Asia Pacific Paint & Coatings Market: Back On Track?
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Transcript of Asia Pacific Paint & Coatings Market: Back On Track?
Asia Pacific Paint & Coatings MarketBack On Track?
Sheila Senathirajah (Program Manager)
Chemicals, Materials & Food Practice
31st March 2010
“ We Accelerate Growth”
© 2010 Frost & Sullivan. All rights reserved. This document contains highly confidential information and is the sole property of Frost & Sullivan. No part of it may be circulated, quoted, copied or otherwise reproduced without the prior written approval and consent of Frost & Sullivan.
2March 2010APAC Paint & Coatings
Poll Question 1
In your opinion what is the projected forecast growth for the APAC
paint & coatings market in 2010 & 2011?
• 0-5%
• 5-10%
• 10-15%
• 15-20%
3March 2010APAC Paint & Coatings
Table of Contents
33
44
11 ASIA PACIFIC ECONOMIC OUTLOOK 4
ASIA PACIFIC PAINT & COATINGS MARKET ANALYSIS 722
CONCLUSION 18
INDUSTRY HIGHLIGHTS 15
55 ABOUT PAINT FROST 22
Slide No.
4March 2010APAC Paint & Coatings
Economic Outlook
5March 2010APAC Paint & Coatings
The MarketRegions GDP (Annual Percent Change) for 2003-2013
Source: IMF(World Economic Outlook, Oct 2009)
Macroeconomic Scenario-World World Economic growth- Comparison of key economies
GDP Growth
%
GDP Growth of Key Economies
• After a deep global recession, economic growth has turned positive. •The global economy appears to be expanding again, pulled up by the strong performance of Asian economies and stabilization or modest recovery elsewhere.
6March 2010APAC Paint & Coatings
China and India
-Slower growth from their average pace
-Rebound expected in late 2009.
ASEAN:
>Indonesia and Vietnam
-Positive growth over the next two years ( lower share in advanced manufacturing and higher growth from domestic demand)
>Thailand, Malaysia and Philippines Hardest hit ( higher dependence on advanced manufacturing exports)
Japan and Korea
-long and severe recession
-extensive global financial links.
20
16
12
8
4
0
0 4 8 12 16
GDP CAGR % (2003-2008)
GDP CAGR % (2008-2013)
China
Macroeconomic Scenario – AsiaAPAC economic growth- Comparison of key economies
“Hot” spot for investments
CAGR GDP Growth
Thailand
Source: Data from IMF, Analysis: :Frost & Sullivan
India
Vietnam
Indonesia
South Korea
Japan
*Bubble indicates nominal GDP size-2008
7March 2010APAC Paint & Coatings
APAC Paint & Coating- Market Analysis
8March 2010APAC Paint & Coatings
Short Term Medium Term
Imp
act
Mar
ket
Dri
vers
Mar
ket
Res
tra
ints
Imp
act
Long Term
Stimulus Package
Low
High
Low
High
Market AnalysisMarket Drivers & Restraints
Greater Economic Growth in APAC region –Leading
economy group in the world
Continual Industrial
Relocation
Reduced Export
Demand
Rising Raw Material Prices-As a result of rising crude oil prices and
logistics cost
Unstable Political
Conditions Competing Alternative Materials
I.e: glass, steel for exterior
New technology I.e : Green chemistry
coupled with nano technology
Free Trade
AgreementsMergers &
Acquisitions
Low cost /back-end
manufacturers
Source: Frost & Sullivan
9March 2010APAC Paint & Coatings
Market Analysis Market Size By Value and Volume
APAC Paint & Coatings Market Size ( 2003-2008 )
In 2008, the APAC paint market was valued at USD 40.1 Billion with a market size of 13.6 Million MT.
2009: Witnessed a continued slowdown particularly in the first 2 quarters of the year. However, in the second half of the year, the market became to pull up especially as end use industries began to expand positively.
2009: Total APAC market estimated marginal growth only-Negative growth in most countries buffered by the positive (albeit small) growth in China and India.
2010-2011: Industry players are confident of positive industry growth numbers.
