Tom Molenda, global director, Marine Coatings for PPG.
“We have a well-managed cross-functional approach from procurement to production and to supply, so our teams are continuing to work seamlessly together in making the necessary adaptations brought on by COVID-19,” Gauthier said. “We operate in a global supply system and, as can be expected from AkzoNobel, our global and regional integrated supply chain teams have shown great collective agility to proactively de-risk and overcome any raw material constraints coming our way.
“In spite of this very difficult and unpredictable situation, again, we are open for business for all our marine customers across North America and continue to provide commercial, technical and engineering support services without disruption,” he added.
Ottosen said that Hempel has always been very open with our customers about the volatile costs involved with raw materials.
“Raw materials constitute a major part of the cost of manufacturing coatings for the protective, marine and decorative segments,” he continued. “In the past, we have given notice to our customers when we have had to adjust the prices of certain products and always explained the reasons behind this.
“In our 2019 Annual Report, we mention that we had an improvement in earnings from our underlying business and this was mainly driven by two factors. First, we benefitted from efficiency gains in operations.
Second, the cost of raw materials had stabilized following an earlier increase,” Ottosen said. “Whilst we strive to deliver sustainable products to our customers that have minimal impact on the environment or the health and safety of employees, some of our products do contain substances that require careful handling. In order to minimize their effect, we are committed to using more sophisticated raw materials and reducing the inclusion of potentially hazardous substances known as red raw materials.”
Market outlook
The marine coatings market was valued at $3.19 billion in 2016 and is predicted to grow at a 3.5 percent CAGR between 2017-2022, according to MarketsandMarkets, which forecasts the marine coatings market to be worth $3.93 billion by 2022.
Ottosen reported positive growth for Hempel last year.
“In 2019 we experienced positive organic growth overall, which was partly due to our marine segment where we witnessed a strong performance in dry-docking due to a number of factors,” he said. “2019 began slowly but the latter half of the year saw “ a strong, solid performance.”
There is still room for optimism.
“Marine continues to be very competitive and the global pandemic has certainly caused a disruption, but we remain positive as planned maintenance schedules continue to be implemented as owners and operators recognize the need to maintain effective coatings,” Ottosen said.
“As COVID-19-related restrictions are lifting, we are seeing a return to normal ordering patterns around the world as well as in North America,” Gauthier said. “For our customers with operational vessels coming to dry dock, and for those customers in our Coastal and Navy segments, we are open for business and ready to support and enable successful completion of their maintenance and repair plans.”
“While definitely impacted, there remain elements of resiliency that continue to prevail through a very challenging 2020,” added Molenda. “On the new construction side of the business, ordering has slowed considerably since the COVID-19 crisis hit. We remain optimistic that this slowdown is a delay in ordering as opposed to a true loss of economic development. On the maintenance side, despite the challenges in segments like cruise and container, the marine business has been more resilient than new construction and we expect this to continue throughout 2020.”
Reasons for growth
MarketsandMarkets, in a recent report, cited increasing demand for marine coatings from the shipbuilding industry in emerging economies such as China, India, and Brazil, to fuel the growth of the marine coatings market across the globe.
“Customers continue to want products that will maximize their efficiency, improve their bottom line and also minimize their environmental footprint,” Ottosen said. “Interestingly something we have been focusing more on in recent years is sustainability, embedding it as a strategic element in our business and we are seeing more and more of our customers doing the same. We are working with our customers to develop solutions that help reach their sustainability goals through fuel savings and reduced CO2 emissions, improving their sustainability performance.”
“The health of the market is dictated by a number of factors, including U.S. and Canadian economic growth outlook and the global trade it stimulates,” Gauthier said. “As COVID-19-related restrictions are lifting, we expect to see a gradual recovery of the industry. However, this is highly dependent on economies continuing to re-open and effectively manage any second wave of the virus.”
According to marine industry analyst Clarksons Research (COVID-19: Shipping Impact Assessment No. 6), the global GDP is set to fall due to COVID-19. As a result, Clarksons suggests that global seaborne trade will contract by 5.6 percent during 2020.
“This is one reason behind the increased number of layups currently seen in the market, and we are actively harnessing the power of big data in our Intertrac software suite to help our customers identify the best locations for layup of their vessels based on the fouling challenge at each location,” Gauthier said. “Our customers also continue to connect with us for advice and support on managing vessel performance, fuel efficiency and emissions – for both upcoming dry dockings and in relation to returning vessels to service as quickly and safely as possible. For example, due to the surplus in oil, tankers have been used as floating storage units, and our customers have been looking for best practice solutions for bringing them back to service.”
Added Molenda: “In the long term, the marine marketplace and the coatings market within it are tied to general economic growth and to global seaborne trade. Currently, there are a number of environmental regulations imposed upon the maritime industry, and these new requirements will contribute to strong demand for coatings that deliver high levels of vessel efficiency in terms of speed and power.”
Trends
Efficiency, regulatory changes and sustainability are amongst the current trends of the marine coatings market.
