Kerry Pianoforte, Editor06.10.21
Despite the challenges the industrial coatings market faced during the COVID-19 pandemic, the segment continued to perform well. Coatings manufacturers report strong demand in a variety of areas, including packaging, wood, furniture and coil coatings.
“The global industrial coatings market continues to perform well, even under challenging COVID-19 circumstances impacting supply and pricing of raw materials,” said Chris Bradford, global marketing director, Industrial Coatings, AkzoNobel. “Demand for industrial coatings remained strong. We saw a strong growth – driven by significant volume growth, especially in the Packaging (beverage and food cans) and Coil segments. For wood finishes we see growth in the Asian and EMEA markets, resulting from more customer confidence and increased online ordering of furniture. The wood adhesives market, especially in Asia and South America, benefits from growth in the construction industry because of an increased appetite to start investing in new builds.”
“The global pandemic affected every industry – some more than others – and the industrial segment was certainly impacted, especially during the second quarter of 2020,” said Dave Heflin, vice president of Industrial Coatings, Americas, at Axalta. “Fortunately, we did see rapid improvement in demand during the fourth quarter.
There were some businesses such as construction, energy solutions and coil that continued to produce and performed better than the others, even with the market dynamics and impact of the pandemic.”
“In the past year, we saw impacts from COVID-19 influence our business performance across our varied customer segments,” said Kevin Braun, vice president, Global Industrial Coatings at PPG. “In the first half of 2020, and in the early days of the pandemic, we saw economies slow and demand for some coatings, for end-uses such as construction and transportation, was down. We saw a recovery mid-year as industries began operating again, and demand for coatings across our numerous end use segments increased. In 2020, as a result of consumers spending much more time at home, we saw a sharp increase in demand for coatings in our consumer electronics segment and our kitchen, bakeware and small appliance segment.”
Safety First
During the pandemic, many businesses were forced to either switch to a remote setting or temporarily shut down in an effort to lessen the spread of the virus.
“Our first priority is to keep our employees, their families and our partners safe and well,” said Bradford. “We monitor the impact of the pandemic on our people continuously and make sure to protect their physical and mental health as much as we can. We’re also taking all reasonable steps to serve our customers and maintain business continuity. Our sourcing and sales teams are working closely with our suppliers and customers to proactively manage our end-to-end processes to ensure a security of supply of products.”
“Demand recovery across all industries and a perfect storm of supply interruptions, global shipping issues and the challenges to re-start manufacturing have heavily impacted both raw material availability and pricing,” said Bradford. “Raw material prices for our part of the industry started to increase during Q4 2020 and have yet to peak. We expect that the unprecedented run up in raw material costs as well as raw material availability issues will normalize after 2021 as it is mainly an after effect of the COVID-shutdowns in 2020. We do notice that the past and current COVID events make customers look towards the more established suppliers as they have been able to better establish robust supply chains to weather the turbulence of the market.”
“From the beginning of the pandemic to present day, our top priority was the health and safety of our employees and continuing to support our customers as they needed to be,” said Heflin. “Like other organizations, we quickly transitioned to remote work for non-operations employees, and we implemented strict guidelines promoting social distancing, enhanced disinfecting practices and increased the frequency of on-site cleaning at our sites and provided our plant employees with appropriate PPE.
“In a time of great uncertainty like we’ve experienced over the last year, it’s also very important to check-in with our customers more frequently, Heflin added. “Things were changing so quickly, and so too were the needs of our customers. Staying on top of market conditions, industry trends, and having a continuous dialogue with them gave us valuable insight as to how we could best support them in such a dynamic environment. We also believe that developing new technologies, capabilities and tools to better serve our customers during these unique times is extremely critical. Whether it’s tools developed to virtually service a customer’s operations during a time of restricted travel and visits or technology that provides value added improvements for our customer’s operations or end products, we are focused on developing innovative, value-added solutions for our customers.”
Despite all of the challenges, demand remained strong across a variety of segments. For industrial coatings, Braun said that PPG is seeing a strong demand across its numerous segments. “Some industries recovered from COVID-19 impacts relatively quickly last year, while others, such as the office furniture and transportation sectors, have had a slower recovery,” he noted. “As vaccinations roll out globally and we consider what the ‘new normal’ will entail, our company is focused on ensuring supply to meet increased demands.”
“The health and safety of our employees and their families is our most important core value and we are continuously taking measures in accordance with global and regional government requirements,” Braun added.” We’ve identified ways to safely and effectively deliver for our customers while prioritizing the health and safety of our workforce. We have adjusted our operations to comply with government guidelines, and the company has adapted operations to account for fluid economic activity.”
