Exterior Architectural
Decorative Coatings
The overall slowdown in economic activity combined with rising
raw material costs, greater VOC restrictions and market consolidation
are the key issues facing the exterior deco market today.
BY TIM WRIGHT
EDITOR
The economic slowdown has taken its toll on
paint makers serving the exterior decorative
coatings market. With fewer new homes and
buildings under construction, the number of gallons of paint sold in key mature markets has fallen.
To make matters more difficult paint makers are
also plagued with high raw material costs. While
they have stabilized a bit of late, the increases
have far outpaced manufacturers ability to pass
them along to customers. Increasing energy prices
and ever more stringent environmental regulations are also challenges.
The market is also faced with continued customer and
channel consolidation as well as manufacturer consolidation, which have a particular impact on smaller suppliers
as they struggle to compete against global giants among
fewer customers. The 20 largest paint makers, including
PPG, DuPont and AkzoNobel, control more than 80% of
the paint market.
According to consultancy Orr & Boss, architectural
coatings accounted for an estimated 51% of the total global coatings volume in 2007. Exterior coatings represent
approximately 35% of all architectural coatings, while
interior coatings account for the remaining 65%. The
market in North America and Europe was flat to declining in 2007 compared to 2006. Further declines are
expected for these markets in 2008. At the same time
China, India and other emerging markets continue to
thrive and show positive growth in exterior decorative
coatings.
In terms of volume, the Americas make up 33% of the
exterior market, Western Europe 22%, Asia-Pacific 23%,
ROW ten percent, Eastern Europe nine percent and India
three percent. As for value, the Americas makes up 33%
Exterior coatings represent approximately 35% of all architectural
coatings, which account for more than half of total global coatings
volume.
of the exterior market, Western Europe 30%, Asia-Pacific
22%, ROW six percent, Eastern Europe seven percent
and India two percent.
Ray Foscante, a senior consultant with Orr & Boss, differentiated between the interior and exterior paint markets. “The interior market is primarily a discretionary
one driven by either decorating preferences or by
changes in ownership or occupation as with commercial
property. As such this segment will see more frequent
