asia pacific paint & coatings market - feb09
TRANSCRIPT
Asia Pacific Paint & Coatings Market
What Lies Ahead!
Sheila Senathirajah, Senior Industry Analyst
Chemicals, Materials & Food Practise
17th February 2009
“ We Accelerate Growth”
© 2009 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.
2February 2009
APAC Paint & Coatings Market
Poll Question 1
During this economic downturn, do you anticipate the APAC Paint &
Coatings industry to fair better than the Western region Paint &
Coatings industry?
• Yes
• No
3February 2009
APAC Paint & Coatings Market
Table of Contents
4
5
3
1 ASIA PACIFIC ECONOMIC OUTLOOK 3
ASIA PACIFIC PAINT & COATINGS MARKET ANALYSIS 72
MARKET DRIVERS & RESTRAINTS 12
INDUSTRY FOCUS 18
INFLUENCING END-USER INDUSTRIES 15
6 ABOUT PAINT FROST 22
Slide No.
4February 2009
APAC Paint & Coatings Market
ASIA PACIFIC ECONOMIC OUTLOOK
5February 2009
APAC Paint & Coatings Market
The MarketRegions GDP (Annual Percent Change) for 2003-2013
Impact of crisis on APAC Paint & Coatings Market
• The credit crisis has contributed to a significant shift in the 2009 regional outlook.
• Frost and Sullivan anticipates that global economy will continue to deteriorate in the first half
of 2009
• This will be followed by a slow recovery in 2H 2009
• The Paint & Coatings industry in Asia will be affected by the global slowdown although we
forecast this will not hit the region as severely as in developed countries
• In the midst of the crisis we forecast Asia will also benefit as coating companies in the US and
EU come under significant cost pressures
• This presentation will review the current crisis, its impact on the Paint & Coatings industry and
the opportunities that will be created in 2009
Macroeconomic Scenario Asia Pacific Economic Outlook
6February 2009
APAC Paint & Coatings Market
The MarketRegions GDP (Annual Percent Change) for 2003-2013
0
2
4
6
8
10
12
14
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Wor ld
Eur opean
Union
Nor th
Amer ica
China
India
SEA
Source: http://www.imf.org
(World Economic Outlook, Oct 2008)
Macroeconomic Scenario Asia Pacific Economic Outlook
GD
P G
row
th
%
GDP Growth of Key Economies
•Growth is slowing down worldwide but nonetheless, China will remain an engine for East Asia and even for global growth.
7February 2009
APAC Paint & Coatings Market
Source:edition.cnn.com/2008
Macroeconomic Scenario Crude Oil Prices
Effect of crude oil prices on the Paint industry
•Crude oil prices peaked in 2008
•More than 40% of the APAC paint industry is based on solvent based paints.
•Price increases of paint products ranged from 10-20%, higher for solvent based paints..
•Oil prices have gone down this year and this is likely to soften the price impact.
Crude oil prices 1998-2008 Crude oil prices Year 2008
8February 2009
APAC Paint & Coatings Market
ASIA PACIFIC
PAINT & COATINGS
MARKET ANALYSIS
9February 2009
APAC Paint & Coatings Market
Asia Pacific Market Size
APAC Paint & Coatings Market By Value
( 2003-2007 )
Market Situation
• 2007 APAC paint market was valued at USD 35.2 Billion at 13.0 Million tonnes
• CAGR for 2003-2007 = 15%
• 2008- Slowdown began to be felt in 2H. Q4 negative growth. Overall growth rate at only 8-10%.
• 2009- Continued slowdown. Overall estimated growth rate 5-6%.
• 2010- Market to slowly recover.
US
D B
ill
19.521.6
24.6
29.7
35.2
0
5
10
15
20
25
30
35
40
2003 2004 2005 2006 2007 Source: Frost & Sullivan
The APAC paint
market makes up
approximately 30-
35% of the global
paint market !!