AkzoNobel continues to see ongoing challenges with raw materials that are an industry-wide issue requiring further attention to minimize disruptions in supply and its commitment to serve customers. “2021 will be another challenging year; however, we are seeing opportunities in most application segments,” said Bradford. “The market for coil is expected to grow 5% a year. The major drivers are the strength of residential construction (doors, roofs, domestic appliance, etc), stability of farm and agriculture construction (fencing, buildings, equipment, etc), and the recovery of the industrial construction segment.”
“The Metal Packaging demand is increasing across food and beverage as consumers increase their in-home consumption, look for shelf-stable products and an alternative to fresh food due to price increases/availability,” noted Bradford. “This demand is further increased as the shift from plastic to the more sustainable format of metal accelerates.”
Bradford noted that work-from-home is driving up home improvement sales on a global scale and furniture factories in Asia currently produce at full capacity to meet global demand. “We also see a continuous growth of home sales in North America,” he added. “These trends positively impact the global Wood Finishes segment. Sustainability remains a key theme for the “built environment” with emphasis on cradle-to-cradle initiatives. This creates an opportunity to promote the sustainability value of our products.”
Axalta is seeing growth and success in all industrial segments across the globe and demand is increasing as markets continue to recover from the impact of the pandemic. “As a result, there is an increasing demand for innovation as our customers are challenged to improve their procedures and operations,” said Heflin. “For example, innovations like our award-winning Voltatex 4224 impregnating resin product help our customers increase electric motor efficiency and reduce the size and weight of electronic devices.”
PPG continues to invest heavily in its powder capabilities, as the company sees powder being a leading market trend with above-market growth rates due to its inherent sustainability benefits. “Sustainability is a driving consideration factor across all industrial segments, but we have seen companies in the consumer electronics market leading the way with early adoption of waterborne coatings,” said Braun. “Our customers’ preference for waterborne coatings is largely driven in response to changing global regulations, the desire to reduce environmental impact and consumer preference.”
Asia Pacific remains the strongest region for growth.
“We see coil in Asia Pacific as the fastest-growing region driven by the uptake of construction, Bradford said. “In packaging, growth is happening globally as economies entered in lockdowns for extended periods and due to a preference for sustainable and recyclable packaging. For wood, growth is largely connected to imports and exports and a higher interest in home-improvements. The region that will pick up the quickest depends on how quickly the movement of goods and the residential construction market recovers.”
“Recovery is happening at varying speeds in different regions of the world – some areas are recovering faster than others,” said Heflin. “APAC continues to be one of the most robust regions for the industrial coatings market.”
“While parts of the world are still grappling with impacts of the virus, we see Asia leading the way in recovery that is driving growth for industrial coatings,” said Braun. “In recent years, we saw slower growth in China, with other parts of Asia, such as India, showing continued demand for coatings. Outside of Asia, in the U.S. and Europe, economic conditions have significantly limited industrial production. This is a cycle we saw starting within the last two years that was greatly exacerbated by COVID-19.”
Meeting Customer Demands
Supply and pricing issues remain a major concern for industrial coatings customers.
“Our customers are looking for a reliable partner – the definition of which has grown to include reliable in our ability to secure supply despite the challenges and interruptions of the market,” said Bradford. “Once the concerns of security of supply are addressed, then our customers are looking for consistently high-quality products with the ability to innovate with them and will bring value to their business through great (sustainable) products, technical knowledge and service.”
“Building and construction customers want to make sure their installations look great for many years, so they choose for coatings that provide long-term durability and weather resistance,” Bradford said. “They also seek functional and aesthetic features that will help differentiate their products. In packaging, our customers have different needs and demands, from trusted epoxy coatings to high-performance BPAni coatings.”
“In wood, our customers have three key focus areas: added value to the end consumer, which means improved aesthetics as well as stain and scratch resistance; reduction in their total cost of ownership, which focuses on products that can remove process steps or costly labor steps, as well as increasing their overall production capacity or reducing their costs and long durability of exterior products to reduce maintenance needs,” he concluded.
“Our customers are looking to partner with them to provide value, improved efficiencies and innovation,” said Heflin. “What, exactly, this looks like varies by customer and end segment. For some customers, it may be decreasing their environmental impact, lowering cure temperatures, using less material, developing products that provide better coverage and aesthetics, etc. The key is working with each of them to understand their business and then developing and introducing solutions that provide value.”
