Paints and Coatings Market: Competitive Scenarios in different Regions and Sustainable Actions
Coronavirus or COVID-19 is currently in a hot trend as it has become a pandemic and has affected thousands of lives and the global economy at a tremendous rate. Started from China, it has now spread in all five continents, and most of the governments’ have taken the decision to block international transportation to further stop the spread of the COVID-19. The stock markets in India, France, Germany, Russia, UK, USA, Argentina, Brazil, etc. have shown the red mark and very high declining trend in double digits in the last two months. The fear among the investors and the public in different nations due to novel coronavirus and blockage of the international transport & trade is creating heavy losses to the global economy and lives. The current situation requires no panic and high support among the public and the countries to stop this pandemic. This can only be solved by Collaboration among the nations. This pandemic has shown the world how human health can be a big cause of destruction and only collaboration and group support can be helpful to stop this virus and save humankind.
Nature has always shown hints and given clues to human beings to not play with the environment. The increasing global warming and pollution have become a concern among countries and corporations. Governments of the countries & intergovernmental organizations like the United Nations are creating awareness and strict laws & regulations are supporting the sustainable production and usage of sustainable products to save the environment. Paints and coatings which either symbolically beautify every product and/or protect them from the external environment, are one of the biggest markets which have started contributing to sustainable products in the last decade. According to my research, in 2019, the global “paints and coatings market” (hereafter in the article referred to as “market”) is estimated to value about USD 152 billion and the top 10 manufacturers accounted for the market share of about 48% globally.
In 2019, the Asia-pacific market is estimated to be the leading market followed by the European, North American, Middle-East & African (MEA), and South American region respectively. There are more than thousands of paints and coatings manufacturers across these regions, however, European, North American, and South American regional markets were mostly consolidated by the big players whereas Asia-Pacific & MEA regional market share represented scattered and highly competitive market by a large number of local players. Let’s check the comparison of 2018 vs 2019(estimated) paints and coatings market shares by region.
The Asia-pacific market is very competitive, with many small manufacturers (more than thousands). The local manufacturers have more cost advantage and higher bargaining power than the international players. However, the big manufacturers have a brand advantage and a threat to the new entrants in the region. Mergers and acquisitions are also playing a big role in gaining a higher market share in the region. In 2019, most of the companies have acquired revenue. However, the market share has decreased, as it suggests that the small players have shown higher revenue too. The increase in bio-based and no-VOC coatings products has also given the opportunity to new and small players in the region.
The European market is consolidated, and the top 13 manufacturers accounted for over 65% of the regional market share in 2019. The competition among the top players is also very high, with most of them having a global presence. The follow of strict regulations and the increase in demand for eco-friendly paints & coatings products have given an advantage to these global players to acquire a higher market share with their sustainable products and innovative solutions. The local manufacturers have an advantage in some countries where they have high dominance and presence, and they have the cost advantage and brand advantage too. Some local players have a specific coatings market presence based on their specialty coatings in a few end-user applications markets. By end-user industries, the market share by manufacturers differs in the European countries. Local players are showing high competition with the big international manufacturers.
The North American market is highly consolidated as the top 10 manufacturers accounted for over 84.5% of the regional market share in 2019. The global top player Sherwin Williams dominated the market with more than 28% of the regional market share followed by PPG Industries. These two manufacturers together accounted for about 50% of the regional market. The other local manufacturers are also giving significant competition to these big global manufacturers. The region has strict environmental regulations regarding quality and VOC emission in the region. The top players, as well as small players, are strictly following the rules. Production, as well as sales, of waterborne paints and coatings & zero or No-VOC paints & coatings products have continuously increased (CAGR during 2014–19 of approx 3.7% and 4.15% respectively) with a limited or declining usage of solvent-borne paints and coatings products.
The South American market is highly consolidated as the only top 8 manufacturers accounted for over 73.5% of the regional market share in 2019. Sherwin Williams dominated the market with more than 25 % of the regional market share followed by PPG Industries and AkzoNobel. The local manufacturers are also having significant competition. The economic scenario in the region has shown high volatility in the last 5 years and country like Venezuela has shown heavy political crisis which has affected the market and economy at a high declining rate. The countries like Colombia, Chile, Peru, etc. have been affected by the neighboring countries' political crisis. However, these countries have shown positive growth in the buildings and infrastructural growth in the last five years and have a high potential market in the future.
Middle-East & Africa
The Middle-East & African market is highly competitive with a large number of small manufacturers and international players. The top 10 manufacturers accounted for over 37% of the regional market share in 2019. The Jazeera Paints, Jotun, PPG, and National Paints Factories Co Ltd. are among the top 4 manufacturers in the regional market. In the Saudi Arabia market, National Paints Factories Co. Ltd accounted for the highest market share followed by Jazeera Paints and Jotun. For each end-user industry, the market share by companies has different scenarios, as Jotun accounted for the highest market share in the protective coatings, general industrial coatings, and transportation coatings (which includes marine coatings).