10February 2009
APAC Paint & Coatings Market
Asia PacificMarket Split By Country
China
46%
Thailand
2%
Phillipines
1%
India
9%
Taiwan
2%
New Zealand
1%
Vietnam
1%
Singapore
1%Hong Kong
1%
Australia
5%Malaysia
2%
Indonesia
3%
Japan
17%
Korea
9%
Source: Frost & Sullivan
Value Split By Country Overview
China- 2nd largest market in the world after US.
Paint production has tripled in last 5 years to
approximately 6Mtonnes
India- Growth market. Decorative : Industrial
paint ratio (value) stands at 70:30.
Asean 5 -Combined represent 10% of the total
APAC market. Much of the growth is seen
coming from Thailand, Indonesia and Vietnam.
Indonesia- is forecasted to be the fastest
growing paint market in Asia over the next 2-3
years and to be the 2nd largest growth market in
Asia volume wise.
Japan- Mature and experiencing minimal growth
Korea- mainly driven by decorative, automotive
and marine coatings (~50%of entire market)
Note: Asean 5 consists of Vietnam, Thailand, Indonesia, Singapore and Malaysia
11February 2009
APAC Paint & Coatings Market
• World Paint consumption per capita is approximately 6.6kg/person
• NA and WE approximately 15-17kg/peron
• Largely untapped markets in Asia region-particularly India with its large population
and good paint market growth.
•Low paint consumption per capita in high growth market indicates there’s lots more to consume!!!
Asia PacificPaint Consumption Per Capita
11.2
4.7
15.1
22.4
2.9
10.6
2.6
14.3
6.7 6.5
11.5
1.2
9.0
2.8
0
5
10
15
20
25Australia
Chin
a
Japan
Kore
a
Phillipin
es
Mala
ysia
Indonesia
Sin
gapore
Thailand
Hong K
ong
Taiw
an
India
New
Zeala
nd
Vie
tnam
Kg
pe
r P
ers
on
Source: Frost & Sullivan
12February 2009
APAC Paint & Coatings Market
Overview
Decorative coatings
•Largest individual segment
•CAGR for 2003-2007 = 10.53%
• Industrial Coatings
•Good growth in emerging markets in
Asia region
•Due to attractive labour rates & export
demand.
Asia PacificMarket Split By Application Segment
OEM
10%
Can
2%
Coil
3%
Other
Industrial
16%
Powder
9%
Refinish
4%Marine
5%
Protec
10%
Industrial
Wood
12%
Decorative
29%
Value Split By Segment
Source: Frost & Sullivan
Industrial Coatings likely to see better
growth compared to decorative coatings.
13February 2009
APAC Paint & Coatings Market
MARKET DRIVERS & RESTRAINTS
14February 2009
APAC Paint & Coatings Market
• Continued spending in
this area to bolster and
boost economy
• Move to urbanisation
• GHS and REACH
provide a more
standardized
approach to ensuring
chemical safety.
• Newer avenues of
manufacturing hubs
become attractive
• Examples: Vietnam &
Thailand.
Greater Greater
Economic Economic
Growth in Growth in
APAC APAC
regionregion
Increased Increased
Infrastructure Infrastructure
SpendingSpending
Market Drivers
MARKETDRIVERS
Shift to Shift to
Environmentally Environmentally
friendly & Safer friendly & Safer
coatingscoatings
� APAC is fairing better
than Western economies.
� Platform of growth for
world paint industry
ContinualContinual
Industrial Industrial
RelocationRelocation
15February 2009
APAC Paint & Coatings Market
• Continued uncertainties
affects investor and
consumer confidence alike.
• Lowered demand
from Western
economies.
• Drop in production growth
as of second half 2008
• To continue till late 2009
• Uncertainty leads to
fluctuating price hikes
• Raw materials make up
50-70% of paint product
costs depending on the
technology used.