“In light of the global pandemic and challenges with raw materials, our customers are interested in assurances of supply,” said Braun. “From a product performance perspective, we have seen an increase of interest in powder coatings, largely due to sustainability benefits and the new and effective uses for powder, such as antimicrobial powder applications in high-touch settings, and powder on heat-sensitive substrates. With the March 2020 acquisition of Alpha Coating Technologies, we have expanded our powder coatings offering. We now offer small batch and low cure powder coating manufacturing capabilities for general finishes, light industrial, furniture and heat-sensitive substrate end uses. Additionally, as part of our legacy of innovation in the powder space, our offerings for corrosion protection, such as ENVIROCRON Extreme Protection Edge and ENVIROCRON Extreme Protection Dual-Coat are enabling more customers to opt for powder coatings.”
Sustainability
Sustainability is a major point of emphasis for paint and coatings manufacturers.
“At AkzoNobel, we have embedded sustainability into everything we do,” said Bradford. “It’s our driver for growth and innovation. The focus on sustainability remains important for both customers and consumers, including indoor air quality, regulatory compliance and the circular economy (reduce, reuse, recycle). Our company-wide People. Planet. Paint. sustainability ambitions are to generate over 50% of revenue from sustainable solutions, reduce our carbon emissions with 50% and move to 100% renewable electricity by 2030.”
“The direction varies by region and also by segment,” said Heflin. “There is a continued emphasis placed on protecting the environment and air quality. There are several innovative products currently available that improve application efficiencies and lower the level of VOCs. For example, our Imron 2100 high-gloss clearcoat is a two component, low HAPs polyurethane clearcoat based on proprietary Axalta resin technology and produces both polyester and acrylic urethane properties, which are designed for high-quality appearance applications.”
Regulations in China mandating the reduction of VOC emissions are driving a number of changes. “To meet these evolving standards and as an ongoing commitment to sustainability, PPG continues to develop new product solutions,” said Braun. “Methods of VOC reduction, including high solids, waterborne, powder and other lower VOC-emitting materials, is where we’re focused right now. We’re also working to reduce overall impact with more efficient application technologies and better environmental control systems.”
“With changing global regulations and the overall trend toward more sustainable coatings options, we are seeing increased customer preference in certain regions and end-use markets for waterborne technologies,” Braun noted. “For example, in consumer electronics, we see more and more customers opting for waterborne coatings options for decorative coatings. Even in these challenging times, we’ve been able to grow our market share in waterborne coatings as our R&D teams have been working for years to enable us to lead the movement in sustainable solutions.”
“The global industrial coatings market continues to perform well, even under challenging COVID-19 circumstances impacting supply and pricing of raw materials,” said Chris Bradford, global marketing director, Industrial Coatings, AkzoNobel. “Demand for industrial coatings remained strong. We saw a strong growth – driven by significant volume growth, especially in the Packaging (beverage and food cans) and Coil segments. For wood finishes we see growth in the Asian and EMEA markets, resulting from more customer confidence and increased online ordering of furniture. The wood adhesives market, especially in Asia and South America, benefits from growth in the construction industry because of an increased appetite to start investing in new builds.”
“The global pandemic affected every industry – some more than others – and the industrial segment was certainly impacted, especially during the second quarter of 2020,” said Dave Heflin, vice president of Industrial Coatings, Americas, at Axalta. “Fortunately, we did see rapid improvement in demand during the fourth quarter.
There were some businesses such as construction, energy solutions and coil that continued to produce and performed better than the others, even with the market dynamics and impact of the pandemic.”
“In the past year, we saw impacts from COVID-19 influence our business performance across our varied customer segments,” said Kevin Braun, vice president, Global Industrial Coatings at PPG. “In the first half of 2020, and in the early days of the pandemic, we saw economies slow and demand for some coatings, for end-uses such as construction and transportation, was down. We saw a recovery mid-year as industries began operating again, and demand for coatings across our numerous end use segments increased. In 2020, as a result of consumers spending much more time at home, we saw a sharp increase in demand for coatings in our consumer electronics segment and our kitchen, bakeware and small appliance segment.”
Safety First
During the pandemic, many businesses were forced to either switch to a remote setting or temporarily shut down in an effort to lessen the spread of the virus.
“Our first priority is to keep our employees, their families and our partners safe and well,” said Bradford. “We monitor the impact of the pandemic on our people continuously and make sure to protect their physical and mental health as much as we can. We’re also taking all reasonable steps to serve our customers and maintain business continuity. Our sourcing and sales teams are working closely with our suppliers and customers to proactively manage our end-to-end processes to ensure a security of supply of products.”
