International Coatings Scene

EUROPE

its currencies so that, on top of its low labor costs, the region is becoming even more cost competitive in global markets.

“The weaker currencies of Eastern European countries will make it easier for their economies to bounce back quickly,” said David Thomas, chemical markets analyst at Oxford Economics, a forecasting consultancy in Oxford, England. “Coatings companies in Eastern Europe importing high value chemicals will have to pay more for them because of depreciated domestic currencies. But once demand picks up this extra cost will be more than offset by a rise in sales of downstream exporting customers.”

Major markets for industrial coatings in Eastern Europe include automotive, metal and wood products. The region has experienced a big surge of investment in car plants in recent years while countries like Poland and Russia are major exporters of furniture and other wood items.

“We may see Eastern Europe get back to annualized trend growth of approximately five percent by as early as the fourth quarter of this year,” said Thomas. “Inventories will be low and when demand begins to recover buyers will want to go to where costs are low. Eastern Europe will be well positioned to respond to that trend.”

Optimism among economists and foreign coatings and other industrial companies about the medium- and long-term futures of the Eastern European economies partly stems from the rapidity with which they have rallied after previous financial meltdowns. After Russia’s financial markets collapsed in 1998 triggering a five percent dive in GDP, the country recorded growth rates of 6.4% and ten percent in the next two years.

The recession is not deterring Western coatings and raw materials

suppliers from building a strong position in terms of production and logistical capacity in Russia.

“We are sure that, in spite of the world economic crisis, it is important we continue to invest in markets with high potential such as Russia,” said Cheryl Martin, vice president and general manager for paints and coatings materials at Rohm and Haas when the company recently opened a coatings additives plant in Moscow.

BASF Coatings has just started operating a 6,000 ton-a-year plant for basecoats and clearcoats at Pavlovskij Posad, near Moscow—the first OEM coatings facility of an international paint manufacturer in the country. The company already

has production capacity for coil coatings in the country.

The OEM unit is initially making solventborne paints but will be able to switch to waterborne basecoats at any time.

“Despite the economical worldwide crisis, Russia is still an attractive market and location for the production of cars,” said Semen Beylakov, head of BASF Coatings in Russia. “Our new site expands the European production network for automotive paints and also offers its customers local support for application techniques and laboratory services. The production line puts us in a strong position for current and new business. We are now in a strong position in the region and are well prepared for the future.” CW

Use grind gages more consistently.

Little Joe Industries offers the ADM Automatic Draw-Down Machine for use with grind gages. The ADM automates the draw down process controlling scraper angle, speed, and force. Since these aspects are no longer operator dependent your grind gage draw-downs will be more consistent while requiring less operator training and supervision.