0
5
10
15
20
25
30
35
40
45
2003 2004 2005 2006 2007 2008
Value (USD Billion)
Volume (Million MT)
Source: Frost & Sullivan
•2003-2008 CAGR (Value) = 15.5%•2003-2008 CAGR (Volume) = 11.7%
10March 2010APAC Paint & Coatings
Market AnalysisCountry Placing In APAC Paint Market
Low -end Coatings High-End Coatings
Underdeveloped Market
Developed Market
Australia
Japan
South Korea
ChinaIndia
Indonesia
Rapidly developing markets for paints. A mix of high end and low cost coatings
Mature Markets
Vietnam
Thailand
Emerging Markets
•Focus is now on “Emerging markets”•Upside > high growth potential, access to technology transfer, potential consolidation. •Downside > relatively more price-conscious consumers and low end coatings
*Bubble indicates size of paint market
Source: Frost & Sullivan
11March 2010APAC Paint & Coatings
Market AnalysisPaint Market Growth Rate & Per Capita Paint Consumption
0
5
10
15
20
25
China India Vietnam Indonesia Thailand Malaysia Australia South Korea Japan
0
5
10
15
20
25
Paint Market Growth (2004-2008) Per Capita Consumption
Paint Market Growth Rate versus Per Capita Consumption
•Low paint consumption markets have a higher potential for growth from domestic demand
•High paint consumption markets typically are pioneers of new coating technologies
Pa
int
Ma
rke
t G
row
th R
ate
(2
00
4-2
00
8)
%
APAC ~ 4-4.5kg/person.
World ~6-7kg/person.
High potential Asean markets
Pe
r Ca
pita
Pa
int C
on
su
mp
tion
, Kg
/pe
rso
n
Source: Frost & Sullivan
12March 2010APAC Paint & Coatings
Market AnalysisMarket Split By Segment
Market Share By Value
• Industrial coatings-high value segment
• Largest individual segments : Decorative, Protective and Industrial Wood Coatings. Growth spurred by shift to urbanization, higher industrial growth, increased activity in the oil & gas industry and a healthy export market.
Market Share By Volume
Source: Frost & Sullivan Source: Frost & Sullivan
13March 2010APAC Paint & Coatings
Market AnalysisGrowth Rates of Key Segments
Powder CoatingsCAGR (2004 – 2010):20%
Powder CoatingsCAGR (2004 – 2010):20%
Other Industrial CoatingsCAGR (2004-2010) : 16%
Other Industrial CoatingsCAGR (2004-2010) : 16% Decorative Coatings
CAGR(2004–2010) : 9%
Decorative CoatingsCAGR(2004–2010) : 9%
Automotive CoatingsCAGR (2004-2010): 9%
Automotive CoatingsCAGR (2004-2010): 9%
Protective CoatingsCAGR (2004-1010) : 22%
Protective CoatingsCAGR (2004-1010) : 22%
Wood CoatingsCAGR (2004-2010): 19%
Wood CoatingsCAGR (2004-2010): 19%
• Protective coatings and powder coatings estimated to witness rapid growth in the future, however 2009 has been badly hit due to reduction in export demand of white goods and postponement of key construction projects.
Source: Frost & Sullivan
14March 2010APAC Paint & Coatings
Market AnalysisCompetitive Analysis
Parent Country of
Origin
Notable Tie-ups/ Joint Venture/Acquisitons Combined Market
Share in APAC
Nippon Japan Nippon 8-10%
Akzo Nobel Netherlands Akzo Nobel, ICI Paints, International Paints, Sikkens 7-9%
Kansai Japan Kansai Nerolac (India), Sime Kansai (MY) 7-9%
PPG US Ameron, Sigmakalon, Yung Chi (TW), Taubman (NZ) 3-4%
Valspar US Dongguan Lily (CH), Guangdong Huarun (CH) 2-3%
KCC Korea KCC 2-3%
Hempel US Hempel-Hai-hong (CH) 2-3%
Asian Paints India Asian-PPG (India) 1-2%
DuPont US DuPont-Shinto (JP/TW) 1-2%
Chugoku Japan Haiphong-Chugoku (VN) 1-2%
Orica Australia - 1-2%
Jotun Norway - 1-2%
SKK Japan - 1-2%
Guangdong Carpoly China - 1-2%
Wattyl Australia Taubman (Aus) 0.8-1%
•Chinese players entering the major player league
•Mergers, acquisitions-current trend
•Top 5 players are major players in decorative as well as industrial coatings
Source: Frost & Sullivan
15March 2010APAC Paint & Coatings
Industry Highlights
16March 2010APAC Paint & Coatings
The MarketRegions GDP (Annual Percent Change) for 2003-2013
Overview: -High growth but highly diversified and fragmented competitive market. -With a total production volume of 7500 thousand tone in 2009, China is primed for the top placing in world coating production and consumption. -Despite the downturn, estimated 2009 growth was at ~10% driven mainly by increase in domestic consumption and spurred by investments in infrastructure
High growth paint sectors-Powder coatings-worlds largest producer, Industrial wood, protective coatings, automotive OEM and refinish-China as hub for 3 C manufacture- good area to look at for growth.
