Coatings World - August 2015

this forecast slowdown in growth over the next five years, the Asia Pacific region is forecast to grow approximately 1.7 percent faster than the global average in volume and 1.9 percent faster than the global average in value. This will result in a 2018 value of $80,465 million on a volume of 24,842 million liters for Asia Pacific.

Country Distribution

China:

China is the second largest economy in the world behind the U.S. Many economists and global organizations, such as the World Bank are forecasting that China will surpass the U.S. as having the largest economy in the world within the next five years. China has enjoyed unprecedented GDP growth over the past two decades. It is therefore of no surprise that China is now, and has been for years, the largest coatings producing and consuming country on the face of the earth. In 2013, the Chinese coating market was estimated to be $31,331 million on a volume of about 10,681 million liters. China alone accounts for 58 percent of the volume and 56 percent of the value of the Asia Pacific coatings market. China also represents 29 percent of the global volume and 24 percent of the global value of the coatings industry. The size of the Chinese coatings market has grown by over 5,600 million liters since 2008. China is viewed by industry observers and participants as being the engine of growth for coatings, not only within the Asia Pacific region, but also for the world.

For years, economists have been predicting a slowdown in
the Chinese economy which will have a direct impact on the
growth of the coatings industry. That economic slowdown has
occurred. The Asian Development Bank (ADB) has forecast that
China’s economy will have slowed to 7. 5 percent growth by
year end 2014 and to 7. 4 percent by the end of 2015. Key activ-
ity indicators of the Chinese economy have recently weakened,
causing other economists to forecast more modest growth for
China over the next several years. It should be noted that even
if the Chinese coatings industry grows at a rate of seven percent
annually over the next decade, the already largest coatings in-
dustry in the world will be twice its current size.

India:

Today, although the Indian paint and coatings industry is still a relatively small portion (eight percent) of the global coating industry, it is certainly one of the fastest growing in both size and importance. India has seen dramatic growth in coatings production over the last decade or so and is now the second largest producer and consumer of coatings within Asia Pacific, increasing from 2,106 million liters in 2008 to 3,105 million liters in 2013. Although India is the second largest producer of coatings within Asia Pacific in terms of volume, it actually ranks third ($5,701 million) in value behind China and Japan. While the Indian economy was clearly impacted by the global recession, it has still been growing at an enviable growth rate, far faster than that of most developed nations. This is the result of the expanding economy and the fact that the Indian coatings industry does not depend heavily on an export market. The Indian coatings industry is dominated by the decorative segment which represents well over 75 percent of the market. Although the industrial coatings segment is less than 25 percent of the total volume of India, this portion of the market is growing rapidly due to increased commercial and government investment in sectors such as automotive, infrastructure, shipping port projects and general manufacturing.

Japan:

Japan now ranks as the number three coatings producing country in Asia Pacific in terms of volume, and number two in value. Unlike some of its Asian neighbors, Japan has been experiencing negative growth in both its economy and its coatings industry in recent years. A contributor to the negative coating growth in Japan has been the outsourcing of a large portion of Japan’s manufacturing sector, shifting coatings consumption to new ge-ographies. In 2008, the size of the Japanese coatings market in volume was 1,532 million liters. Five years later, in 2013, it was 1,341 million liters – a loss of more than 190 million liters. This negative trend is expected to turn around and a small increase in volume ( 18 million liters) is being forecast to take place by 2018. The disparity between developed parts of Asia Pacific such as Japan and Australia versus the developing countries becomes apparent in the per capita GDP and paint consumption data. The per capita paint consumption in Japan is on par with Western Europe. At 10. 5 liters per capita paint consumption, Japan is well over twice the average ( 4. 7 liters per capita) for all of Asia Pacific.

South Korea:

South Korea is the fourth largest market (both in volume and value) for coatings in Asia Pacific. The size of the South Korean coating industry is $3,926 million on a volume of about 888 million liters. South Korea is a mature, slow growing marketplace for coatings. The largest segment of the South Korean