Mainland Europe is home to many large paint industries, with the four largest mainland economies of Germany, France, Italy and Spain all being the case in point. The German paint industry is obviously large and prominent and benefits from being in extremely good positions for chemical supplies given the strong German chemical industry and pan-European exports of coatings; Germany is the largest exporter of coatings in Europe.

These days we see more interest and more attractive growth rates in Eastern Europe and I can’t help thinking these growth markets are the real target. Poland is also a large paint market on Germany’s doorstep and often one accessed through takeovers.

A couple of years ago, I wrote very speculatively about whether Germany would start to become a hunting ground for consolidation within the industry, and although initially it didn’t look like it would, in fact it has turned out to be the case. In August and September, two contrasting deals came to light that illustrate two different aspects of how it is happening. The first has been the Sherwin-Williams/Sika deal and the second is the MIPA/Klumpp deal.

U.S. paintmakers continue to target Europe

Sika has sold its European industrial coatings business to Sherwin-Williams in what is seen as a non-core disposal for the Swiss building chemicals group. It has been particularly active in recent years with constructing and acquiring more fundamental building chemicals facilities in emerging economies, particularly Africa and in the Americas. For Sherwin-Williams, the deal provides access to a wide portfolio of innovative products and solutions that are generally sold to specialized customer groups such as steel construction companies or anti-corrosion experts. The markets that the business targets are Germany, Austria, Switzerland and Poland.

The deal includes just one production facility in Vaihingen in southwest Germany, and furnishes Sherwin-Williams with an additional $80 million in turnover or thereabouts. Previously, Sherwin-Williams’ last sizeable acquisition in Europe was the Valspar business, which had a large portfolio of industrial and decorative operations in the content, and one should not forget its smaller acquisition of Leighs Paints in the UK.

A strong footing in serving the automotive OEM industry with coatings has seen PPG make something of a beeline for German paintmakers of late. The takeover of Wörwag, a global manufacturer of coatings for industrial and automotive applications, was closed earlier this year.

This was a sizeable producer of powder, liquid and film coating in Stuttgart with sales of about €220 million. Its presence is thoroughly global, and beyond Germany offered locations in the U.S., China, South Africa, Mexico, Spain, Switzerland and Poland.

In a similar vein, PPG also picked up Cetelon Lackfabrik GmbH, a manufacturer of coatings for automotive and light truck wheel applications. Cetelon develops and manufactures a wide range of coating systems for the wheel industry, including certain proprietary technologies. It operates production and sales offices in Ditzingen, Germany, from which it serves many leading wheel suppliers worldwide. This is a much smaller business of about 95 people globally, also based in Stuttgart. The company was acquired from the Berlac Group. Previous to these acquisitions, PPG had acquired Hemmelrath (in 2019), another respected German supplier of coatings to the automotive industry.

Efficiency and technology drive domestic changes

The German MIPA Group has had a long history of consolidation and what follows focuses on Germany again, but it should be noted that the company has also been active in strengthening its representation in Italy, Romania and Australia.

Its latest domestic deal is taking over the business segment of spray paint systems for the furniture, staircase and door industries from Klumpp Coatings GmbH.

MIPA SE offers a complete range of products for almost all applications and areas of use in terms of finishing work on wood surfaces.

Thanks to the many years of experience within the MIPA Group and numerous synergies within the industrial and automotive coatings business units, MIPA offers individual solutions in order to be able to comprehensively serve all customers in trade and industry. The customer base transferred from Klumpp to MIPA in the course of the takeover can benefit from this in the long term. At the same time, both Klumpp and MIPA can strengthen their core areas.

Klumpp, together with its sister company Oskar Nolte, belongs to the Hamburg-based SIC Holding (owned by the Möhrle family). Klumpp has been developing coatings for the flooring and furniture industries for over 100 years.   In focusing on the flooring sector and on industrial furniture, customers who work with environmentally compatible radiation-curing and waterborne paint systems for roller applications, the company is handing over a portfolio of customers to MIPA.

Beyond water-based solutions, MIPA also develops conventional solvent-based systems as well as modern high-solid and UV systems. Combined with the tradition of the Rosner brand, product quality and a high level of understanding for the requirements in trade and industry complement each other. The main focus is on both individual solutions as well as the goal of providing customers with comprehensive support at all stages of the coating process and offering products and colors in quantities that meet their needs.

Klumpp Coatings, on the other hand, concentrates exclusively on environmentally compatible, radiation-curing and water-based coating systems. With this focus and through investments in this area – such as excimer laboratory equipment for ultra-matt systems – the company aims to expand its position as a technology leader for flooring systems.

In combination with Oskar Nolte GmbH, which concentrates exclusively on major customers in the furniture sector, the company is striving to become the world’s leading partner for its customers in the field of environmentally compatible roller coating systems. These are mainly used on wood and wood-based materials, but increasingly also on innovative substrates such as vinyl and composite systems.

These are not the only rearrangements on domestic soil that MIPA Group has implemented. Following its acquisition in December 2018 of the insolvent paint producer Landshuter Lackfabrik, Landshuter Lackfabrik GmbH continued until the end of 2020 as an independent company. However, with effect from the start of this year, the

MIPA Group has officially merged it with its own ongoing operations. Production continues at the Landshut site, but as a new plant of MIPA SE.

Since the takeover, the course for a promising development has already been set there through a series of building and machinery improvements. In addition to renovations and structural changes, important core processes have also been standardized and optimized.

Numerous further investments in a modern and future-proof production facility in Landshut have been commissioned this year. With the R&D departments for wood and industrial coatings having already been relocated from Essenbach to Landshut, the company’s focus now lies on the expansion of its technical center and the training section for wood coatings. The company aims to transfer its wood coatings products to their respective end-use applications. In the course of doing so, a combination of new investments and a re-positioning of the company’s equipment from different locations will all come together in Landshut.

Some other recent consolidations that have come about after long-term cooperation have been made by Germany’s Sto Group and Switzerland’s Karl Bubenhofer.

This year, the Sto Group acquired the remaining 50.2% interest in JONAS Farbenwerke that it did not hold. The two companies have hitherto been in a partnership and the deal was subject to approval from the Bundeskartellamt (German Federal Cartel Office).

JONAS is a family-run company with 88 employees and manufactures wall paints and other water-based coating products for the professional market in Germany. It operates an ultra-modern manufacturing plant in Wülfrath, Germany and offers products of the highest quality. It has also developed into something of a specialist for private label paints.

This acquisition will be instrumental in establishing a second distribution channel for the Sto Group as far as specialist retailers and wholesalers are concerned. Of special note is the complementarity of the product portfolio and strengths came with the deal; while Sto’s core competencies are façade products, JONAS specializes in products for interiors and renovation projects.

The intensified cooperation will enable JONAS to benefit from important competencies of the Sto Group, such as digitization or international procurement, in order to successfully face the growing pressure and increasingly rapid changes in the markets.

Also, Geholit + Wiemer Lack und Kunststoff-Chemie GmbH became part of the Swiss KABE Swiss Group earlier this year. The Bubenhofer family acquired all the shares of the German, medium-sized coating material manufacturer in the context of a succession solution. Geholit + Wiemer is a producer of corrosion protection solutions and industrial coatings. The two companies had operated as business partners for more than 20 years.