Coatings World - August 2017

Doug Bohn, Consultant, Orr and Boss

Asia is the largest and fastest growing coatings market in the world. Given the importance of the Asian market it is important for all companies operating in our industry to understand the market drivers. It is not just the large multinational coatings companies that need to be aware of the market. Recently, Orr & Boss has noticed that many regional and medium-sized coatings companies are getting more active in Asia. If your company is already active in Asia what is the outlook for the market? If your company is considering becoming active in the Asian coatings markets, is now the right time? The key factors to consider as you think about these questions include the Asian Economic Outlook, the Asian Coatings Market Outlook, as well as key trends that are occurring in the market.

Asian Economic Outlook

The outlook for Asian economies remains positive. The Asian
economies will continue to be the fastest growing economies in
the world, although generally their growth rate has slowed slightly
over the last several years. China is the largest coatings market in
the world. As recently as 2014, its GDP had been growing above
7 percent per year. Most projections now indicate that its GDP
growth rate will be between 6.0 and 6. 5 percent through 2019.
This is still a very strong growth rate but not quite as strong as sev-
eral years ago. Japan is the third largest coatings market in Asia.
Its GDP growth is expected to continue to be tepid at less than 1
percent per year. On the other hand, there are some Asian econo-
mies that are expected to grow faster than they have in the recent
past. For example, India’s GDP growth rate is expected to be in the
7-8 percent per year for the next several years. Some economists
even believe that India will take over as the Asian growth leader
from China. While that may be true, India is still a much smaller
economy than China; the Chinese economy is nearly 5 times that
of India in GDP terms. In any case, we do think that India will
be a good growth market in the coming years. The economies in
Southeast Asia like Indonesia and Thailand are generally expected
to do slightly better in the coming years as well. So in short, the
largest economy in the region, China, is expected to continue to
grow at a fast rate, albeit at a slightly slower pace than it had been
growing a few years ago, and the other Asian countries are expect-
ed to continue growing at solid rates. Thus, the expectation is that
the Asian economic growth rates will continue to lead the world.

Asian Coatings Market

Asia is the largest coatings market in the world. Orr & Boss estimates that the 2017 Asian coatings market will be $68 billion which makes it nearly 45 percent of the global coatings market.

Within Asia, there are three countries that drive most of the demand; China, India and Japan account for 78 percent of the Asian Coatings demand. China is by far the most important country. It accounts for 56 percent of the coatings demand. India is now the second largest coatings market in the region. As discussed above, it is a growing economy and that is resulting in increased growth in its coatings market. Japan is the third.

Key Trends

There are several key trends occurring in the Asian coatings market that are important. The first trend is the continued growth in the region. As discussed above, we expect that the Asia Pacific region will continue to drive overall global coatings growth. Another key trend is that paint manufacturers are

The Asian economies will continue to be the fastest growing economies in the world, although generally their growth rate has slowed slightly over the last several years.