INTERNATIONAL SCENARIO governing Paint Industry
The global demand for paint is estimated at over 21mtpa. At valued at about $60 bn. The industry is expected to grow at 3% over the next few years. The high growth regions are the developing countries of Southeast Asia and Latin America. While the mature markets of North America and Western Europe are likely to witness very low growth.
The share of industrial paint is 70% and rest is accounted by decorative segment. Also, almost 60% of the world market.
The largest player is ICI of UK with a share of around 10% followed by Akzo-Nobel (Netherlands), PPG (US), NIPPON (JAPAN), BASF (GERMANY), KANSAI (JAPAN). Over the last few years the industry has been consolidating with an objective to strengthen the product lines and distribution chains.
This has led to series of mergers and acquisitions. India’s market is only 0.65 mn tones, roughly 2.7% of world demand, but is growing at annual clip of 10%.
THE WORLD COATING SCENARIO:
The total output of the world paint and manufacturing industry was valued at $54 billion in 1996. The industry supported some 12,250 active firms. This industry is expand to forecast 3.5 percent annually to nearly 26 million tones. By the year 2002 the valued will be $72 billion.
Tonnage gains in the industrial coating segment will be constrained by a shift in trend towards higher solid coatings (such as powder coatings), which often weigh less per kilo than solvent brone coatings, and require generally fewer, thinner coats.
On the other hand, the architectural segment is seeing a continuous shift towards water-based paints, which weigh more than their solvent-brone counter parts, and will promote stronger tonnage gains. These trends have evident around the world but have had the most impact in more mature markets.
Most of developed world has already effected such as switch to water-based formulations for most architectural applications. The developing world is also experiencing this trend- India included.
The world paint and coatings industry is becoming increasingly dominated by a small group of highly focused, globally positioned firms. For many of these companies (E.g. Sherwin Williams, Kansai Paints, and Nippon Paints) coating represents the primary line of business.
In other cases (e.g.; AKZO NOBEL, ICI, HOECHST DUPONT and COURTALDS) the firm strong position has arisen from involvement in various upstream petro chemical activities, including production of many of basic raw material used in coating production.
The most rapid gain in paints and coatings production will be registered in the developing regions of Latin America and Asia-Pacific. Although the Asia Pacific region hold the long term prospects as a market for paints and coating, regional production has been lower, primarily due to financial crises has hit this region. However, India was not severely affected by this crisis.
The wave of currency devaluation and shape rise in interest rate will seriously dram pen spending in key paint sector such as construction and durable in short term, particularly in Indonesia, South Korea and Thailand. India, in a earlier budget have announce a new housing policy, which should result in boom for the construction sector, which will boost demand for architectural coatings.
A very interesting trend is emerging in the architectural coatings segment, we are experiencing a shift from solvent based coating to water based coatings. Water based coatings now account for most of house-hold paint demand in developed countries and is gaining ground in developing countries too.
During 1990’s, the drive has spread to industrial and specialty coatings segment. The higher performance standards for industrial coatings have necessitated intense product reformulation efforts, leading to a number of alternatives technologies.
Meeting environmental regulation is another challenge for paint companies in developed world. Even companies in developed regions should be prepared in this area, as paint product as soon adopting global standards, hence all paint companies will have to comply the environmental regulations.
Global trend towards free trade will have an impact on product mix, since exported goods must meet the environmental codes of the target market. The formation of trading blocks like NAFTA will involve the establishment of more environmental regulation of member nations.
Global production of paint and coatings can be divided in two broad sectors: Architectural Paint and Industrial Coatings.
In 1996 Architectural Paint accounted for 58% of the total output with the industrial coatings accounting for the remainder. However, the industrial coating segment is slightly larger in value (Dollar) terms because industrial coating trends to cost significantly more than architectural paint.
In 1998, the worlds top ten Paint and coatings suppliers accounted for nearly 42 percent pf the market. The next ten producers accounted to additional 13 percent of sales, which gives a top 20 firms a collective market share of over 50 percent.
The most basic division is between architectural coating and industrial coating. AKZO NOBEL, the world’s top player has a strong presence in both the segments. (60:40 in favor of industrial coating) Sherwin William, ICI, Asian Paints, and Benjamin Moore focus primarily on architectural paint. Whereas PPG, KANSAI Paint, courtyards, NIPPON Paint and RPM focus heavily on the industrial segment. BASF, DUPOINT, LILY industries and DAI NIPPON focus entirely on industrial coatings.
Globally Industrial paint are the major segment accounting for around 70% of the market, global trade is overall sparse, due relatively simple technology, and especially to maintain high inventory and the dealer level and high transportation cost. Per capita consumption is 26 kg in the USA, 4 kg in Philippines and 16 kg in Taiwan.
