Paint and Coatings – The Big Picture

The coatings industry is one of the most heavily regulated industries in the world, so producers have been forced to adopt low-solvent and solventless technologies in the past 40 years, and will continue to do so. The number of coatings producers is large, but most are regional producers, with only 10 or so large multinationals. Most of the large multinationals have expanded operations in fast-growing areas like China.

The most noteworthy trend has been consolidation, especially among the largest producers. After a decade of steady growth, production in Asia accounts for 50–55% of the total. Production and consumption are nearly identical in each country, as trade is limited to relatively small quantities of high-value product. Generally, coatings grow in tandem with the economy, so growth will continue to focus on the developing world.

The following pie chart shows world production of paints and coatings:

The major change that has taken place in the coatings industry during the last 40 years has been the adoption of new coating technologies. These new coating technologies include waterborne (thermosetting emulsion, colloidal dispersion, water-soluble) coatings, high-solids coatings, two-component systems, powder coatings, and radiation-curable coatings.

Coatings provide two primary functions—decoration and protection—that are of considerable economic importance. About 45% of the coatings produced worldwide are used to decorate and protect new construction as well as to maintain existing structures, including residential homes and apartments, public buildings, and plants and factories (referred to as “architectural” or “decorative” coatings). Another 40% of the coatings are used to decorate and/or protect industrial products (called “product finishes”). Without coatings, product lives might be shortened drastically and many products would not even be marketable.

Most of the remaining coatings, called “special purpose,” are used for miscellaneous applications such as traffic paints, vehicle refinishing, high-performance coatings for industrial plants and equipment, and protection of marine structures and vessels. These are usually applied outdoors in ambient conditions.

The coatings industry in the United States, Western Europe, and Japan is mature and generally correlates with the health of the economy, especially housing, construction, and transportation. Overall demand from 2016 to 2021 will increase at average annual rates of 3% in the United States and 2% in Western Europe. In Japan, however, consumption of coatings will experience relatively slow growth during this period, as a result of the lack of growth in major markets such as automotive OEM, machinery, and appliances.

In emerging countries, coatings are growing at a much faster rate. The best prospects for growth are in China (6–7% average annual growth in the near future), India (6.6%), Iran (4–5%), Poland (4%), and Saudi Arabia (3–4%). Total global growth should be about 4% per year. On a value basis, it is likely that growth will be even higher as a result of increased production of relatively higher-valued coatings.

Most of the major multinational coatings producers, including PPG, Akzo Nobel, Kansai Paint, Nippon Paint, BASF, Axalta (formerly DuPont’s automotive coatings), Chugoku Marine Paint, Valspar, Sherwin-Williams, and Hempel, have production in China. The multinational producers should gain even more presence in the developing world as living standards increase and per capita consumption of coatings rises.

Demand in Asia continues to rise faster than elsewhere in the world, and the region now accounts for 50–55% of global consumption on a volume basis.

Through the next five years, air pollution regulations will continue to be a driving force behind the adoption of new coating technologies. Despite the overall relatively slow growth in demand anticipated for coatings, waterborne and highsolids coatings, powders, UV curables, and two-component systems appear to have good growth prospects.

In general, environmental regulations are becoming more stringent in all regions to limit emissions of volatile organic compounds (VOCs) and hazardous air pollutants (HAPs), not only in the industrialized world, but also in developing countries like China.

The coatings industry is one of the larger consumers of solvents, which are mostly derived from petrochemical feedstocks and refinery operations. The coatings industry also uses a considerable quantity of nonpetrochemical feedstocks, such as pigments and additives, which are not very dependent on crude oil and gas prices. The nonpetrochemical portion of the feedstocks is approximately one-third, on a volume basis.

One new area of interest is nanotechnology, with tens of thousands of patents issued already just for the coatings industry. Very small ceramic or metallic particles can be added to paint formulations to modify specific properties (e.g., scratch, mar, wear, corrosion, and UV resistance) in highly specialized applications. The average size of nanoparticles is 10–70 nanometers, consisting of less than 6.5 million atoms. At these sizes, the ratio of surface area to mass becomes significant, giving the particles unique properties. For example, at 2 nanometers, the conductivity of metal particles changes and at 20 nanometers, the transparency of ceramic particles changes. At 20 nanometers, particles of gold turn red and their plasticity disappears.

Some of the futuristic applications are nanotubes for electrically conductive coatings and to increase the speed of reaction of thermosetting resins; organosilane dendrimer coatings; buckyball coatings for machine parts; and metals for conductive coatings in inks. The technology is limited mainly to highly specialized applications because of the high cost per unit volume needed to reduce the size of particles and the need to add surface modifiers to keep the particles from agglomerating. Recent research efforts have been focused primarily on functionalizing the particle surface of the nanoparticles to make them more compatible with the coating resin systems, so that easy dispersion, low viscosity, and covalent bonding between the particles and resins are achieved.