Coatings World - Sample Issue

International Coatings Scene
EUROPE

and the UAE, the London-based research organization IRL estimated the country’s annual paint demand to be 800,000 metric tons.

“The size of the Saudi coatings market is already almost the same as that of France,” said Terry Knowles, an IRL researcher. “We expect Saudi demand to almost double by 2010, when it will be considerably larger than some of Europe’s biggest markets.”

Some analysts reckon, however, that the current Saudi figures for coatings could be distorted by the massive upsurge in construction expenditure. After this has ended, demand may well settle down to a lower level.

Nonetheless, the big leap in paint consumption in recent years has helped to create a number of indigenous coatings companies which are tough rivals to Western operators. In the protective coatings sector, these include Saudi Industrial Paint Co. (Sipco), which has close ties with Saudi Aramco, the Saudi national oil company, and Arabian Pipes Co. (APC), a manufacturer of pipes and their coatings.

The UAE coatings market, which is dominated by the emirates of Dubai and Abu Dhabi, amounts to 132,000 tons, according to IRL. It is growing at 16% a year so that it will more than double in volume by 2010.

Dubai, which is a frenzy of construction activity with approximately 1,5000 cranes operating on its building sites in July this year, has become a hub of paint production and trade in the Gulf region. It also supplies the potentially large market of neighboring Iran, the world’s fourth biggest oil producer with a population of approximately 70 million.

“It has very good logistics and is well placed geographically to serve markets both in the Middle East and in Asia,” said Hans Courtier, a consultant at

Irfab Chemical Consultants, Brussels, Belgium. “It imports a large amount of powder coatings, for example, but exports even bigger quantities. If European paint companies want to sell big volumes in the Gulf they need a production base in a place like Dubai.”

Jotun, the Norwegian paint company, which probably has the largest market share in the Gulf of European producers after a 30-year presence in the area, opened a 40,000 million liter-a-year plant at Al Qouz, Dubai, two years ago. It has its worldwide headquarters for powder coatings in Dubai which also serves as its Middle East and South-East Asian base for decorative, marine and protective paints.

The company, which conducts a strategy in the area of being a “single source solution provider,” announced in April that it had won three coating contracts worth $19 million in the UAE, including one for a new terminal at Dubai International Airport.

Some leading international players in decorative paints are taking a cautious approach to the Gulf market because they want to wait and see how the market develops after the current construction bonanza.

ICI operates in the Middle East, including the Gulf, a network of locally owned companies to which it licenses its Dulux brand and its technologies while ensuring that they run their production plants to their own quality standards.

“You can’t build a strategy for a market on the basis of a construction boom,” says Tony Myers, managing director for ICI Paints’ Middle East and Africa business. “We are interesting in substainable markets with large populations with rising disposable incomes. With promising markets in the Middle East we could consolidate our licensees into the company.” CW

Ask the Expert

Ernie Galgoci Lead Applications Chemist, Coatings Additives

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