Brazil Growth Leads Latin America

Brazil’s robust demand for paint and coatings materials grew a solid 6% during 2024, essentially doubling the national gross domestic product increase. In years past, the industry has typically outpaced GDP acceleration by one or two percentage points, but last year, the ratio accelerated, according to a recent report by Abrafati, the Associação Brasileira dos Fabricantes de Tintas.

“The Brazilian paint and coatings market ended 2024 with record sales, exceeding all forecasts offered over the course of the year. The pace of sales stayed strong throughout the year in all product lines, pushing the total volume up to 1.983 billion liters — 112 million liters more than the previous year, representing growth of 6.0% — topping even the 5.7% rate for 2021, a year considered an outlier by the industry,” relayed Fabio Humberg, Abrafati’s director de comunicação e relações institucionais, in an email to CW.

“The 2024 volume — of nearly 2 billion liters — represents the best result in the historical series and has already made Brazil the world’s fourth largest producer, surpassing Germany,” Humberg observed.

Regional Growth Nearly Flat

Across the Latin American region, GDP growth is nearly flat at just over 2%, according to the United Nations’ Economic Commission for Latin America and the Caribbean (ECLAC). “In 2024, the region’s economies expanded by an estimated 2.2%, and for 2025, regional growth is projected at 2.4%,” reckoned ECLAC Economic Development Division analysts in the Preliminary Overview of the Economies of Latin America and the Caribbean, issued in late 2024.

“While projections for 2024 and 2025 are above the average for the decade, economic growth will remain low. Average annual growth for the decade 2015–2024 stands at 1%, pointing to stagnant per capita GDP during that period,” the report noted. The countries of the region are facing what ECLAC has termed “a trap of low capacity for growth.”

Sub-regional growth has been uneven, and this trend continues, ECLAC suggests. “At the subregional level, both in South America and in the group comprising Mexico and Central America, growth rates have slowed from the second half of 2022. In South America, the slowdown is more pronounced when Brazil is not included, as that country pushes up the overall subregional GDP growth rate owing to its size and better performance; growth is increasingly dependent on private consumption,” the report notes.

“This estimated weak performance suggests that in the medium term, Latin American and Caribbean economies’ contribution to global growth, expressed in percentage points, will be almost halved,” the report suggests.

Data and conditions for key countries in Latin America follow.

Brazil

The sharp increase in the consumption of paint and coatings in Brazil during 2024 was supported by 3.2% general economic growth in the country. The GDP forecast for 2025 is slower, at 2.3%, according to projections by ECLAC. World Bank projections are similar for Brazil.

By paint industry segment, Brazil’s performance was strong across the boards, led by the automotive segment. “There was growth in all product lines from the paint and coatings industry [during 2024], most markedly in automotive OEM coatings, which came on the heels of a strong increase in automobile sales,” Abrafati said.

Brazil’s sales of new vehicles including buses and trucks surged by 14% in 2024 to a 10-year high, according to the Associacao Nacional dos Fabricantes de Veiculos Automotores (Anfavea). Full-year sales amounted to 2.63 million vehicles in 2024, returning the country to a global ranking of eighth largest among markets, according to the organization. (See CW 1/24/25).

“Automotive refinish coatings also saw sales grow at a rate of 3.6%, due to both an increase in new car sales – which has effects on used car sales and on spending on repairs in anticipation of those sales – and the higher level of consumer confidence,” Abrafati observed.

Decorative paints also continued displaying great performance, with a record volume of 1.490 billion liters (up 5.9% from the previous year), Abrafati calculates. “One of the reasons for that good performance in decorative paints is the consolidation of a trend towards people taking care of their homes, so as to make them a place of comfort, refuge and well-being, which has been around since the pandemic,” Abrafati suggested.

“Adding to that trend is an increase in consumer confidence, as consumers feel they have greater job and income security, which is key to them deciding to spend on a fresh coat of paint on their property,” Abrafati executive president Luiz Cornacchioni explained in the note.

Industrial coatings also posted strong growth, boosted by government development programs begun in late 2023 under President Luiz Inácio Lula da Silva.

“Another highlight of 2024 was the performance of industrial coatings, which grew in volume by more than 6.3% relative to 2023. All segments of the industrial coatings line exhibited high growth, particularly thanks to strong sales of consumer durables and advancements in infrastructure projects (stimulated by factors like the election year and contracts awarded to the private sector),” Abrafati noted.

Infrastructure is a key focus of the government’s New Growth Acceleration Program (Novo PAC), a $347 billion investment plan aimed at infrastructure, development, and environmental projects, which are aimed to develop all regions of the country more evenly (See CW 11/12/24).