“Demand recovery across all industries and a perfect storm of supply interruptions, global shipping issues and the challenges to re-start manufacturing have heavily impacted both raw material availability and pricing,” said Bradford. “Raw material prices for our part of the industry started to increase during Q4 2020 and have yet to peak. We expect that the unprecedented run up in raw material costs as well as raw material availability issues will normalize after 2021 as it is mainly an after effect of the COVID-shutdowns in 2020. We do notice that the past and current COVID events make customers look towards the more established suppliers as they have been able to better establish robust supply chains to weather the turbulence of the market.”
“From the beginning of the pandemic to present day, our top priority was the health and safety of our employees and continuing to support our customers as they needed to be,” said Heflin. “Like other organizations, we quickly transitioned to remote work for non-operations employees, and we implemented strict guidelines promoting social distancing, enhanced disinfecting practices and increased the frequency of on-site cleaning at our sites and provided our plant employees with appropriate PPE.
“In a time of great uncertainty like we’ve experienced over the last year, it’s also very important to check-in with our customers more frequently, Heflin added. “Things were changing so quickly, and so too were the needs of our customers. Staying on top of market conditions, industry trends, and having a continuous dialogue with them gave us valuable insight as to how we could best support them in such a dynamic environment. We also believe that developing new technologies, capabilities and tools to better serve our customers during these unique times is extremely critical. Whether it’s tools developed to virtually service a customer’s operations during a time of restricted travel and visits or technology that provides value added improvements for our customer’s operations or end products, we are focused on developing innovative, value-added solutions for our customers.”
Despite all of the challenges, demand remained strong across a variety of segments. For industrial coatings, Braun said that PPG is seeing a strong demand across its numerous segments. “Some industries recovered from COVID-19 impacts relatively quickly last year, while others, such as the office furniture and transportation sectors, have had a slower recovery,” he noted. “As vaccinations roll out globally and we consider what the ‘new normal’ will entail, our company is focused on ensuring supply to meet increased demands.”
“The health and safety of our employees and their families is our most important core value and we are continuously taking measures in accordance with global and regional government requirements,” Braun added.” We’ve identified ways to safely and effectively deliver for our customers while prioritizing the health and safety of our workforce. We have adjusted our operations to comply with government guidelines, and the company has adapted operations to account for fluid economic activity.”
AkzoNobel continues to see ongoing challenges with raw materials that are an industry-wide issue requiring further attention to minimize disruptions in supply and its commitment to serve customers. “2021 will be another challenging year; however, we are seeing opportunities in most application segments,” said Bradford. “The market for coil is expected to grow 5% a year. The major drivers are the strength of residential construction (doors, roofs, domestic appliance, etc), stability of farm and agriculture construction (fencing, buildings, equipment, etc), and the recovery of the industrial construction segment.”
“The Metal Packaging demand is increasing across food and beverage as consumers increase their in-home consumption, look for shelf-stable products and an alternative to fresh food due to price increases/availability,” noted Bradford. “This demand is further increased as the shift from plastic to the more sustainable format of metal accelerates.”
Bradford noted that work-from-home is driving up home improvement sales on a global scale and furniture factories in Asia currently produce at full capacity to meet global demand. “We also see a continuous growth of home sales in North America,” he added. “These trends positively impact the global Wood Finishes segment. Sustainability remains a key theme for the “built environment” with emphasis on cradle-to-cradle initiatives. This creates an opportunity to promote the sustainability value of our products.”
Axalta is seeing growth and success in all industrial segments across the globe and demand is increasing as markets continue to recover from the impact of the pandemic. “As a result, there is an increasing demand for innovation as our customers are challenged to improve their procedures and operations,” said Heflin. “For example, innovations like our award-winning Voltatex 4224 impregnating resin product help our customers increase electric motor efficiency and reduce the size and weight of electronic devices.”
PPG continues to invest heavily in its powder capabilities, as the company sees powder being a leading market trend with above-market growth rates due to its inherent sustainability benefits. “Sustainability is a driving consideration factor across all industrial segments, but we have seen companies in the consumer electronics market leading the way with early adoption of waterborne coatings,” said Braun. “Our customers’ preference for waterborne coatings is largely driven in response to changing global regulations, the desire to reduce environmental impact and consumer preference.”
Asia Pacific remains the strongest region for growth.
“We see coil in Asia Pacific as the fastest-growing region driven by the uptake of construction, Bradford said. “In packaging, growth is happening globally as economies entered in lockdowns for extended periods and due to a preference for sustainable and recyclable packaging. For wood, growth is largely connected to imports and exports and a higher interest in home-improvements. The region that will pick up the quickest depends on how quickly the movement of goods and the residential construction market recovers.”
