Yogender Singh, India, Asia-Pacific Correspondent10.11.21
With one of the largest shares in the global shipbuilding industry, South Korea has emerged as one of the most important destinations of marine paint and coatings production and consumption. The spurt in new ship builds during the last 18 months is expected to translate into big gains for the marine coatings producers in the next two to three years. Coatings World examines the state of marine paint and coating market and industry in this feature.
Overview of marine coatings in South Korea
Production and consumption of marine paint and coatings has received a big boost during the last three decades in South Korea. Paint and coatings sub-segment in this category has prospered in tandem with the country’s ship-building industry. Beginning in the early 1970s (led by Hyundai Heavy Industries), South Korea overtook Japanese rivals and has dominated the global shipbuilding industry for decades. In recent years, China has taken advantage of lower costs to seize some market share from both the countries. Yet, consumption and production of marine coatings remains substantial in South Korea.
Although the marine segment accounts for only a small share of worldwide paint and coatings market consumption (3-4%), it is highly demanding in terms of the quality levels. This is also one of the most lucrative sub-segment for the paint and coatings producers.
South Korean marine paint and coatings industry was estimated to have a market value of about $360-380 million at the end of 2020. Almost all the global marine paint majors are present in the South Korean market through ventures with domestic paint and coatings producers.
Besides paint and coatings for shipbuilding, container paint is also an important sub-segment for marine paint producers. However, most of the container sales and production (including paint) takes place in China, thereby depriving South Korean naval coatings producers of a small but important sub-segment. Some stakeholders in the industry don’t include container paint in the category of marine paint as characteristics of container paint differ in several ways from those of marine paint.
Much like the global trends, factors like outstanding antifouling and anticorrosion protection as well as growing demand for environmentally friendly coating are some of the key trends in the South Korean marine coatings market. Demands for friction reduction, foul-release, non-stick coatings, water-based coatings, low VOC and non-toxic formulation have prompted marine coating producers to offer new offerings on a regular basis.
Impressive order books!
South Korean shipbuilders retain a reputation for quality and technical innovation and have been able to seize a number of new orders in the last year and a half.
If 2020 was a great year for the South Korean shipbuilders, the current year is expected to be stellar. According to forecasts by The Overseas Economic Research Institute of the Export-Import Bank of Korea, the local shipbuilding industry will see the volume of orders increase more than 100% this year from 2020. The projection is based on signs of recovery in the shipbuilding industry and the growing need to replace old ships worldwide under tougher environmental regulations.
Some unique characteristics of marine paint & coatings industry
Marine paint and coatings have a number of unique characteristics, which makes it one of the most complex sub-segments of our industry. Marine coatings require a range of application properties, including low mixture viscosity, short drying times and long pot life for application flexibility – all in a wide range of climatic conditions, including sub-zero temperatures.
These products are used primarily (about 93–98%) for large ships such as tankers, bulk carriers and container ships, but also for pleasure boats, fishing boats and fishing nets.
Demand for large ships can be divided into new ships and ship repairs. Shipbuilding is done primarily in South Korea, China and Japan (which together account for between 70% and 90% of all shipbuilding, depending on the size of the ship). Repair demand is centered in Southeast Asian areas such as Singapore, given the location along global shipping lanes and the concentration of shipping and maintenance companies in those countries. Global demand for marine paints is about 40% for new ships and 60% for ship repairs.
Demand for new ship paints occurs at various stages during the shipbuilding process. The ship repair cycle is three to five years, with demand heavily influenced by global shipping tonnage. During repairs, anti-fouling paints are completely reapplied. At this time, many customers may specify that the same paint manufacturer as the one used when the ship was built be used in order to ensure coating quality and to prevent new issues from arising.
The market for marine paint is dominated by a few companies, due to the characteristics required for marine paint manufacturers. Two of the most important reasons behind the presence of too few companies in the sub-segment are the capacity to offer marine paint with special features such as antifouling agents that dissolve like soap, thereby preventing seaweed, barnacles, and other marine life from becoming attached to the ship’s hull, and the need of a global network that allows these coating producers to supply the needs of the global ship market.
