THE PAINT AND COATINGS INDUSTRY Paints and coatings are used to protect substrates against mechanical, chemical,

and atmospheric influences. At the same time, they serve to decorate and color buildings, industrial plants, and utensils. 1. S U M M A R Y a. About the paint and coating: The paint and coatings sector manufactures a variety of products that preserve, protect, and beautify the objects to which they are applied. Paints and coatings can be categorized according to their use into three major groups: Architectural coatings include all shelf goods and stock type coatings that are formulated for normal environmental conditions and general applications on new and existing structures. These coatings include interior and exterior house paints and stains, as well as under coaters, sealers and primers. Product coatings are paints sold to and used by original equipment manufacturers (OEM). Paint consumers in this sector include producers of wood furniture and fixtures, metal containers, automobiles, machinery, metal furniture, metal coil, appliances and other consumer goods. Special purpose coatings are used in automobile and machinery refinishing, , marine paints, high-performance maintenance, bridge maintenance, traffic paint, aerosol applications and other similar operations. b. Trend The paint and coatings manufacturing industry has been going through a period of consolidation, marked by a large number of mergers, acquisitions, and spin-offs during the last decade. Although hundreds of small- and medium-sized private firms continue to operate on local and regional levels, consolidation will likely continue due to shifting market dynamics. c. Market categories & Economies of Scale Worldwide production of paint and coating was estimated to be $35 billion in 1990 with American firms manufacturing almost 40% of total. o Architectural coating was the largest making up 38% of the market. o Original equipment manufacture (OEM) product coating made up 32% of the 1990 U.S. market, and o Special purpose coating and allied products made up 30%. In 2003, o 53% of the gallons of paint and allied products sold were architectural coatings. o 27% were industrial coatings. (OEM) o 10% were special purpose coatings and 10% were allied products. In 2008, Worldwide production of paint and coating was estimated to be $87 billion. In 2009 U.S production of paint and coating was almost 988 Million Gallons which made up $15 Billion. o 59% of the gallons of paint and allied products sold were architectural coatings. o 25% were OEM finishes. o 16% were special purpose coatings.

In 2009 worldwide production of paint and coating were almost 25 Million tons which made up $82 Billion. Architectural coatings was almost 10 million tons (2.6 Billion Gallons) and made up 32 Billion Dollars Paint and coating industry of a predicted yearly growth rate of 2-5% over the next 10 years. 2. COMPETITION a. In the world - Overview Three geographic areas-the United States, Europe, and Asia/Pacific-dominate the paint and coatings industry.
45% 40% 35% 30% 25% 20% 15% 10% 5% 0%

Paint and Coating Industry Global Demand - 2009

39% 29% 24%

7%

Asia Pasifi

Europe

Americas

Rest of the world

Architectural Coating- 2009

40% 35% 30% 25% 20% 15% 10% 5% 0% Europe Americas Asia Pasifi Rest of the world 7% 36% 31% 26%

Currently, the top ten paint producers in the world account for one third of total output, boasting a 60% market share. Paint and Coating Industry Top Manufacturers - 2009 Worldwide United States Sherwin1 Akzo Nobel/ICI 1 Williams PPG/Sigma PPG/Sigma 2 Kalon 2 Kalon Sherwin3 Williams 3 Valspar 4 DuPont 4 Masco 5 BASF 5 Akzo Nobel/ICI 6 RPM 6 DuPont 7 Valspar 7 RPM 8 Sika 8 Comex 9 Kansai 9 Bejamin Moore 10 Nippon 10 BASF b. United States

The total number of U.S. companies participating in the sale of paint and coatings is currently estimated to be between 600 and 800. Even though the number of U.S. paint and coatings manufacturers is still quite large, the U.S. paint and coatings industry is dominated by a very small number of companies. In fact, the largest four companies account for approximately one-third of all paint shipments in the United States, while the largest 10 companies account for 70% of the market share in the sale of paint and coatings. c. Europe i. Germany In 1990, German paint production was approximately 12% of world total at $4.3 billion. Leading Firms: BASF Caparol (DAW) STO Brillux ii. The Netherlands The Netherlands is the second big player in Europe in terms of manufacturing of the paint and coating. Leading Firms: Akzo Nobel Sigma kalon (PPG) iii. The United Kingdom ICI was the largest paint company in the UK. Akzo Nobel purchased ICI. d. Asia/Pacific Japan represents the largest mature segment of the Asian/Pacific market, accounting for approximately a 10% share of the worldwide market.29 Within Japan the largest paint manufacturer is Kansai Paint Company. The Asian/Pacific market represents the geographic area currently exhibiting the largest growth rate for the paint and coatings industry. This overall growth rate is dominated by the rapid commercialization of paint and coating technology in China. i. Chine China has become the second largest paint producer and consumer in the world propelled by booming real estate, auto and shipping building sectors, according to AsiaPulse. Global paint manufacturers have moved their production capacities to China in recent years. e. Turkey The Turkish coatings industry is now ranked as the 6th largest in Europe with 850 000 tons/year production capacity and creates an industrial added value of approx. USD 2 billion. Turkey has nearly 20 large manufacturers followed by 600 medium and small size companies worldwide. Capacity usage is almost 65% in Turkish paint and coating industry.

f. Acquisitions of the Paint Industry:

In 1990 the top five companies controlled 37% of sales, and the leading 10 held just over half. In 2003, the five largest producers dominated with 51% of industry sales and the 10 largest had almost three-quarters. In 2008, the three largest producers dominated with 40 % of industry sales and 20 largest had almost four in five.