“Recovery is happening at varying speeds in different regions of the world – some areas are recovering faster than others,” said Heflin. “APAC continues to be one of the most robust regions for the industrial coatings market.”
“While parts of the world are still grappling with impacts of the virus, we see Asia leading the way in recovery that is driving growth for industrial coatings,” said Braun. “In recent years, we saw slower growth in China, with other parts of Asia, such as India, showing continued demand for coatings. Outside of Asia, in the U.S. and Europe, economic conditions have significantly limited industrial production. This is a cycle we saw starting within the last two years that was greatly exacerbated by COVID-19.”
Meeting Customer Demands
Supply and pricing issues remain a major concern for industrial coatings customers.
“Our customers are looking for a reliable partner – the definition of which has grown to include reliable in our ability to secure supply despite the challenges and interruptions of the market,” said Bradford. “Once the concerns of security of supply are addressed, then our customers are looking for consistently high-quality products with the ability to innovate with them and will bring value to their business through great (sustainable) products, technical knowledge and service.”
“Building and construction customers want to make sure their installations look great for many years, so they choose for coatings that provide long-term durability and weather resistance,” Bradford said. “They also seek functional and aesthetic features that will help differentiate their products. In packaging, our customers have different needs and demands, from trusted epoxy coatings to high-performance BPAni coatings.”
“In wood, our customers have three key focus areas: added value to the end consumer, which means improved aesthetics as well as stain and scratch resistance; reduction in their total cost of ownership, which focuses on products that can remove process steps or costly labor steps, as well as increasing their overall production capacity or reducing their costs and long durability of exterior products to reduce maintenance needs,” he concluded.
“Our customers are looking to partner with them to provide value, improved efficiencies and innovation,” said Heflin. “What, exactly, this looks like varies by customer and end segment. For some customers, it may be decreasing their environmental impact, lowering cure temperatures, using less material, developing products that provide better coverage and aesthetics, etc. The key is working with each of them to understand their business and then developing and introducing solutions that provide value.”
“In light of the global pandemic and challenges with raw materials, our customers are interested in assurances of supply,” said Braun. “From a product performance perspective, we have seen an increase of interest in powder coatings, largely due to sustainability benefits and the new and effective uses for powder, such as antimicrobial powder applications in high-touch settings, and powder on heat-sensitive substrates. With the March 2020 acquisition of Alpha Coating Technologies, we have expanded our powder coatings offering. We now offer small batch and low cure powder coating manufacturing capabilities for general finishes, light industrial, furniture and heat-sensitive substrate end uses. Additionally, as part of our legacy of innovation in the powder space, our offerings for corrosion protection, such as ENVIROCRON Extreme Protection Edge and ENVIROCRON Extreme Protection Dual-Coat are enabling more customers to opt for powder coatings.”
Sustainability
Sustainability is a major point of emphasis for paint and coatings manufacturers.
“At AkzoNobel, we have embedded sustainability into everything we do,” said Bradford. “It’s our driver for growth and innovation. The focus on sustainability remains important for both customers and consumers, including indoor air quality, regulatory compliance and the circular economy (reduce, reuse, recycle). Our company-wide People. Planet. Paint. sustainability ambitions are to generate over 50% of revenue from sustainable solutions, reduce our carbon emissions with 50% and move to 100% renewable electricity by 2030.”
“The direction varies by region and also by segment,” said Heflin. “There is a continued emphasis placed on protecting the environment and air quality. There are several innovative products currently available that improve application efficiencies and lower the level of VOCs. For example, our Imron 2100 high-gloss clearcoat is a two component, low HAPs polyurethane clearcoat based on proprietary Axalta resin technology and produces both polyester and acrylic urethane properties, which are designed for high-quality appearance applications.”
Regulations in China mandating the reduction of VOC emissions are driving a number of changes. “To meet these evolving standards and as an ongoing commitment to sustainability, PPG continues to develop new product solutions,” said Braun. “Methods of VOC reduction, including high solids, waterborne, powder and other lower VOC-emitting materials, is where we’re focused right now. We’re also working to reduce overall impact with more efficient application technologies and better environmental control systems.”
“With changing global regulations and the overall trend toward more sustainable coatings options, we are seeing increased customer preference in certain regions and end-use markets for waterborne technologies,” Braun noted. “For example, in consumer electronics, we see more and more customers opting for waterborne coatings options for decorative coatings. Even in these challenging times, we’ve been able to grow our market share in waterborne coatings as our R&D teams have been working for years to enable us to lead the movement in sustainable solutions.”
