Coatings Industry Continues
Strong Push To Recovery
First quarter results
are coming in better
than expected.
by Sean Milmo
European Correspondent
milmocw@rodpub.com
In their annual results for 2011, coatings pro- ducers in Europe have been predicting that 2012 will be much the same overall as last
year in terms of growth in sales and profits.
There would, nonetheless, be one major difference between the two years. Whereas 2011
started relatively strongly and ended weakly
with sluggish demand and squeezed margins,
2012 would start with feeble sales and profits
but finish much more positively.
This would lead the way to an accelerated recovery in 2013 when sales levels in volume
terms would start to return to what they were
before the 2008 financial crisis.
However it already appears that sales of
coatings and other higher-value chemical segments in the first quarter of 2012 could be better than expected.
“So far the figures look good so that we can
be reasonably confident about a positive out-
come for the first quarter,” said Moncef Hadri,
chief economist at the European Chemical In-
dustry Council (Cefic), whose statistics covers
both upstream and downstream sectors like
coatings. “A good first quarter can provide the
basis for a continued upturn though the rest of
the year.”
Overall production of chemicals, which in-
cludes coatings, expanded in the Euro-
pean Union in January for the second
consecutive month after four
straight months of contraction,
according to the latest
Cefic figures, issued by
its statistics unit Cefic
Chemdata Interna-
tional. With
paints, produc-
tion was mar-
ginally higher
than a year
ago whereas
with chemicals
Total chemicals sales have been rising relatively strongly. While output levels were 2.3 percent lower than those in early 2011, the sales
figures at the start of 2012 were almost certainly
higher. In December they were almost two percent higher than a year ago. But the improved
sales performance, continues to be driven
mainly by prices, which for the chemicals sector
as a whole, including paints, rose by an average
nine percent in the EU.
Demand for coatings and other downstream
chemical products is being boosted by the resolution by EU governments, at least temporarily,
of the crisis with the euro, the EU currency used
by 17 member states, after Greece avoided a serious default on its huge national debt.
With a more stable euro, business and consumer confidence in Europe is improving. In
February for the second month in a row the
EU’s Economic Sentiment Indicator (EIS), based
on surveys of companies and consumers, went
up by 1.1 points to just under 94, although it
was still well below the long-term average.
“We hope that a positive attitude among
consumers will now lead to them buying more
decorative paints to renovate their homes,”
said Erkki Jaervinen, president and chief executive of Tikkurila of Finland, which has decorative and industrial coatings operations in
Scandinavia, and Eastern Europe, including Russia.