Sustainable actions and programs by Top 3 Paints & Coatings manufacturers
Sherwin Williams started contributing towards a sustainable environment by implementing ISO 14001 International Environmental Standard to its sites in 2001. As of 2018, out of 128 Manufacturing & distribution sites, 44 manufacturing & distribution sites were ISO 14001 certified, which was 27 in 2014 out of 77 manufacturing & distribution sites. [ISO 14001 Certification is achieved and maintained through independent registrars and requires demonstrated conformance to the ISO 14001 core principles: compliance with legal requirements, prevention of pollution, and continual improvement].
S-W Cares was launched in 2017 and has been supporting the following principles as per Environmental Health and Safety & Regulatory Affairs (EHS & RA):
The company has continuously worked towards innovations and sustainable development.
The following table shows how Sherwin Williams has performed through its sustainable action:
(2017a- Sherwin Williams and Valspar together after the acquisition of Valspar on June 1, 2017. *The 2020 goal is based on a 2.5% annual reduction from the 2017 baseline value. **Goal 2.0% reduction per year from 2017 baseline. ***The 2020 goal is based on a 5% annual reduction from the new 2017 baseline value.)
The company has also contributed through charitable giving. Annually, through the Color a Brighter Tomorrow Employee Pledge Campaign, more than USD 700,000 is being donated to non-profit organizations. In 2018, the amount by Operating Division's donations was USD 4,629,990, whereas the amount from employee matching fund submission was USD 1,661,770, a significant increase from 2017. Sherwin Williams Foundations' grants amounted to USD 1,166,967, an increase of about 63% from the previous year. In 2018 alone, Sherwin-Williams donated 9,000 gallons of paint and its employees volunteered nearly 34,000 hours of their time to make a colorful impact in their communities.
PPG launched a new set of goals in 2018 as per their current business portfolio and the current scenario.
Most of the manufacturing processes in PPG Industries are not energy-intensive, but they are committed to reducing their energy consumption such that it minimizes their greenhouse gas (GHG) emissions, reduces costs, and creates more efficient facilities. In 2018, more than 180 solar panels were installed on their three buildings at Aerospace Applications Support Center in Tullamarine, Australia. It can provide 70,000 kilowatt hours of power. This installation of panels reduces the center’s annual electricity consumption by 27 percent and also the related costs by 38 percent.
As of 1st Jan 2019, in the Colorful Communities Program, 11,150 enthusiastic employees and community volunteers contributed about 74,000+ volunteer hours. 204 projects completed in 30 countries by transforming the infrastructure of playgrounds, classrooms, and community spaces in need of brightness. About 21,790 gallons (i.e. more than 82,480 liters) of PPG paint products were used to protect and beautify the community.
AkzoNobel believes in creating a sustainable future by empowering People, reducing the impact on the Planet, and consistent innovation towards sustainable Paints & Coatings solutions for their customers. The following table shows the sustainable performance of the company:
By constant innovation and sustainable production, the company aims to maintain eco-premium solutions at a sustainable 20% of revenue through 2020, which will also help in driving margin improvement and revenue growth.
AkzoNobel's has started the initiative through the Paint the Future start-up challenging innovation program which is designed to connect the company to new disruptive technologies and to accelerate innovation where the demand for sustainable and eco-friendly products has become the necessity for the changing environment.
The company also contributes through its community program initiatives. It has made a global impact through more than 12,039 volunteers, over 2,289 projects, and more than 48,371 people trained through Lets’s Color program across the world. In India as corporate social responsibility (CSR) mandatory, AkzoNobel India spent INR 57.40 million (about USD 808.2 thousand) more than the prescribed amount of INR 54 million for FY 2018–19 in different CSR projects related to Education, Vocational Training, Healthcare, and Road Safety programs.
The other manufacturers like Nippon Paint, BASF SE, Axalta Coatings, Jotun, Asian Paints, Beckers Group, etc. in different regions & countries of the world are contributing towards sustainable production and eco-friendly paints and coatings products.
In general, for a thought, are these sustainable performance targets set by these manufacturers or raw material suppliers or distributors good enough for the continuous depleting and degrading environment? Are these positive sustainable impacts by the companies a temporary solution for the community or are these like a growing seed? Will the negative changes in the environment overcome by the current positive rate of sustainable practices?
Environmental problems have become a global concern, and everyone is responsible for the cause directly or indirectly. Of course, the gaining market share or increasing revenue in the country or a region or at a global level is every company’s target & dream, but that target & dream would be more beautiful & colorful if the same position is gained at a better living environment for everyone. It’s time to rise high through collaboration and perform sustainable actions at a faster rate throughout the industry value chain, whether they are raw material suppliers or other manufacturers, or the distributors to the consumers.
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