Coatings World - June 2008

International Coatings Scene

EUROPE

BY SEAN MILMO

EUROPEAN CORRESPONDENT

MILMOCW@RODPUB.COM

Demand for protective coatings grows

The buoyancy in protective coatings sales, which enabled European coatings companies to earn record high revenues in the sector last year is continuing into 2008.

European
companies
continue to
expand the
international
sales of their
protective
products.

The driving forces behind the growth is investment in energy facilities, particularly in oil and gas production and distribution and in wind turbines, and in infrastructure projects in Eastern Europe, like transportation and manufacturing plants.

In addition, new environmental legislation in the EU, especially that relating to the emission of VOCs like solvents, has prompted a move into added-value protective paints.

However, Western European coatings companies involved in the sector are likely to have to rely on global sales to keep up the momentum. In addition to needing quality products and an understanding of what customers want, “success in the highly competitive protective coatings market increasingly requires a global reach,” according to Martin Chew, divisional vice president for protective coatings at Norwegian-based Jotun.

A global operation in protective coatings, based on a combination of consistent product standards and technical service support, has to have, increasingly, a network of coatings plants across the world. Jotun opened in March its first manufacturing facility in India, which will help it to serve customers in South Asia and the Middle East.

This need for an international production

and services capability has been a big impetus behind a surge of mergers and acquisitions in the protective coatings sector in Europe.

In the first quarter of this year, Akzo Nobel reported that the main growth impetus in its marine and protective coatings business was protective coatings which achieved a double-digit volume increase compared to the same quarter in 2007.

The protective coatings activity was also a star performer for the company last year, helping the marine and protective coatings business to raise its sales by 11% to €1.25 billion ($1.9 billion).

Jotun’s protective coatings sales soared by 40% last year. At Danish-based Hempel, protective sales rose by 30% last year, which was a similar increase to that in 2006.

For European companies one of the fastest growing of the protective coatings segments has been oil and gas not only in Western but also Eastern Europe.

“There is a continuing boom in construction of oil and gas facilities,” said John Dunk, worldwide marketing manager of the Interpon protective coatings activity at Akzo Nobel’s International Paint, marine and protective coatings business. “Oil and gas companies have been increasing their capital expenditure not only on offshore production but also onshore refining and gas operations.”