Coatings World - July 2012

A profile of the
South American paints industry

IRL has published a new edition of its
“Profile of the South American Paints In-
dustry.”
This report covers the markets for paints
and coatings in Argentina, Bolivia, Brazil,
Chile, Colombia, Ecuador, Paraguay, Peru,
Uruguay, and Venezuela. It segments each
country market into nine mainstream coat-
ings sectors for 2011, and also includes
overall market forecasts to 2016.

Brazil is by far the largest country market in South America, accounting for some 60 percent of total demand for paints and coatings.

Argentina and Colombia are the sec-
ond and third largest markets respectively,
The major multinational
paints and coatings companies
have a strong presence in
South America and continue
to invest in the market, via or-
ganic growth and also through
strategic acquisitions.

Official population statistics give a per capita paint consumption of 7.1kg for the South America region as a whole, with the highest levels seen in Brazil and Chile. Bolivia has the lowest paint consumption per person.

Despite starting from a small base, Bolivia is expected to show the fastest growth in its coatings market over the medium term (around eight percent p.a.), followed by Chile and Uruguay.

There are several key drivers behind the expected future growth in the South American market.

The growth of the oil and
gas industries has seen Brazil
rushing to develop its vast off-
shore petroleum resources,
while Argentina has newly
discovered shale gas reserves and Colombia
and Peru are expanding their refineries and
alternative energy projects such as thermo-
electric, hydroelectric and wind power.

Chart 1: South American Market for Paints & Coatings, 2011 (Tons)

Chart 2: Per Capita Paint Consumption in South America in 2011

• Reliance on imports for many raw materials required for paint production e.g. resins, pigments;

• Lack of regulation concerning environmental aspects of paints and coatings, which can undermine consumer confidence in product quality;

• Corruption at government and industry level – Chile and Colombia have recently passed legislation to specifically tackle corruption problems;

• Venezuela’s wide scale
nationalization program has
forced many investment proj-
ects to be put on hold; and
• Argentina’s controversial
nationalization of oil com-
pany YPF (Yacimientos
Petrolíferos Fiscales) and its
expropriation from Spanish
energy firm Repsol has caused
political turmoil.