greater use of preservatives with more than one active agent
and, as a result, the overall cost to preserve paints and coatings
will likely increase.
Supplier Divestments
Another interesting trend noted by IndustryARC analysts relates to the divestiture activity of major global chemical companies. Several have spun off operations supplying the coatings
industry as independent businesses. In news just released at
press time, Dow and DuPont announced plans to combine
in a “merger of equals” and the combined company will be
named DowDuPont, and will be subsequently spun off into
three independent, publically traded companies through tax-free spin-offs.
DuPont, having already divested its coatings business (now
Axalta) in 2014, completed the separation of its Performance
Chemicals segment, including its titanium technologies, fluoro-products, and chemical solutions businesses, through the spin-off of The Chemours Company effective July 1, 2015. Bayer
MaterialScience began operating as the independent company
Covestro on September 1, 2015. In March 2015, Dow announced that it is separating its U.S. Gulf Coast Chlor-Alkali
and Vinyl, Global Chlorinated Organics and Global Epoxy
businesses in order to merge them with Olin Corporation. That
deal is expected to close by the end of the year.
In July 2015, BASF SE announced that it will separate its
pigments activities into a new global business unit (GBU) effective January 2016 and then spin off the GBU in the second
half of 2016 as a separate legal entity. In May 2015, Ashland
announced that it would sell its industrial biocides assets within
Ashland Specialty Ingredients to Troy Corporation. The company then announced in September 2015 that it will split into
two separate, publicly traded companies, Valvoline and Ashland
(currently Ashland’s Chemicals Group, comprising Ashland
Specialty Ingredients and Ashland Performance Materials). Also
in September, Air Products announced that it will fully separate
its Materials Technologies business via a tax-free spin-off to its
shareholders before September 2016. The business will now be
known as Versum.
This trend of divestments is largely due a desire to focus on
core technologies, and, in many cases, the life science, energy,
and transportation industries, which are seen as offering the
greatest potential for growth in the future, with little impact
on the coatings industry. Most of the newly formed companies were operating as fairly independent business units within
larger corporations. Customers are, in fact, likely to benefit; the
much leaner organizations will not have the support of business
operations in other unrelated sectors to balance out their performance, and therefore will need to be highly innovative and
responsive to customer needs. CW