Technology Trends- Emphasis on climate change and environmental issues: (China recently announced a 45% cut in green house gas emissions by 2010 as well as 2 major objectives in increasing energy saving rates (up to 50% by 2010))
Key legislations impacting paint industry-CCEL (China Environmental Labelling Program)
Key Regions-Yangtze River Delta, Pearl River Delta, Bohai Rim (wealthy coastal regions)- May 2006, Guangdong was officially named as the Hometown of China Coatings, which means that Guangdong plays a decisive role in the nationwide market of coatings, printing ink and adhesive
Country HighlightsChina
Rest of APAC46%
China54%
CHINA2008 Size: $21.8 Bill
Source: Frost & Sullivan
17March 2010APAC Paint & Coatings
The MarketRegions GDP (Annual Percent Change) for 2003-2013
Overview:
-Driven by domestic demand. CAGR of around 15% over the last few years
-Estimated 5% growth for 1H, 2009 and ~10% for 2H.
-Dominance of regional players acts as a barrier for new entrants to gain market share. Leaders in the organized paint industry are Asian Paints, Kansai Nerolac, Berger Paints and Akzo Nobel.
High growth paint sectors
-Decorative-more than 60% of the market value. Demand from growing middle class and increased sale of premium paints in urban areas. Also the SEZ projects commissioned by the government.
-Automotive OEM (average growth of automobile industry approximately 10-15% p.a). Chennai is the automobile capital in India (~Detroit of Asia)
Technology Trends
-Industrial paints- still mainly traditional solvent technology. However in automotive refinish, technology switch from nitrocellulose to polyurethane and in protective coating -technology switch from low cost alkyds to Epoxies and Polyurethane.
Key legislations impacting paint industry
-Currently still no mandatory standard for regulating lead in paints or VOC emissions. Based on industry players initiatives.-i.e. initiatives by Asian Paints and Kansai Nerolac
Country HighlightsIndia
Rest of APAC93%
India7%
INDIA2008 Size: $2.8 Bill
Source: Frost & Sullivan
18March 2010APAC Paint & Coatings
The MarketRegions GDP (Annual Percent Change) for 2003-2013
Overview:
-Industrial coatings segments more badly impacted compared to decorative.
-Particularly powder, protective, automotive OEM. Between 15-30% decline.
-Decorative aided by boost from stimulus packages involving construction build managed to record approximately 3-5% growth for decorative segment.
High growth paint sectors
-2010-automotive OEM and protective expected to rebound positively
Technology Trends
-Higher interest on environmental issues however more push from industry players rather than local governments.
Key legislations impacting paint industry
-Singapore- Green label
-Malaysia-recently launched GBI and Sirim Eco Label
Key Regions
-Indonesia and Vietnam expecting higher growth in 2010-2011
Country HighlightsAsean-Focus on Indo, MY, SG, TH, VN
Rest of APAC92%
ASEAN8%
ASEAN2008 Size: $3.3 Bill
SingaporeMalaysia
Source: Frost & Sullivan
19March 2010APAC Paint & Coatings
The MarketRegions GDP (Annual Percent Change) for 2003-2013
Overview:
-Decorative for new constructions and protective for industrial structures badly impacted. Slow down in demand coil, wood and can coatings.
-Maintenance/refurbishment sectors held well with the strong recovery in Q4,2009.
-2009-overall market was estimated to drop nearly 7%.
-2010-market expected to remain flat (except protective coatings displaying stronger recovery ~5%).
-2011-market is expected to growth steadily in line of the GDP growth.
-Nippon rapidly expanding in the decorating coating sector.