Major marine coating producers in South Korea
KCC Corporation, Chugoku-Samhwa Paints, Ltd., International Paint (Korea) Ltd., Chokwang Jotun Ltd., Hempel (Korea) Co., Ltd., and PPG SSC Co., Ltd. are the major marine paint and coatings producers in South Korea.
KCC Corporation
KCC Corporation is the largest paint and coatings producer in South Korea. The company’s marine coatings plant is based in Ulsan. In addition to the domestic market, KCC Corporation has overseas plants in Singapore and in Kunshan, China. The Singapore plant produces container coatings and architectural coatings, and the Kunshan plant produces container coatings and coil/precoated metal coatings.
KCC’s anti-corrosive coating for vessels (Korepox EH2350) and ceramic for vacuum interrupter (VI (Vacuum Interrupter)) were selected as “World Class Products of Korea” at an event which has been hosted by the Korea Trade-Investment Promotion Agency (KOTRA) for the 11th consecutive year. Anti-fouling coating for vessels (Seacare A/F795) was also selected a World Class Product for the ninth consecutive year.
Chugoku Samhwa Paints
Chugoku Samhwa Paints, a subsidiary of Japanese paint and coatings producer Chugoku Paints, has been operating in South Korea since 1988. In 2002, the JV commenced production of paint and coatings products at its factory in Gimhae. The company claims to have about 20% of the South Korean marine paint market.
Chokwang Jotun Ltd
Chokwang Jotun Ltd. was founded in 1988 as a joint venture company between South Korean company Chokwang Paint and global marine coating leader Jotun.
In 2019, Hyundai Heavy Industries (HHI), the country’s leading shipbuilder, signed a memorandum of understanding with Jotun for the supply of marine paint. Under the MoU, Jotun will deliver a new type of marine paint, which is claimed to cut emissions of solvent by up to 90%. Jotun has been developing this new type of marine paint for more than a decade. The company claimed its new paint can reduce solvent (VOC) emissions into the air from almost 250g per liter to just 9g.
According to Erik Risberg, one of the scientists behind the new paint, “We have conducted research in Korea and in Norway while developing this paint, and after 13 years can conclude that we have succeeded in developing a product that reduces solvent emissions by over 90%. In addition, the product has better corrosion protection than previous systems, which helps extend the life of the vessels and reduces the need for maintenance. This is also very attractive for ship-owners.”
Overview of marine coatings in South Korea
Production and consumption of marine paint and coatings has received a big boost during the last three decades in South Korea. Paint and coatings sub-segment in this category has prospered in tandem with the country’s ship-building industry. Beginning in the early 1970s (led by Hyundai Heavy Industries), South Korea overtook Japanese rivals and has dominated the global shipbuilding industry for decades. In recent years, China has taken advantage of lower costs to seize some market share from both the countries. Yet, consumption and production of marine coatings remains substantial in South Korea.
Although the marine segment accounts for only a small share of worldwide paint and coatings market consumption (3-4%), it is highly demanding in terms of the quality levels. This is also one of the most lucrative sub-segment for the paint and coatings producers.
South Korean marine paint and coatings industry was estimated to have a market value of about $360-380 million at the end of 2020. Almost all the global marine paint majors are present in the South Korean market through ventures with domestic paint and coatings producers.
Besides paint and coatings for shipbuilding, container paint is also an important sub-segment for marine paint producers. However, most of the container sales and production (including paint) takes place in China, thereby depriving South Korean naval coatings producers of a small but important sub-segment. Some stakeholders in the industry don’t include container paint in the category of marine paint as characteristics of container paint differ in several ways from those of marine paint.
Much like the global trends, factors like outstanding antifouling and anticorrosion protection as well as growing demand for environmentally friendly coating are some of the key trends in the South Korean marine coatings market. Demands for friction reduction, foul-release, non-stick coatings, water-based coatings, low VOC and non-toxic formulation have prompted marine coating producers to offer new offerings on a regular basis.
Impressive order books!
South Korean shipbuilders retain a reputation for quality and technical innovation and have been able to seize a number of new orders in the last year and a half.