The global demand for paint is estimated at over 21mtpa. At valued at about $60 bn. The industry is expected to grow at 3% over the next few years. The high growth regions are the developing countries of Southeast Asia and Latin America. While the mature markets of North America and Western Europe are likely to witness very low growth.
The share of industrial paint is 70% and rest is accounted by decorative segment. Also, almost 60% of the world market.
The largest player is ICI of UK with a share of around 10% followed by Akzo-Nobel (Netherlands), PPG (US), NIPPON (JAPAN), BASF (GERMANY), KANSAI (JAPAN). Over the last few years the industry has been consolidating with an objective to strengthen the product lines and distribution chains.
This has led to series of mergers and acquisitions. India’s market is only 0.65 mn tones, roughly 2.7% of world demand, but is growing at annual clip of 10%.
THE WORLD COATING SCENARIO:
The total output of the world paint and manufacturing industry was valued at $54 billion in 1996. The industry supported some 12,250 active firms. This industry is expand to forecast 3.5 percent annually to nearly 26 million tones. By the year 2002 the valued will be $72 billion.
Tonnage gains in the industrial coating segment will be constrained by a shift in trend towards higher solid coatings (such as powder coatings), which often weigh less per kilo than solvent brone coatings, and require generally fewer, thinner coats.
On the other hand, the architectural segment is seeing a continuous shift towards water-based paints, which weigh more than their solvent-brone counter parts, and will promote stronger tonnage gains. These trends have evident around the world but have had the most impact in more mature markets.
Most of developed world has already effected such as switch to water-based formulations for most architectural applications. The developing world is also experiencing this trend- India included.
The world paint and coatings industry is becoming increasingly dominated by a small group of highly focused, globally positioned firms. For many of these companies (E.g. Sherwin Williams, Kansai Paints, and Nippon Paints) coating represents the primary line of business.
In other cases (e.g.; AKZO NOBEL, ICI, HOECHST DUPONT and COURTALDS) the firm strong position has arisen from involvement in various upstream petro chemical activities, including production of many of basic raw material used in coating production.
The most rapid gain in paints and coatings production will be registered in the developing regions of Latin America and Asia-Pacific. Although the Asia Pacific region hold the long term prospects as a market for paints and coating, regional production has been lower, primarily due to financial crises has hit this region. However, India was not severely affected by this crisis.
The wave of currency devaluation and shape rise in interest rate will seriously dram pen spending in key paint sector such as construction and durable in short term, particularly in Indonesia, South Korea and Thailand. India, in a earlier budget have announce a new housing policy, which should result in boom for the construction sector, which will boost demand for architectural coatings.
A very interesting trend is emerging in the architectural coatings segment, we are experiencing a shift from solvent based coating to water based coatings. Water based coatings now account for most of house-hold paint demand in developed countries and is gaining ground in developing countries too.
During 1990’s, the drive has spread to industrial and specialty coatings segment. The higher performance standards for industrial coatings have necessitated intense product reformulation efforts, leading to a number of alternatives technologies.
Meeting environmental regulation is another challenge for paint companies in developed world. Even companies in developed regions should be prepared in this area, as paint product as soon adopting global standards, hence all paint companies will have to comply the environmental regulations.
Global trend towards free trade will have an impact on product mix, since exported goods must meet the environmental codes of the target market. The formation of trading blocks like NAFTA will involve the establishment of more environmental regulation of member nations.
Global production of paint and coatings can be divided in two broad sectors: Architectural Paint and Industrial Coatings.
In 1996 Architectural Paint accounted for 58% of the total output with the industrial coatings accounting for the remainder. However, the industrial coating segment is slightly larger in value (Dollar) terms because industrial coating trends to cost significantly more than architectural paint.
In 1998, the worlds top ten Paint and coatings suppliers accounted for nearly 42 percent pf the market. The next ten producers accounted to additional 13 percent of sales, which gives a top 20 firms a collective market share of over 50 percent.
The most basic division is between architectural coating and industrial coating. AKZO NOBEL, the world’s top player has a strong presence in both the segments. (60:40 in favor of industrial coating) Sherwin William, ICI, Asian Paints, and Benjamin Moore focus primarily on architectural paint. Whereas PPG, KANSAI Paint, courtyards, NIPPON Paint and RPM focus heavily on the industrial segment. BASF, DUPOINT, LILY industries and DAI NIPPON focus entirely on industrial coatings.
Globally Industrial paint are the major segment accounting for around 70% of the market, global trade is overall sparse, due relatively simple technology, and especially to maintain high inventory and the dealer level and high transportation cost. Per capita consumption is 26 kg in the USA, 4 kg in Philippines and 16 kg in Taiwan.