Volatility in Volatility in
Crude Oil Crude Oil
PricesPrices
Poor Poor
Economic Economic
OutlookOutlook
MARKETRESTRAINTS
Market Restraints
Unstable Unstable
Political Political
ConditionsConditions
Reduced Reduced
Export Export
DemandDemand
16February 2009
APAC Paint & Coatings Market
INFLUENCING END-USER
INDUSTRIES
17February 2009
APAC Paint & Coatings Market
Decorative Coatings
Market trend:
• ‘Green Products’ featuring low VOC & low odour
• Growth of Tinting & DIY market. ( APAC = 18% DIY , Westernised countries = 25-50%)
5.5
4.5
5.5
6.9
9.3
%
2009 GDP Growth
CAGR (2005-2012)Thousand USD
Na
1.7
0.7
0.6
0.8
2009 Per Capita Personal Disposable Income
Na
1.59
3.46
3.81
4.94
Steel ConsumptionGrowth rate (%)
Thailand
Vietnam
Indonesia
India
China
Country
• APAC region makes up approximately 30% of the global Decorative market!
• Growth influenced by GDP growth, purchasing power, construction & refurbishment industry
• Post 2007, the global market is estimated to fall by approximately 30%. Decline due to reduction in
housing construction projects.
Housing prices
dropped 8-10% in
2009 to boost real
estate market
Growth dampened
by poor global
economic outlook
and local political
tensions.
Growth Indicators
*IMF report as of Oct 08
18February 2009
APAC Paint & Coatings Market
Industrial Coatings
Protective sector to do relatively well followed by Marine segment. Demand from?
•The rising oil prices over the last year have led many oil firms to invest in oil drilling platforms.
•Also upcoming government driven infrastructure development projects.
•Continued growth of shipbuilding industry as well as trade activities. I.e: In South Korea, due to
back log of shipping orders signed in the earlier years, 2009 will show good projections. Impact
only felt next year since shipping orders for this year has really slowed down.
Automotive OEM coatings
• Heavily impacted due to reduction in car production
Industrial Wood Coatings
• Highly export market
• Sharp drop in demand from US and WE have reduced size of wood coatings market
19February 2009
APAC Paint & Coatings Market
INDUSTRY FOCUS
20February 2009
APAC Paint & Coatings Market
Technology Trends
1) Going Green
• Restricting levels of VOC’s and Eliminating use of hazardous heavy metals (lead/chromate)
• APAC ratio of solvent base and water base is 60:40
2) Smart Coatings
• Increased development into functional paints that interact with the stimuli in the environment.
• Generally requires the integration of nanotechnology.
Key Legislations
1) GHS (Globally Harmonised System of Classification and Labelling of Chemicals).
2) REACH (Registration, Evaluation, Authorisation and Restrictions of Chemicals)
Technology Trends & Key Legislation
Many countries in APAC are
on their way to
implementation.
21February 2009
APAC Paint & Coatings Market
Growth OpportunitiesFocus Countries
CHINA
THAILANDINDIA
INDONESIA VIETNAM
•Government to promote country
as a shipbuilding nation
•Growing popularity as a
manufacturing hub.
•Decorative market migrating from
low tier to mid and premium tier.
•Infrastructure Development to overhaul
standard of living
•Regional centre for Japanese OEM’s
•Technological trends towards ‘Green
products’. Thai government has
initiated the eco-car project.
APAC
FOCUS
•Key driver for paint industry growth
•Greater scope for paints usage
given the huge population and
growing affluence of Middle Class
Indians
•New foreign investment (FDI) law
•Growth in infrastructure projects
•Tagged to be the fastest growing
paint market in Asia over the next
2-3 years.
•Focus on environmentally friendly products
•Trend towards mergers and acquisitions and emergence of key local players
•Nov 08- RMB4 trillion stimulus plan to consists of massive infrastructure construction
and further financial policy adjustments.
22February 2009
APAC Paint & Coatings Market
� Despite economic slowdown, growth in Asia is expected to remain resilient.
Overall 2009 growth projected stands at only 5-6%.
� Growth of Industrial coatings is set to do better than Decorative coatings-
mainly in protective coatings segment.
� Growth to come from domestic-oriented demand stemming mainly from
infrastructure development projects set in place by local governments.
