Global Industrial Coatings Markets 2010 – 2020 0. Scope and Samples
Multi-client Study Global Industrial Coatings Markets 2010 – 2020 0. Scope and Samples Multi-client Study Global Industrial Coatings Markets 2010 – 2020 0. Scope and Samples Global Surface Coatings Covered Irfab Multi-client Studies are produced by The Paint Resaearch Association (PRA) A member of the Pera Innovation Network Scope and Samples Contents Contents Scope of the Study 3 Structure of the Study 4 Sample Pages 5 Overview 1 Executive Summary 5 2 Economic Indicators 9 3 Regulations 9 Transport 4 Automotive OEM 14 5 Automotive Refinish 18 6 Motorcycles 22 7 Trucks, Buses and Other Vehicles 26 8 Rail 30 9 Aircraft 34 10 Marine Coatings 38 Construction & Infrastructure 11 Protective Coatings 42 12 Industrial Wood Coatings 46 13 Agriculture, Construction and Earthmoving 50 14 Pre-coated Metal Sheet 54 Packaging & General Industrial 15 Metal Packaging Coatings 58 16 General Industrial Coatings 62 17 Coatings for Plastics 66 Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-2 Scope and Samples Scope of the Study Scope of the Study The Global Industrial Coatings Markets 2006-2020 study provided a unique source of data and insights on this broad and fragmented sector. However, at the time it was written the global economic downturn and its impact on coatings demand was not expected. The 2010 update provides the latest outlook to 2020 and examines how the markets for industrial coatings have been affected by the recession. The study examines each of the main geographic regions and builds a picture of global market dynamics. Our extensive programme of interviews has been extended to include not only paint manufacturers but many key players in the end-user markets, allowing us to provide comment on the most important country markets. A new report structure reflects this approach; each industry sub-sector includes a discussion of the underlying market drivers and dynamics before presenting an overview of coatings demand. Value and volume estimates are provided at the top level, with detailed segment and regional coatings demand presented in volume terms. Geographic Regions For the purposes of this study, unless otherwise stated, we have adopted the following geographic regions for reporting purposes: ► Europe EU 27 plus Norway and Switzerland ► CIS & ROE Former Soviet Union and Rest of Europe ► MEA Middle East & Africa including Turkey ► North America United States, Canada and Mexico (NAFTA) ► South America Including Central America ► Asia Pacific Including South Asia and Australasia The reference year for this study is 2009. To allow readers to easily compare and contrast with the prerecession market, trend data is provided for the period 2005 to 2009. To ensure consistency across chapters scheduled for later release, our forecast includes commentary on market developments for 2010 and beyond, accompanied by the latest available data. Following feedback from subscribers to the original study, we have further refined our market definitions and, for the first time, we have introduced a new chapter relating to Plastics Coatings. The study also presents detailed annual projections of coatings demand for the next five years to complement our 2020 outlook. This makes the Global Industrial Coatings Markets 2010-2020 study our most ambitious and comprehensive industry review to date. It is an invaluable tool to improve understanding of the end-user coatings markets and to support strategic decision making. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-3 Scope and Samples Structure of the Study The chapters of the study: Overview 1 Executive Summary 2 Economic Indicators 3 Regulations Transport 4 Automotive OEM 5 Automotive Refinish 6 Motorcycles 7 Trucks, Buses and Other Vehicles 8 Rail Structure of the Study Where appropriate the content of a chapter of the study follows a standard pattern. 1 Executive Summary 2 Introduction 2.1 Market Definition A detailed description of how we have defined the market and its segments. 2.2 Macro Drivers The underlying factors that drive this coatings market. 2.3 Impact of Economic Downturn Highlights the most significant impacts of the global recession on this coatings market. 3 Technology 3.1 Current Technology A review of the technologies used in this market. 3.2 Technology Systems A description of the technology systems used, both established and novel. 3.3+ Technologies by segment Construction & Infrastructure A section on each market segment with details of its specific technologies. 4 Markets 4.1 Global Market Drivers and Trends A detailed review of important influencing factors and how they affect enduser markets. 4.2 Global Market Size and Growth An overview of resulting coatings demand by region and segment. 9 Aircraft 10 Marine Coatings A succinct overview of the market's definition, size, value, technologies and drivers. Forecasts to 2015 and the outlook to 2020 are included. 4.3+ Markets by segment A detailed assessment of demand for coatings within each market segment. 5 Suppliers 5.1 Suppliers Global Position 6 Outlook 6.1 Forecast Commentary Developments since 2009 and summaries of key trends expected to drive future coatings demand Packaging & General Industrial 6.2 Forecast Data Comprehensive forecasts to 2020 by segment, technology and region. 15 Metal Packaging Coatings 7 Glossary Definitions of terms used in the text. 8 Terms and Conditions 11 Protective Coatings 12 Industrial Wood Coatings 13 Agriculture, Construction and Earthmoving 14 Pre-coated Metal Sheet 16 General Industrial Coatings 17 Coatings for Plastics Who are the key suppliers, globally and regionally? The following pages are samples from the study. