coatings segments in the ASEAN countries is forecast to continue over the next several years. It should be noted, however, that this part of Asia Pacific is not without its own set
of challenges. These challenges include such factors as poor
export growth, competition from China, terrorist threats and
the generally low investment growth in some of the countries
within Southeast Asia.
Central Asia:
Central Asia is the region of the Asian continent that is bordered by the Caspian Sea in the west to China in the east and
from Russia in the North to Afghanistan in the south. Central
Asia consists of the so-called “stans” countries which were once
all republics of the former Soviet Union including Kazakhstan,
Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan and
Azerbaijan. Kazakhstan and Uzbekistan constitute over 80%
of the coatings industry in this region. Of these two countries,
Kazakhstan is the bigger, faster-growing market with a per capita paint consumption twice that of Uzbekistan. The Kazakhstan
building and construction market has been experiencing strong
growth in recent years which has fueled the growth of decorative coatings. Significant investment in automotive business has
led to growth in the automotive OEM and refinish sectors.
Other Asia Pacific:
The other countries in Asia Pacific are referred to collectively as
the “Other Asia Pacific” for the remainder of this chapter.
Competitive Landscape
Like all regions of the world, the multinational coatings companies are playing an increasingly more important role in the Asia
Pacific marketplace. However, unlike the mature regions such as
Europe and North America, the Western-based multinationals
constitute a smaller share of the total market in this region than
the large Asian players and the many smaller local players.
There has been some consolidation that has taken place by the
multinationals and larger Asian coatings companies throughout
Asia Pacific. For example, the China National Coatings Industry
Association (CNCIA) estimates that its roughly 700 members
represent over 80 percent of the total Chinese coatings industry.
This group includes companies such as AkzoNobel Swire Paints,
Axalta, Carpoly Chemical Group, BASF Shanghai, International
Paint of Shanghai, Guangdong Huarun Paints, Nippon Paint
China, PPG Coatings Tianjin, Shanghai Paints, SKSHU Paint
Corporation, etc. However, CNCIA estimates that there are still
more than 15,000 coatings manufacturers active in the Chinese
coatings marketplace. Most of these players are small, somewhat unsophisticated companies. As has occurred in Europe
and North America, it is anticipated that the rate of consolidation will accelerate and the number of players will decrease
throughout Asia Pacific over the next two decades. This will be
the result of (1) the best-in-class regionals being acquired by the
multinationals and (2) the weaker, under-financed players having to close their doors as they are not able to conform to environmental pressures and not able to meet the demand for higher
quality products by customers. For now and into the foreseeable
future, much of the Asia Pacific coatings industry will remain
fairly fragmented across many of the sectors.
The top 20 coatings suppliers in Asia Pacific are a blend of
the largest Asia-based paint companies and of the multinationals headquartered outside of Asia Pacific. These top 20 suppliers include 13 companies headquartered in Asia (Asian Paint,
Chugoku, Kansai, Nippon Paint, Nipsea, Sk Kaken, etc.), four
multinationals headquartered in Europe (AkzoNobel, BASF,
Jotun and Hempel) and three multinationals headquartered in
the U.S. (Axalta, PPG and Valspar). Of these, the top handful
of players, which account for well over 25 percent of the Asia
Pacific coatings industry, include AkzoNobel, Nippon Paint and
Nipsea, Kansai, PPG and Asian Paint.
AkzoNobel, combined with its 2008 acquisition of ICI,
holds a leading market position in the Asian coatings industry. This includes being a leader in the Chinese decorative and
industrial markets and having a very strong presence in powder coatings within the region. International Paint, a business
unit of AkzoNobel, gives the company a solid position in the
large marine & protective coatings segments in Asia Pacific. It
should be noted that over the last several years, Asia Pacific has
become the largest, fastest-growing market for marine coatings in the world.
AkzoNobel and Nippon Paint / Nipsea are the leading decorative paint suppliers in Asia Pacific, followed by Asian Paints.
Kansai, Valspar, Berger Paint (India) and Dulux (Australia) are
in the next group of suppliers of decorative coatings in Asia
Pacific. PPG continues to increase its share of the Asian coatings
market through organic growth and acquisitions. In addition to
the successes in other sectors, PPG and Axalta have carved out
leading positions in the automotive OEM and refinish markets
in China. Valspar has a large presence in the industrial coatings
market in China and is active in the decorative coatings sector
through its 2006 acquisition of Huarun Paints. Since its 2010
Figure 15-3: Regional Distribution of Volume and
Value of Asia Pacific Coatings (2013)
Source: Orr & Boss, Inc. estimates