“The trends driving the marine coatings market continue to be centered on efficiency but also on regulatory changes and sustainability. One of the most significant environmental regulations affecting the maritime industry came into force on Jan. 1, 2020, with the IMO’s 0.5 percent global sulfur cap,” Ottosen said. “Simultaneously the IMO is pushing towards reducing greenhouse gas emissions by 50 percent by 2050, compared to a 2008 baseline. The goal is ultimately to eliminate emissions from shipping altogether.
“In addition, shipping companies are also positively working towards adopting the United Nations Sustainable Development Goals. In particular goal No. 13 – Climate Action: To take urgent action to combat climate change and its impacts. The IMO and other international bodies are continuously working towards integrating climate change measures into national policies, strategies and planning. This is vital as sustainability is key to our industry evolving for the better,” Ottosen continued.
“All of these changes in the industry are having a positive impact on the marine coatings market as the difference between a low performing coating and a premium solution can save as much as 20 percent in CO2 emissions,” he concluded.
According to Molenda, the technology is headed towards high vessel efficiency as well as an environmentally sensitive footprint.
“Sustainability, minimization of fuel consumption, air emissions and big data are key topics for the Marine Industry at the moment, in our opinion,” AkzoNobel’s Gauthier said. “Sustainability is rightly front and center of everything we do in our business, having already been one of the first movers in foul release technology since the very first introduction of our Intersleek technology, a biocide-free product that continues to deliver proven fuel savings as well as easy-clean characteristics.
“As with many industries, big data will also play an important role going forward. By using our proprietary hull performance analytics, we can view live ‘at sea’ performance data of a hull and use it to make decisions on vessel routings based on fouling challenge assessments,” he continued. “Our Intertrac software suite supports this move within the market and enables us to be the trusted partner to help customers make sound product selections meeting their technical and economic requirements.
“Crucially, our hull performance innovations will continue to drive our industry forward, keeping the environment and ocean conservation at the very heart of the International brand. We are working cooperatively with customers to provide guidance relating to enhanced fouling challenge assessments, improved inspections and vessel cleaning to ensure clean hull throughout scheme lifetime. We strongly believe this focused approach is what our customers expect from us to help address their environmental footprint reduction challenge beyond compliance and enable the shipping industry to achieve its 2030 carbon-neutral ambition,” Gauthier concluded.
Anti-fouling coatings are projected to record a 2.3 percent CAGR and reach $2.2 billion by the end of 2027, according to ReportLinker’s July 2020 “Global Marine Coatings Industry” report.
“Biocidal anti-foulings are still important technologies and continue to have a place in a complete fouling control portfolio as long as compliance with IMO and global environmental regulation and legislation is maintained,” Gauthier said.
Areas of growth
The Asia Pacific region is expected to lead the marine coatings market through 2022, owing to the increased consumption of marine coatings in emerging economies such as China, India, and South Korea, according to MarketsandMarkets.
“Demand will continue to be heavily weighted to the Asia Pacific region both from a shipyard perspective as well as a growing base of vessel ownership,” PPG’s Molenda said. “Key European markets such as Greece will continue to be leading areas for vessel ownership.”
“Greece is a very important market for us with the total asset value of the Greek-owned fleet topping $100 billion,” Hempel’s Ottosen said. “But all the major shipping countries in Europe and Asia (Germany, Singapore, China, Japan Norway to name a few) have a great demand for marine coatings.”
The demand for oil and gas is increasing in tandem with the ongoing urbanization and industrialization in the APAC region, MarketsandMarkets reported.
This, in turn, has fueled the demand for large cargo vessels from the region, thereby increasing the demand for marine coatings in the Asia Pacific region, per MarketsandMarkets.
In North America, AkzoNobel “has a broad base of demand across various marine sectors in the market,” Gauthier said.
“We are therefore glad we can deliver high-performance coatings and services to meet the needs of our customers in new-build or repair yard settings, in the main coastal and inland waterway areas across the continent,” he added.
Product launches
AkzoNobel’s most recent offering is Intersmooth 7670SPC, a high-performance, high solids self-polishing copolymer anti-fouling paint.
“It uses patented copolymer technology to deliver a low friction surface with the added benefit of being TBT and copper-free,” Gauthier said. “It is specifically formulated to tackle the demanding challenges of coastal waterways where vessels tend to operate in shallower, warmer waters and generally operate at a lower speed with frequent static periods. These factors typically lead to a high degree of fouling formation, so Intersmooth 7670SPC is our latest response to this for coastal fleets.”
In September 2019, Hempel released its fouling defense hull coating solution Hempaguard MaX.
“This unique three-coat hull solution provides vessels with a smoother hull reducing drag, resulting in significantly lower fuel requirements and delivering a maximum speed loss of 1.2 percent over five years (according to ISO 19030), as well as eight percent higher out of dock fuel savings,” Ottosen said. “It is suitable for all vessel types and remains fully effective in both warm and cold water, and at slow and normal speed – including idle periods of up to 120 days.
The coating system comprises an anti-corrosive primer (Hempaprime Immerse 900), the tie coat (Nexus II), and topcoat (Hempaguard X8).
PPG SigmaGlide is “based on a unique 100% silicone binder system and is an outstanding high-performance solution for marine industry applications,” Molenda said. “SigmaGlide delivers excellent hull efficiency performance and provides speed and power improvement.