If 2020 was a great year for the South Korean shipbuilders, the current year is expected to be stellar. According to forecasts by The Overseas Economic Research Institute of the Export-Import Bank of Korea, the local shipbuilding industry will see the volume of orders increase more than 100% this year from 2020. The projection is based on signs of recovery in the shipbuilding industry and the growing need to replace old ships worldwide under tougher environmental regulations.
Some unique characteristics of marine paint & coatings industry
Marine paint and coatings have a number of unique characteristics, which makes it one of the most complex sub-segments of our industry. Marine coatings require a range of application properties, including low mixture viscosity, short drying times and long pot life for application flexibility – all in a wide range of climatic conditions, including sub-zero temperatures.
These products are used primarily (about 93–98%) for large ships such as tankers, bulk carriers and container ships, but also for pleasure boats, fishing boats and fishing nets.
Demand for large ships can be divided into new ships and ship repairs. Shipbuilding is done primarily in South Korea, China and Japan (which together account for between 70% and 90% of all shipbuilding, depending on the size of the ship). Repair demand is centered in Southeast Asian areas such as Singapore, given the location along global shipping lanes and the concentration of shipping and maintenance companies in those countries. Global demand for marine paints is about 40% for new ships and 60% for ship repairs.
Demand for new ship paints occurs at various stages during the shipbuilding process. The ship repair cycle is three to five years, with demand heavily influenced by global shipping tonnage. During repairs, anti-fouling paints are completely reapplied. At this time, many customers may specify that the same paint manufacturer as the one used when the ship was built be used in order to ensure coating quality and to prevent new issues from arising.
The market for marine paint is dominated by a few companies, due to the characteristics required for marine paint manufacturers. Two of the most important reasons behind the presence of too few companies in the sub-segment are the capacity to offer marine paint with special features such as antifouling agents that dissolve like soap, thereby preventing seaweed, barnacles, and other marine life from becoming attached to the ship’s hull, and the need of a global network that allows these coating producers to supply the needs of the global ship market.
Major marine coating producers in South Korea
KCC Corporation, Chugoku-Samhwa Paints, Ltd., International Paint (Korea) Ltd., Chokwang Jotun Ltd., Hempel (Korea) Co., Ltd., and PPG SSC Co., Ltd. are the major marine paint and coatings producers in South Korea.
KCC Corporation
KCC Corporation is the largest paint and coatings producer in South Korea. The company’s marine coatings plant is based in Ulsan. In addition to the domestic market, KCC Corporation has overseas plants in Singapore and in Kunshan, China. The Singapore plant produces container coatings and architectural coatings, and the Kunshan plant produces container coatings and coil/precoated metal coatings.
KCC’s anti-corrosive coating for vessels (Korepox EH2350) and ceramic for vacuum interrupter (VI (Vacuum Interrupter)) were selected as “World Class Products of Korea” at an event which has been hosted by the Korea Trade-Investment Promotion Agency (KOTRA) for the 11th consecutive year. Anti-fouling coating for vessels (Seacare A/F795) was also selected a World Class Product for the ninth consecutive year.
Chugoku Samhwa Paints
Chugoku Samhwa Paints, a subsidiary of Japanese paint and coatings producer Chugoku Paints, has been operating in South Korea since 1988. In 2002, the JV commenced production of paint and coatings products at its factory in Gimhae. The company claims to have about 20% of the South Korean marine paint market.
Chokwang Jotun Ltd
Chokwang Jotun Ltd. was founded in 1988 as a joint venture company between South Korean company Chokwang Paint and global marine coating leader Jotun.
In 2019, Hyundai Heavy Industries (HHI), the country’s leading shipbuilder, signed a memorandum of understanding with Jotun for the supply of marine paint. Under the MoU, Jotun will deliver a new type of marine paint, which is claimed to cut emissions of solvent by up to 90%. Jotun has been developing this new type of marine paint for more than a decade. The company claimed its new paint can reduce solvent (VOC) emissions into the air from almost 250g per liter to just 9g.
According to Erik Risberg, one of the scientists behind the new paint, “We have conducted research in Korea and in Norway while developing this paint, and after 13 years can conclude that we have succeeded in developing a product that reduces solvent emissions by over 90%. In addition, the product has better corrosion protection than previous systems, which helps extend the life of the vessels and reduces the need for maintenance. This is also very attractive for ship-owners.”