“Novo PAC involves a strong partnership between the federal government and the private sector, states, municipalities, and social movements in a joint and committed effort towards ecological transition, neo-industrialization, growth alongside social inclusion, and environmental sustainability,” states the presidential website.

The largest players in the paint, coatings and adhesives market (NAICS CODES: 3255) include these five, according to Dunn & Bradstreet:
• Oswaldo Crus Quimica Industria e Comercio, based in Guarulhos, Sao Paulo state, with annual sales of $271.85 million.
• Henkel, based in Itapevi, Sao Paulo state, with $140.69 million in sales.
• Killing S/A Tintas e Adesivos, based in Novo Hamburgo, Rio Grande Do Sul state, with $129.14 million in sales.
• Renner Sayerlack, based in Sao Paulo, with $111.3 million in sales.
• Sherwin-Williams do Brasil Industria e Comercio, based in Taboao Da Serra, Sao Paulo state, with $93.19 million in sales.

Argentina

Argentina, which neighbors Brazil among the Southern Cone countries, is poised to return strong growth of 4.3% this year on the heels of a 3.2% contraction during 2024, largely a function of the draconian economic guidance of President Javier Milei. This GDP projection by ECLAC is less optimistic that the The International Monetary Fund prediction of a 5% growth rate for Argentina in 2025.

A regrowth period for housing in Argentina is expected to swell demand for architectural paints and coatings (See CW 9/23/24). One key change in Argentina is the end of rent increase and lease term control for the residential real estate market. In August 2024, Milei threw out the 2020 Rental Law instituted by the former
leftist administration.

Refurbishing the apartments that have returned to the open market could prove a boost for architectural coatings to a value of nearly $650 million by the end of 2027 after growing at a compound annual growth rate (CAGR) of around 4.5% during the five-year period between 2022 and 2027, according to a study by IndustryARC.

The largest paint and coatings companies in Argentina, per D&B, include:
• Akzo Nobel Argentina, based in Garín, Buenos Aires province, sales undisclosed.
• Ferrum S.A. de Ceramica y Metalurgia, based in Avellaneda, Buenos Aires, with sales of $116.06 million per year.
• Chemotecnica, based in Carlos Spegazzini, Buenos Aires, sales undisclosed.
• Mapei Argentina, based in Escobar, Buenos Aires, sales undisclosed.
• Akapol, based in Villa Ballester, Buenos Aires, sales undisclosed.

Colombia

Recovering growth in Colombia is predicted for 2025 at 2.6% compared with 1.8% in 2024, according to ECLAC. This will bode well primarily for the
architectural segment.

“Domestic demand will be the main driver of growth over the next two years. Goods consumption, which saw a partial recovery in 2024, will expand strongly in 2025 due to lower interest rates and higher real incomes,” write analysts at BBVA in a March 2025 outlook for the country.

Infrastructure development, which is beginning to boom, will also lift demand for industrial coatings. Major projects, like the new Cartegena airport, is slated for construction start during the first half of 2025.
“The government’s focus on infrastructure, including transportation, energy and social infrastructure (schools and hospitals), will remain a central pillar of the economic strategy. Significant projects include road expansions, metro systems and port modernization,” report analysts at Gleeds.

“The civil works sector continued to surprise by growing 13.9% in the second quarter of 2024 in its seasonally adjusted series, following five consecutive quarters of contraction. However, it remains the most lagging sector in the entire economy, standing 36% below pre-pandemic levels,” Gleeds analysts add.

The largest players in the market as ranked by D&B are the following:
• Compania Global de Pinturas, based in Medellin, Antioquia department, with $219.33 million in annual sales.
• Invesa, based in Envigado, Antioquia, with $117.62 million in sales.
• Coloquimica, based in La Estrella, Antioquia, with $68.16 million in sales.
• Sun Chemical Colombia, based in Medellin, Antioquia. with $62.97 million in sales.
• PPG Industries Colombia, based in Itagui, Antioquia, with $55.02 million in sales.

Paraguay

Among the countries in Latin America expected to grow most rapidly is Paraguay, which is projected to expand its GDP by 4.2% this year, following growth of 3.9% last year, ECLAC reports.

“GDP in Paraguay is estimated to be $45 billion at the end of 2024 in GDP current price terms. Looking ahead to 2025, projections suggest Paraguay’s 2025 GDP estimate could be $46.3 billion. The economy of Paraguay has grown at an average annual growth rate of 6.1% in the last four years and is ranked the 15th largest economy in Americas, ahead of Uruguay,” reports World Economics, the London-based analysts.

