Powder Coatings
It is time for a renewed commitment to technology.
BYMIKEHAMILTON
BUSINESSUNITDIRECTOR, POWDERCOATINGS
VICEPRESIDENT, ROHM ANDHAASCOMPANY
It would come as a surprise to
no one that the challenges facing the powder coatings industry today are quite challenging.
Demand is down around the world,
particularly for building, construction and automotive end uses.
Capacity is too high and a lack of
innovation in recent years could
force structural changes in this
industry. The current top-line
destruction will only worsen
industry profitability as firms
fight to survive.
Yet there is room for optimism.
Companies that can think in their
MIKE HAMILTON
customers’ shoes, improve working
relationships with equipment providers and pre-treatment suppliers,
keep their cost structure low—and
lead the way in material innovation—will demonstrate resilience
and be successful, even in a down
market.
As I see it, there are four factors at
play in our industry today:
• Severe demand reduction across
the globe, as demand for everything
from coated metallic parts for windows to tractors to appliances slows;
• Stalled conversions from industrial
coatings conversions to powder; even
though powder coatings are more
sustainable in many applications,
end use customers and coatings
providers have not yet found the
incentive to make the change;
• Lack of material innovation that
would drive deeper adoption of powder-based coating systems. In part, this is
due to the industry’s inability to reach
out to branded OEM’s across the globe
and best understand their brand needs,
then convert that knowledge into material developments; and lastly,
• An absence of enough meaningful
collaboration with the equipment
providers and pre-treatment providers
to better deliver improvements in cost-per-coated part, as well as enhanced
product consistency.
Before addressing each of these
forces, let me review powder coatings’ place in the broader coatings
world. We are a part of the $75–85
billion global market for formulated
coatings, of which industrial applied
coatings represents $30-35 billion in
sales. Powder is one class of industrial coatings, representing $5-6 billion
of sales, or slightly under seven percent of all coatings consumed. Up
until this decade, powder coatings
recorded growth rates in excess of
ten percent per year, with healthy
returns on capital. The growth came
as OEM’s converted their surface
treatments to powder applications
for improved economics, durability
and improved environmental factors.
While this growth has substantially
slowed in the past few years, powder
coatings is still recognized as the
fastest-growing coatings class.
The challenge (and opportunity)
for the powder coatings industry, is
to restart the conversion engine,
using new material advances to both
restore healthy returns on capital
and growth.
DEMAND DESTRUCTION
Most recent earnings reports in our
sector have noted that poor results,
in part reflect dramatically down
demand for steel, aluminum and
other metal substrates as the building and construction market world-
