International Coatings Scene
CANADA
BY CHARLES W. THURSTON
CANADIAN CORRESPONDENT
THURSTONCW@RODPUB.COM
Canadian outlook for 2008 is
cautiously positive
A review of
Canada’s paint
and coatings
industry in
2007 and
forecasts of
what to expect
in 2008.
Canada’s paint and coatings industry
is expected to grow less than two
percent during 2008 as the national
economy as a whole struggles to expand by
one percent this year, with automotive and
industrial segments lagging architectural
sales, industry officials and executives say.
Total paint and coatings sales for 2007 rose
an estimated one percent to Cdn$1.9 billion, with exports down two percent to
Cdn$450 million, while imports declined
one percent to Cdn$960 million, according
to data from the Canadian Paint &
Coatings Association (CPCA), in Ottawa.
While architectural segment sales grew
by approximately 1.5% during 2007,
Canada’s automotive industry is shrinking,
and offshore relocations of other industrial
plants are hurting industrial segment sales,
paint executives indicated. During January,
the Canadian economy grew by 0.6%—the
biggest one-month increase in three years—
on the heels of a 0.7% decline in December,
suggesting that the country might avoid the
recession widely expected in the U.S.
Similarly, the Canadian automotive sector
reported growth of 12% in January, contrasted with a 27% contraction in December,
according to data from Stats Canada.
“A majority of industrial paint end-use market segments will post declines for 2007,
including coil, building products, auto parts
and furniture, to name a few,” said Jim Quick,
president of CPCA, citing internal survey
results for the first three quarters of 2007.
“In 2008, there will be continued rationalization of the sector as companies continue
to vie for position in the marketplace,” Quick
continued. “We will continue to see an
increased emphasis on the environment,
with governments everywhere rushing to
prove their environmental credentials. And
in the immediate future, we will continue to
see the economic challenges of a high
Canadian dollar and a possible downturn in
the U.S. economy.”
CPCA indicates that there are more than
230 paint and coatings manufacturers in the
country, employing approximately 15,000
workers. By segment, CPCA indicates that
the architectural segment accounts for 41% of
sales, while automotive accounts for 39% and
industrial coatings account for almost 20% of
total sales.
Niche players in Canada’s paint and coatings industry may stand the best chance for
growth this year, suggested Steve
McFarlane, president of A.R.Monteith Corp.
in Mississauga, Ontario. “There’s been a lot
of consolidation in the Canadian paint and
coatings market and a lot of production has
moved from Canada to the U.S.,” he said.
“The weaker U.S. dollar is hurting the
industry as a whole, mainly for exports. But
for companies like mine, not reliant on
exports, the exchange rate helps offset
higher oil costs.”
A.R. Monteith’s production by volume is
largest in the architectural segment, followed by wood stains and industrial coatings, and by specialty latex flats for theaters. Toll production accounts for approximately 35% of total production, according
to McFarlane. “People still are looking for
local suppliers, so our sales are still growing for low VOC formulations, especially for
new water-based wood stains,” he said. He
suggested that the paint industry as a
whole will not grow as fast as Canadian
GDP this year. CW