Small manufacturing continues to be a large part of the Paraguay economy. “BCP [Paraguay Central Bank] estimates that [2025] will be prosperous for the industry in Paraguay, with emphasis on the maquila sector (assembly and finishing of products). The outlook for the industry as a whole is 5% growth” reported H2Foz, in December 2024.
Infrastructure investment will further enable manufacturing in Paraguay.

“The OPEC Fund for International Development (in January) announced that it is providing a $50 million loan to Paraguay to co-finance the rehabilitation, upgrading and maintenance of National Route PY22 and access roads in the north Paraguayan department of Concepción. Co-financed with a $135 million loan from CAF (Development Bank of Latin America and the Caribbean),” reported Middle East Economy.

Roads and new hotel construction will help Paraguay expand its tourism industry, which is growing rapidly, with over 2.2 million visitors, according to a report from the Paraguayan Secretariat of Tourism (Senatur). “The data, compiled in collaboration with the Directorate of Migration, reveals a substantial 22% increase in visitor arrivals compared to 2023,” reports Resumen de Noticias (RSN).

The Caribbean

As a subregion, the Caribbean is expected to show growth of 11% this year, compared with 5.7% in 2024, according to ECLAC (See ECLAC GDP projection chart). Out of the 14 countries that are considered part of the sub-region, Guyana is pegged to show abnormal growth of 41.5% this year, compared with 13.6% in 2024, thanks to the rapidly expanding offshore oil industry there.

The World Bank reports Guyana oil and gas resources at “over 11.2 billion oil-equivalent barrels, including an estimated 17 trillion cubic feet of associated natural gas reserves.” Multiple international oil companies are continuing to make large investments, which led to the 2022 start of the oil production rush in the country.

The resulting windfall of revenue will help create new demand for all paint and coatings segments. “While, historically, Guyana’s GDP per capita was among the lowest in South America, extraordinary economic growth since 2020, averaging 42.3% over the last three years, brought GDP per capita to over $18,199 in 2022, from $6,477 in 2019,” the World
Bank reports.

The largest paint and coatings players in the sub-region, according to a Google AI search, include:
• Regional Players: Lanco Paints & Coatings, Berger, Harris, Lee Wind, Penta, and Royal.
• International Companies: PPG, Sherwin-Williams, Axalta, Benjamin Moore and Comex.
• Other notable companies include R.M. Lucas Co. and Caribbean Paint Factory Aruba.

Venezuela

Venezuela has been a political outlier in Latin America for many years, despite the country’s oil and gas wealth, under the rule of President Nicolás Maduro. ECLAC predicts that the economy will grow by 6.2% this year, compared with 3.1% in 2024.

The Trump administration may be throwing cold water on that growth prediction with the late March announcement that the United States will impose a 25% import tax on any country importing Venezuelan oil, which accounts for an estimated 90% of the country’s economy.

The tax announcement came on the heels of the March 4 cancellation of Chevron’s license to find and produce oil in the country. “If this measure is extended to other companies – including Spain’s Repsol, Italy’s Eni, and France’s Maurel & Prom – Venezuela’s economy could face a sharp decline in crude oil production, reduced gasoline distribution, a weaker foreign exchange market, devaluation, and soaring inflation,” reckons Caracas Chronicles.

The news organization cites a recent outlook adjustment from Ecoanalítica, which “projects a 2% to 3% contraction in GDP by the end of 2025, with a 20% decline in the oil sector.” The analysts continue: “All signs suggest that 2025 will be even more challenging than initially expected, with a sharper short-term drop in production and a decline in oil revenues.”

Among leading importers of Venezuelan oil is China, which in 2023 bought 68% of the oil exported by Venezuela, according to a 2024 analysis by the US Energy Information Administration, reports EuroNews. “Spain, India, Russia, Singapore and Vietnam are also among the countries receiving oil from Venezuela, the report shows,” the news agency reports.

“But even the United States – despite its sanctions against Venezuela – buys oil from that country. In January, the United States imported 8.6 million barrels of oil from Venezuela, according to the Census Bureau, out of roughly 202 million barrels imported that month,” EuroNews pointed out.

Domestically, the economy is still focused on improvements to housing, which should increase demand for architectural paints and coatings. In May 2024, the Venezuelan government marked the 13th anniversary of its Great Housing Mission (GMVV) program, celebrating the 4.9 millionth home delivered to working-class families, reports Venezuelanalysis. The program has a goal of building 7 million homes by 2030.

While Western investors may be shy about increasing exposure in Venezuela, multilateral banks are supporting infrastructure projects, including the Development bank of Latin America and the Caribbean (CAF).