� Economic downturn tends to accelerate the elimination of small companies.
Trend towards Mergers& Acquisitions as well as emergence of key local
players (mainly China).
� Technology trends towards ‘Green Products’ and “Smart Coatings’
CONCLUSION
Summary Points
23February 2009
APAC Paint & Coatings Market
Poll Question 2
How confident are you that the Paint & Coatings market in the
APAC region will slowly start to recover by the second half of 2009?
• Very confident
• Somewhat confident
• No confidence
• Difficult to predict
24February 2009
APAC Paint & Coatings Market
ABOUT PAINT FROST
(A Growth Partnership Service dedicated
to the Paint & Coatings industry)
25February 2009
APAC Paint & Coatings Market
� 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
� Provides history as well as future trends and forecasts for the APAC paint market
� Provides qualitative insights from paint experts who continuously track the market and
provide segment summaries
� Easy to use report formats and data can be exported to Excel
What is www.PaintFrost.com
26February 2009
APAC Paint & Coatings Market
REGION COVERAGE-14 Countries
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- Coverage
27February 2009
APAC Paint & Coatings Market
Key Deliverables
• Yearly Analyst Briefing on paint outlook provided in addition to the above.
• Consulting hrs available on request
Additional
Deliverables
Key
DeliverablesA) Interactive Reports
1) Market Sizing & Forecasts
• Volume, Value, CAGR)
• Market Sizes are available for 4 yrs historical and 2 yr forecasts
• Updated yearly by Qtr 2 through primary research with over 300
interviews
2) Technology Shares
3) Company Shares
4) Tier Shares (Decorative market only )
B) Segment Summary Reports- 10 application segments
C) Company Profiles- 100 Regional & Local companies covered. Updated yearly
Growth Indicators-Economic and end-use trends. Include GDP growth rate,
population etc. Other industry trends including
28February 2009
APAC Paint & Coatings Market
Deliverables- Interactive Reports
Interactive Reports
Choose how you wish to
slice and dice the
market data.
29February 2009
APAC Paint & Coatings Market
This is the
type of data
and how it is
presented
How Data is Presented-1/2
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.
30February 2009
APAC Paint & Coatings Market
1. Shows you an
overview of the
entire APAC
market in terms of
volume and value &
CAGR.
How Data is Presented-2/2
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
31February 2009
APAC Paint & Coatings Market
Deliverables- Segment Summaries
Market Summaries- are paint segment
overview reports provided in a pdf format.
They cover & review the entire
application segment in terms of market
drivers, restraints, competitive landscape,
regional outlook and technology trends.
These summaries can be downloaded and
are typically 7-9 pages long
32February 2009
APAC Paint & Coatings Market
Deliverables- Company Profiles
Company Profiles are overviews of
an individual company provided in a
pdf word format.
It details out an individual
company’s financials, business
activities market share,
manufacturing and R&D locations
and strengths & weaknesses.
These profiles can be downloaded
and are typically 7-9 pages long
There are 100 profiles altogether
including key companies from China.
Companies listed are MNC’s as well
as local players
33February 2009
APAC Paint & Coatings Market
Next Steps
Interested in the above deliverable and want to know more?
Please log on to the Paint Frost website at
� www.paintfrost.com
� Click on the ‘Contact Us’ button and leave us your details
Additionally you can also register for the following:
�Frost & Sullivan’s Growth Opportunity Newsletter and keep abreast of
innovative growth opportunities (www.frost.com/news)
�Frost & Sullivan’s next Chairman’s Series on Growth:
(http://www.frost.com/growthapac)
34February 2009
APAC Paint & Coatings Market
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?
35February 2009
APAC Paint & Coatings Market
Q&A
Session
36February 2009
APAC Paint & Coatings Market
For Additional Information
Steve LeeStrategic Account ManagerChemicals, Materials and Food, Asia Pacific(65) 6890 [email protected]
37February 2009
APAC Paint & Coatings Market
Disclaimer
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Quantitative market information is based primarily on interviews and therefore is subject to fluctuation.
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