High growth paint sectors
-Maintenance market expected to fair better across all product segments.
-2010: Protective, auto refinish, coil, can and other industrial coatings expected to continue the strong recovery in the 4th quarter Q4,2009.
Technology Trends
-Low VOC- the technologies for low VoC paints are ready but the high cost has stalled the uptake. Customers would be compelled to switch to the products once the regulation is issued. .
Key legislations impacting paint industry
- Now new regulations regarding paints and coatings issued during the last year.
Country HighlightsAustralia and New Zealand (ANZ)
AUS/NZ5%
Rest of APAC95%
AUSTRALIA /NZ2008 Size: $1.9 Bill
Source: Frost & Sullivan
20March 2010APAC Paint & Coatings
54%
9%
45%
75%
14%
2%1%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Decorative Coatings Industrial Coatings
Waterbase Solventbase Powder UV Others
Development of Eco-friendlyCoatings
Powder Coatings
Powder Coatings
Water-Based Coatings
Water-Based Coatings
High-Solids Coatings
High-Solids Coatings
UV Cured Coatings
UV Cured Coatings
Future is Green!
Volume Percentage
Technology Split for Decorative and Industrial Coatings
Technology Highlights
Growth of Green Coatings
•Technology trend moving towards “green”: Stricter Environmental Regulations, low VOC emissions, less usage of coatings and fewer coats.
100% 100%
Green nano-coatings
Source: Frost & Sullivan
21March 2010APAC Paint & Coatings
• Though the water-based decorative coatings in Asia appears to have achieved significant market penetration, there is a marked variation across geographic markets
• In countries like Japan and Korea, there are qualified coatings manufacturers who supply coatings with superior quality and hence share of water-based coatings in the decorative market is low
• In emerging markets like China, India and SE Asia, there are numerous unqualified coatings manufacturers who supply low-end water-based coatings in the market
• Singapore is an exception in SE Asia as it is a mature market and is ahead of other countries in SE Asia in technology
• On an average, low-end/tier coatings make up approximately 40-43% of the total decorative coatings market in APAC-volume wise.
Technology Highlights
Decorative Coatings Technology -Trend in the Region
Decorative Coatings-Market share by Technology (Volume)
0 10 20 30 40 50 60 70 80 90 100
CH
TH
VN
AUS
HK
IND
INDO
JP
SK
MY
PHP
SG
TW
NZ
Waterbase Solventbase
22March 2010APAC Paint & Coatings
Key Industry Challenges:-• Global end-users shift• Price Limitation• General perception about health and
safety concern• Non availability and high cost of raw
materials• Reluctance of companies to change to
new technology• Performance limitation• Competition from other technologies• Lack of chemists and other skilled
workers
Technology HighlightsGrowth of Radiation Cure Coatings
Radiation cure coatings offer much opportunity for growth to coating manufacturers and raw material suppliers alike who are willing to invest in this technology.
Main Uses of Rad-Cure in Coatings:
• Wood coatings (flooring, cabinets and post-assembled furniture), Plastic, Flexible packaging, Interior aerospace and defense
23March 2010APAC Paint & Coatings
Enter new Markets•Create market needs through product differentiation, entering new geographies or new channels.•Invest in distribution and brand equity
Enter new Markets•Create market needs through product differentiation, entering new geographies or new channels.•Invest in distribution and brand equity
Changing Regulations
• Keep track of changing regulations and upcoming Europe chemical safety standards
• Labeling requirements
• Back up claims with scientific evidence
Changing Regulations
• Keep track of changing regulations and upcoming Europe chemical safety standards
• Labeling requirements
• Back up claims with scientific evidence
Marketing / Branding• Invest in promotion and marketing /
distribution / advertising• Plethora of opportunities-
demographics, specific health benefits, life style etc..
Marketing / Branding• Invest in promotion and marketing /
distribution / advertising• Plethora of opportunities-
demographics, specific health benefits, life style etc..
Product / R&D Trends• Sustainable• Low VOC /odour• Energy saving / efficiency• Added functionality• R&D must track developments on
consumer, packaging, formulations, processing, safety
Product / R&D Trends• Sustainable• Low VOC /odour• Energy saving / efficiency• Added functionality• R&D must track developments on
consumer, packaging, formulations, processing, safety
ConclusionCritical Success Factors
BE BOLD!!BE VISIBLE!!
