Europe
Consolidations in the Coatings Industry
to Accelerate Growth in Europe
by Sean Milmo
European Correspondent
milmocw@rodmanmedia.com
Many European coatings companies have been reporting revenue increas- es in the first half of this year which
have been lower than rises in volume sales of
their products.
The discrepancy is partly due to weak demand which has been putting downward pressure on prices, as well as currency effects. But a
key factor is stronger competition as companies
battle for greater market share through acquisitions and marketing and sales investments.
The competition should intensify, particularly
as a result of expansion initiatives by U.S. companies in Europe and its peripheral markets.
Sherwin-Williams has made clear that an ob-
jective behind its takeover of Valspar to make it
the world’s largest coatings company is to ac-
celerate its growth in both Europe and Asia.
PPG and Axalta are also seeking a stronger presence in Europe by taking advantage of
what they perceive as gaps in a regional market
which continues to be fragmented.
However enlargement ambitions are not
just confined to U.S. companies. Most of the
big coatings and many medium-sized players
in the European coatings sector have now adopted strategies of growth through acquisition.
The exceptions are European companies
which have been pursuing a strategy of sales
and profits growth through expansions into
markets outside Europe without the need for
takeovers. “While we remain focused on controlling costs, Jotun remains committed to our
organic growth strategy, which applies to both
existing and new markets,” said Morten Fon,
president and chief executive of the Norwegian-based coatings producer.
The competition
should intensify,
particularly
as a result of
expansion
initiatives by
U.S. companies
in Europe and
its peripheral
markets.