Sherwin Williams acquisitions: Pratt & Lambert, United,

Krylon, Thompson Minwax Duron Sherwin-Williams purchase of Pratt & Lambert for $400 million (sales $479 million), Duron for $253 million (sales $350 million) and Thompson Minwax for $830 million (sales $364 million) Akzo Nobels acquisitions: Courtalds Ferros powder coatings business ICI PPGs acquisitions: SigmaKalon PPGs purchase of PRC DeSoto for $513 million (sales $240 million) and the automotive refinish business of ICI Industries for $677 million (sales $368 million) and the automotive refinish business of ICI Industries for $677 million (sales $368 million) RPMs acquisition: Rust Oleum Valspars acquisition: Lilly Benjamin Moore acquisition: Berkshire Hathaway Comex acquisition: Professional Paint. BASFs purchase of the industrial coatings business of Rohm & Haas for $175 million (sales $155 million); 3. TECHNOLOGY SOLUTIONS Conventional Paint : The major components of paints and coatings are solvents, binders, pigments, and additives. In paint, the combination of the binder and solvent is referred to as the paint "vehicle." Pigment and additives are dispersed within the vehicle. The amount of each constituent varies with the particular paint, but solvents traditionally make up about 60% of the total formulation. Binders account for 30%, pigments for 7 to 8%, and additives for 2 to 3% There are four major types of coatings that exist in the marketplace. High solids coatings, The epoxy and polyurethane based coatings are currently representing the major part of the high solids coatings in the protective coatings market. Waterborne coatings, The term waterborne refers to coating systems that primarily use water as the solvent to disperse the resin. Usually, they contain up to 80% water with small amounts of other solvents, such as glycol ethers. Most regulations require waterborne coatings to have a VOC content of less than 3.5 pounds per gallon less water. Radiation curable coatings Radiation curing uses ultraviolet (UV) and electron beam (EB) electromagnetic radiation to polymerize specially formulated coatings directly on a substrate. Powder coatings. Powder coating uses 100% resin in a dry, powdered form

Breakdown by Paint Technology in 1994 United States

High Solids Coatings, 10% Pow der Coatings, 6%

Radiation curable Coatings , 0.6%

Breakdown by Paint Technology in 1999 United States

Pow der Coatings, 8.2% High Solids Coatings, 10.5% Radiation curable Coatings , 0.8%

Waterbone Coatings, 51% Conventional Coatings, 32.4%

Conventional Coatings, 18%

Waterbone Coatings, 62%

Breakdown by Paint Technology in 1999 Europe

Pow der Coatings, Radiation curable Coatings , 2% 6.5% High Solids Coatings, 9.5% Waterbone Coatings, 15%

Conventional Coatings, 67

4. CONCLUSIONS There are 5 main points. World Paint consumption per capita is approximately 6.6kg/person (10 liters /person) and Britain uses 40 liters of paint per person every year. Britain consumption should be close to EU. There are big emerging markets such a chine and India so the growth expectation of paint and coating industry will be more than 5% for each year. After first and second reason we can say the market is open to grow on for the next decade. Acquisition of the paint and coating industry in the world will continue the next decade. There are two expectation and concern about Paint and Coating business. Expectations: Performance and quality Low cost Concerns: Energy consumption Environmental contamination

REFERENCES
(1) Organic coatings: the paradoxical materials Clifford K. Schoff Schoff Associates, 4736 Magnus Drive, Allison Park, PA 15101, USA (2) Paint and Coatings Outlook for 2010 The Next GenerationCPCA Industry Conference September 20, 2009 (3) Powder coatings technology: new developments at the turn of the centuryT.A. Misev, R. van der Linde DSM Resins bv,, The Netherlands (4) Pollution prevention methods in the surface coating industry Paul M. Randall U.S. Environmental Protection Agency, Risk Reduction Engineering Laboratory, Pollution Prevention Research Branch, Cincinnati, OH 45.268 (USA)\

(5) (6) (8) (9)

J. Bailey, IndustriaE Paint and Powder, 10, 14-17 (1994).

http://www.2dix.com/pdf-2010/paint-coating-pdf.php (7) High Solids Coatings: Experience in Europe and USAby: J.M. Keijman, Technical Director Ameron International Protective Coatings Group P.O. Box 6 4191 CA GELDERMALSEN The Netherlands www.pra-world.com www.agzonobel.com (10)Agzo Nobel Annual report-2009 and 2008

(11) (13) (16) (17) (18) (19) (20) (21) (22) (23)

www.ppg.com (12)PPG annual report 2009- and 2008 www.sherwin-williams.com (14)Sherwin Williams annual reports (15)http://www.p2pays.org/ref/01/00777/toc.htm www.pcimag.com/ http://www.pcimag.com/Articles/Cover_Story/b31092a77e6a7010VgnVCM100000f932a

8c0____ http://www.icis.com/Articles/2008/05/26/9126379/asias-paints-and-coatings-marketsurpasses-europe-and-the-us.html http://www.economist.com/node/9621902 http://www.scribd.com/doc/16465230/Asia-Pacific-Paint-Coatings-Market-Feb09 http://www.bosad.org/ http://www.painthelpers.com/index.htm?gclid=CPOa1OGczqUCFcnc4AodPVUkkA# http://www.allbusiness.com/personal-finance/investing/618265-1.html

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