BE AHEAD OF THE COMPETITION!! BE INFORMED!!
Critical Success Factors within the Paint & Coatings Industry
Critical Success Factors within the Paint & Coatings Industry
24March 2010APAC Paint & Coatings
Poll Question 2
How do you foresee the growth of Green Technology in the paint &
coatings industry for the collective APAC region within the next 5
years?
• Very High • Moderately high • Marginal• Low
25March 2010APAC Paint & Coatings
ABOUT PAINT FROST
(A Growth Partnership Service dedicated to the Paint & Coatings industry)
26March 2010APAC Paint & Coatings
www.PaintFrost.com is a one-stop-solution to get key insights on the Asia Pacific paint & coatings market.
This is a very user friendly, interactive web base service, specially designed to support your business and organizational decision-making activities.
Most comprehensive updated coverage covering 14 countries, 10 paint segments and key metrics on market size, technology, market shares and more…….
Accessible worldwide, 24/7 through a username and password
Provides unbiased independent information supported by extensive primary research and qualitative insights from paint experts who continuously track the market.
Provides history as well as future trends and forecasts for the APAC paint market
Easy to use report formats and data can be exported to Excel
Key Deliverable:
What is www.PaintFrost.com
Market Sizing
Summary Reports
Company Profiles
Growth Indicators+ + +Paint Frost =
27March 2010APAC Paint & Coatings
REGION COVERAGE-14 Countries
REGION COVERAGE-14 Countries
SEGMENTS-10 Paint Segments
SEGMENTS-10 Paint Segments
• Decorative Coatings
• Automotive OEM Coatings
• Automotive Refinish
• Industrial Wood Coatings
• Marine Coatings
• Protective Coatings
• Powder Coatings
• Coil Coatings
• Can Coatings
• Other Industrial Coatings
Deliverables cover 14 countries over 10 market segment per
country
Key Deliverables- Regions & Segments
28March 2010APAC Paint & Coatings
1. Shows you an overview of the entire APAC market in terms of volume and value & CAGR.
Data Presentation
Ideal for presentation at company meetings-especially regional based companies
2. Also provides a bar chart representation of how big each country is in relation to one another.
3. Per Capita Paint Usage is also presented. This indicates the potential of the market in relation to paint sales
29March 2010APAC Paint & Coatings
This is the type of data and how it is
presented
Data Presentation
3. Technology Split By Volume Percent
2. Competitor Split By Value Percent
4. Split By Tiers Volume& Value
*applicable for decorative market only currently
1. Market Size By Value and Volume
•4 year historical and 2 year forecast data provided
*Data can also be exported to excel.
30March 2010APAC Paint & Coatings
Next Steps
Log on to the Paint Frost website at www.paintfrost.com. Click on the ‘Contact Us’ button and leave us your details
Request a strategic approach document for a Growth Partnership Service or Growth Consulting Service to support you and your team to accelerate the growth of your company. ([email protected])
Join us at our annual Growth, Innovation, and Leadership 2010, 19-20 October 2010, Kuala Lumpur (www.frost-gil.com)
Register for Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of innovative growth opportunities (www.frost.com/news)
31March 2010APAC Paint & Coatings
Your Feedback is Important to Us
•Growth Forecasts?
•Competitive Structure?
•Emerging Trends?
•Strategic Recommendations?
•Others?
Please inform us by taking our survey.
What would you like to see from Frost & Sullivan?
32March 2010APAC Paint & Coatings
Q&A Session
33March 2010APAC Paint & Coatings
For Additional Information
Donna JeremiahCorporate CommunicationsIndustrial Technologies, Chemicals and Materials603 [email protected]
Sheila SenathirajahProgram ManagerChemicals, Materials and Food, Asia Pacific603 6207 [email protected]
Krithika TyagarajanResearch DirectorChemicals, Materials and Food, Asia Pacific(65) 6890 [email protected]
34March 2010APAC Paint & Coatings
Disclaimer
Frost & Sullivan takes no responsibility for any incorrect information
supplied to us by end-users or suppliers. Quantitative market
information is based primarily on interviews and therefore is subject to
fluctuation.
This report contains valuable and confidential market information for the use by Frost & Sullivan only
hence it is for internal use and not for general publication or disclosure to third parties.
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