The paints and coating industry has been experiencing various technological advances. Switching from solvent-borne coatings to water-borne coatings is the major factor driving the industry. Protection along with decoration is the main purpose of paints & coatings. Majority of these are architectural coatings. Coatings help increase the life of structures, be it architectural or industrial. Increasing globalization and industrialization in emerging countries shall further drive the growth of the industry which is growing at over 6% per year. The industry has also witnessed patent fillings with the use of nano-technology in paints and coatings which shall further boost the growth of the industry.

The margins in paints and coatings industry depend on several factors such as crude oil price, economic stability, regulations, and demand from end-use segments such as architectural, automotive and industrial. The decline of crude oil price has brought instability in the raw material price of paints and coatings. This has led to increased competition between the producers of specialized coatings and bulk volume producers. Due to the economic slowdown in China, the decline in demand for paints and coatings from fresh architectural and industrial projects has been offset due to an increase in demand from repainting industry.  Itis important for firms operating in China to identify this shift in demand pattern and align their strategies accordingly.

 The manufacturing companies in the US are also affected by the slowdown in China, but a bigger cause of concern for them is the decreasing buying power in Latin America. Brazil and Argentina are witnessing recession and hence the demand for new homes and vehicles has declined. Moreover, there is slow growth in demand for new homesin in the US. This decline in demand from the architectural sector is being offset by growth in the automobile sector in the US and Canada. The automobile sector is witnessing an increase in demand since the 2008/2009 recession, there is a need to replace old vehicles as per as government regulations.

The European industry is also experiencing slowdown and speculations over Britain’s exit from the EuropeanUnion, the war in Syria and Greece default in payment of dues to the EuropeanUnion. Amid such insecure environment growth in demand for specialized coatings such as those aimed at improving energy efficiency and product life has been observed. It is important for conglomerates to shield their paints and coatings businesses from uncertainties rising due to socio-political and economic factors. In a bid to do so, major companies such as Dow, Dupont, and BASF have spun off their coatings and related products business and converted them into separate legal entities. Smaller companies are witnessing acquisitions or are merging with larger companies to stay in business. Adopting the right strategy that meets socio-political and regulatory environment in the country of operation is essential for companies to stay in business in the paints and coatings industry.

We at Prismane Consulting help paints and coatings formulators, suppliers and distributors understand the market environment in their country of operation and formulate their operating strategies accordingly.

Contact us to know more about the parameters that are affecting yourpaints and coatings business and we will help you with a solution to stay aheadin your market of competition.