Asia Pacific
August 2015 www.coatingsworld.com Coatings World | 35
acquisition of Wattyl, Valspar has been increasing its share of
the Australian decorative coatings segment as well.
The Japanese companies, Kansai Paint and Nippon Paint, are
not only the market leaders in Japan but are also major suppliers in China and other countries throughout the Asia Pacific
region. Chugoku Marine Paints, another Japanese-based company that sells paint in the marine and industrial sectors, now
has three paint plants in China.
While many of the local and regional paint companies in
Asia Pacific concentrate on the low-end parts of the market,
an increasing number of the larger paint manufacturers are
offering high quality coatings that compete directly with the
multinationals, at least in certain end use markets. For example, Guangdong Carpoly Chemical Group, Guangzhou
Strong Chemical and Daoqum are Chinese companies that
offer high-end products, although none of them have very
large market shares.
The Indian paint and coatings industry is going through a
transition. As a result, foreign multinationals continue to make
large investments in the country and the pace of market consolidation is increasing. For example, historically India has had one
of the lowest per capita paint consumption rates in the world,
even compared to most countries in Asia Pacific. This per capita
consumption rate will surely increase over the next decade with
the ongoing rise of the middle class. A growing percentage of
India’s population, an estimated 1.27 billion in 2014, is able
to purchase previously unreachable items such as homes, major
home appliances, automobiles and other consumer goods.
Asian Paints and Berger are two of the largest paint companies headquartered in India, with Asian Paints being almost
three times the size of Berger. Participation by the large multinational paint companies is also growing in India as well.
AkzoNobel, Axalta, BASF and PPG are all active in the Indian
automotive refinishes, powder coatings and industrial coatings
markets. Two of the large Japanese companies, Kansai Paint and
Nippon Paint, have also been growing their positions in India.
For example, in 1999, Kansai Paint completed its acquisition of
Tata Forbes group and as a result, Goodlass Paints Ltd. became
a wholly-owned subsidiary of Kansai Paint Company. In 2006,
Goodlass Paints Ltd. changed their name to Kansai Nerolac
Paints Ltd. In recent years, Kansai Nerolac Paints has grown to
become one of the top three coatings companies in India.
The large Western companies are also increasing their investment in India. For example, a couple of years ago, PPG
Industries received the necessary approvals from Indian authorities to build upon its 15 year relationship with India’s largest
coatings company, Asian Paints, by expanding its existing coatings joint venture and establishing a second joint venture. PPG’s
and Asian Paints’ first joint venture was expanded to include
marine, transportation, consumer packaging and industrial
liquid sectors. The second 50-50 joint venture in India (Asian
Paints PPG Limited) is focused on the powder, industrial container and protective light industrial sectors.
Within India, the so-called “organized” part of the Indian
coatings industry is the national, premium end of the market
with higher quality and higher priced products. This segment
of the industry is served mostly by the large, well-financed coat-
ings companies including an increasing number of multination-
als as mentioned above. This “organized” part of the market is
estimated to be over two-thirds of the total coatings industry in
India. By contrast, the “unorganized” part of the Indian market
is still quite fragmented with well over 1,000 small participants.
This segment tends to be served by many of the local and re-
gional coatings suppliers.
The rapid growth in Asia Pacific, and in particular growth
in China, India and much of Southeast Asia has really gained
the attention of the leading Western coatings manufacturers and
raw material suppliers over the past 20 years or so. Especially
given the slow growth in Western countries, many formulators
and suppliers have been focusing on the Asia Pacific region for
future growth.
Expanding economies, albeit at lower growth rates, increasing affluence and a broadening of the middle class in countries
such as China, India and many in Southeast Asia represent good
investment opportunities for coatings manufacturers and raw
materials suppliers. For example, in the fourth quarter of 2013,
AkzoNobel strengthened its manufacturing footprint in India
by opening a new, decorative coatings plant with an annual capacity of 55 million liters. This is AkzoNobel’s sixth factory in
India. With its Chinese headquarters located in Shanghai, PPG
now has 4,000 employees in Mainland China and operates fourteen manufacturing plants throughout China. In January 2014,
Axalta Coating Systems broke ground to expand its manufacturing capacity for coatings with the construction of a new $50
million eco-friendly water-borne facility in the Jiading district of
Shanghai. Axalta’s Shanghai water-borne facility is expected to
begin production in 2015. This plant will supply up to 25,000
metric tons of water-borne products to support the long term
growth of the automotive OEM industry that is rapidly expanding into the western and southern provinces of China. This will
augment Axalta’s flagship automotive OEM coatings plant located in Changchun, China.
As part of its expansion strategy throughout the rapidly
growing parts of Asia Pacific, in mid-year 2013, Nippon Paint
broke ground on its third paint plant in Vietnam, located in the
Vinh Phuc province. When completed, this plant will produce
general industrial paint coatings for the motorcycle and automotive industries, marine coatings and resins.
In the first half of 2013, BASF established a new, state-of-the-art Coatings Technical Competence Center in Bangkok,
Thailand. This plant is designed to support technology transfer,
product development and other laboratory activities mainly related to motorcycle coatings within the ASEAN region including
Thailand, Vietnam, Cambodia, Malaysia and Indonesia. One
can see that the recent drawback in the economies of emerging
Asia has not stifled the enthusiasm of, and investment by, those
coatings companies having a long-term view of the region.
It is true that the high level of activity in the region presents
good opportunities for Western suppliers. However, many of
these suppliers underestimate the differences in business culture