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-4 Scope and Samples Executive Summary Chapter Contents 1. Overview — Executive Summary The Executive Summary is included with orders for the complete study. It provides market values and sizes for the Global Industrial Coatings Market segment by segment as well as a Global Summary. It includes trend analyses based on research from 2006 to 2009. A Preliminary Executive Summary was published at the start of this study. The final Executive Summary, incorporating the results of the research for all chapters, will be published at the conclusion of the study. Introduction Global Summary Automotive OEM Automotive Refinish Motorcycles Trucks, Buses and Other Vehicles Rail Aircraft Marine Coatings Protective Coatings Industrial Wood Coatings Agriculture, Construction and Earthmoving Pre-coated Metal Sheet Metal Packaging Coatings General Industrial Coatings Plastic Coatings Terms and Conditions Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-5 Overview Executive Summary Summary Trend Data Summary Trend Data Global Industrial Coatings by Region (2005 – 2009) Global Industrial Coatings by Market million tonne 2005 2006 2007 2008 2009 Europe, Middle East, Africa • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• Americas • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• Asia Pacific • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• •• ••• ••• •• ••• ••• •• ••• ••• •• ••• ••• •• ••• ••• 6.1 7.3 2.5 -8.1 2005 2006 2007 2008 2009 Solventborne • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• Waterborne • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• UV Coatings ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• • ••• • ••• • ••• • ••• • ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• •• ••• ••• •• ••• ••• •• ••• ••• •• ••• ••• •• ••• ••• 6.1 7.3 2.5 -8.1 2005 2006 2007 2008 2009 Transport • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• Construction and Infrastructure • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• Packaging and General Industrial • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• •• ••• ••• •• ••• ••• •• ••• ••• •• ••• ••• •• ••• ••• 6.1 7.3 2.5 -8.1 (tonne) Overall Coatings Demand % Change Global Industrial Coatings by Technology (2005 – 2009) (tonne) Powder Electrocoat Film Others Overall Coatings Demand % Change Global Industrial Coatings by Category (2005 – 2009) (tonne) Overall Coatings Demand % Change Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 1-4 Overview Executive Summary Protective Coatings Chapter 11. Protective Coatings Leading Suppliers of Protective Coatings ► AkzoNobel (Netherlands) ► Jotun (Norway) ► Hempel (Denmark) ► PPG (United States) ► Sherwin-Williams (United States) ► Carboline (United States) Part of RPM Protective Coatings fall into three categories: Infrastructure; Oil, Gas and Chemicals; Industrial and Other Process Industries. The coatings covered by this chapter are applied to steel and concrete substrates to provide corrosion resistance, fire protection and to protect structures exposed to hazardous operating conditions from environmental damage (hazardous conditions are those classified as C3 and above by ISO 12944). The global market for Protective Coatings in 2009 was worth approximately €•.• billion driven by coatings consumption of around •.• million tonnes (•.• billion litres). The market experienced 2.7% CAGR for the period 2006 to 2009. As Protective Coatings covers a wide range of markets the drivers will vary for each segment. However, in general terms the overall macro demand drivers are: Government policies relating to investment in infrastructure and the economic stimulus packages proposed and implemented in response to the economic crisis of 2008 and 2009. The global prices for major commodities (i.e. oil, gas and metals). High prices drive investment in exploration and production and revenue generated allows the commodity producing countries to invest in infrastructure. Harmonisation of global regulatory requirements and regional legislation. Service life performance and the requirement to ensure efficient compliance with quality and environmental demands imposed on corrosion protection. Solventborne technologies constitute the major part of the coatings used in the Protective Coatings market. Whilst waterborne coatings have a 12% share of the total Protective Coatings market, they account for less than 2% of the coatings used on steel but more than 30% of those used to protect concrete. There has been little or no growth in the use of waterborne coatings for either substrate since 2006. Pipe coatings are included in this chapter for the first time; fusion bonded epoxy powder coatings have the main technology share. Overall, powder coatings account for around 3% technology share. There is a growth in the use of high solids solventborne coatings in Europe and North America, but medium solids coatings are still used to a significant amount in both these regions. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 1-20 Overview Global Consumption of Protective Coatings (2009) Executive Summary Protective Coatings Infrastructure accounts for approximately 40% of Protective Coatings consumption. The oil and gas industry is the next largest segment, accounting for around 35% of demand. Substantial levels of growth are expected in the Middle East and Asia Pacific as the countries modernise their infrastructure. A high level of growth is expected in Brazil due to government policy of awarding majority of contracts to domestic players. Infrastructure in the United States is aging and is attracting considerable investment to update. The five year economic development plans of countries such as China and India make infrastructure a major focus. The Chinese 12th Five Year Plan 2011 to 2015 is based is on the assumption that GDP will grow at a rate of approximately 8% per year. This level of growth will drive investment in all the key Protective Coatings Sectors. Brazil is expected to invest in infrastructure for the 2016 Olympics and the 2014 World Cup. Region 2009 tonne Share % CAGR % 2015 tonne Europe, Middle East, Africa ••• ••• ••.• •.• – •.• ••• ••• ▲ Americas ••• ••• ••.• •.• – •.• ••• ••• ▲ Asia Pacific ••• ••• ••.• •.• – •.• ••• ••• ▲ •.• – •.• • ••• ••• ▲ Share % CAGR % 2015 tonne •••• Outlook Total • ••• ••• Technology 2009 tonne •••• Outlook Solventborne Medium Solids ••• ••• ••.• (•.•) – (•.•) ••• ••• ▼ Solventborne High Solids ••• ••• ••.• •.• – •.• ••• ••• ▲ Waterborne ••• ••• ••.• •.• – •.• ••• ••• ▲ •• ••• •.• •.• – •.• •• ••• ▲▲ •.• – •.• • ••• ••• Powder Total • ••• ••• ▲ Solventborne High Solids includes 100% solids Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 1-21 Scope and Samples Economic Indicators / Regulations Chapter Contents 2. Overview — Economic Indicators 3. Overview — Regulations These chapters consolidate information taken from the study chapters concerning the macroeconomic and regulatory environments that affect each of the markets. Presented with the Executive Summary to subscribers of the complete study, they combine to provide valuable information on key economic trends, underlying market drivers and regulatory influences on the Global Industrial Coatings Market. Economic Indicators Regulations 1 Introduction 1 Introduction 2 Key Economic Indicators 2 Regulation Categories A B C D E 2.1 Chemicals Management A Europe B North America Economic Trends Consumer Activity Industrial Activity Agriculture Trends Construction Trends 3 Glossary 4 Terms and Conditions 2.2 Volatile Organic Compounds (VOC) Emissions A Europe B Americas C Asia Pacific 2.3 Classification and Labelling A Globally Harmonized System of Classification and Labelling of Chemicals (GHS) B Classification, Labelling and Packaging (CLP) Regulation 2.4 Industry Related Regulations by Sector Global Industrial Coatings Markets 2010 – 2020 3 Glossary 4 Terms and Conditions © PRA 2011 Page 0-9 Overview Consumer Confidence Index Economic Indicators B Key Economic Indicators Consumer Activity The Global Consumer Confidence Index provides a comparative measure of global confidence. Economic indicators relating to retail spending levels, employment, private consumption and investment all provide useful indicators of consumer activity. In line with economic performance, consumer confidence levels appear higher in the emerging economies than for their advanced counterparts. Consumer Confidence Index Most major economies recovered from the recession in late 2009 and early 2010. France and Germany emerged in Q2 2009, while America returned to growth in Q3 2009. However, consumers still appear to lack confidence in full economic recovery and spending patterns have still not returned to pre-crisis levels in many markets. This can be attributed to mixed messages from policy makers. The Nielsen Global Consumer Confidence Index provides an indication of consumer confidence. The latest survey found that consumer confidence had fallen in 25 of the 52 countries covered in Q4 2010 suggesting a pessimistic end to a year that had shown signs of positive recovery in the first half. Source: IMF Retail Spending annualised % change of 3-month moving average The index finished 2010 at 90 points having peaked at 93 points in Q2 2010. Latin America was the world’s most optimistic region at 100 points, followed by Asia Pacific at 97 points, reflecting strong growth prospects in emerging economies. The highest index score was India at 131 points. Conversely, Europe exhibited the lowest levels of consumer confidence at 78 index points and North America at 83 points. According to the IMF, private consumption recovered strongly in emerging economies but the advanced economies have lagged. Investment excluding construction experienced a return to growth in advanced economies, suggesting longer-term considerations are driving activity. This is encouraging for employment and consumption levels in the medium to long-term. Retail Spending Data from the IMF suggests that retail sales, which declined considerably in response to the recession, have recovered globally in 2010. Emerging economies exhibited stronger growth in retail spending than the advanced economies, and contributed to growth in retail sales around the globe. Source: IMF However, the loss of consumer confidence in the latter part of the year resulted in downward trends for all economies. Low consumer confidence, high unemployment, and reduced disposable incomes are constraining spending in the advanced economies. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 2-6 Overview Economic Indicators Key Economic Indicators Regional Shares of the European Construction Market Construction in Europe Total EU construction activity was worth €1,173 billion in 2009 with Germany, Spain and France leading the region. The largest share of activity was attributed to non-residential construction (31%) followed by maintenance (29%), infrastructure construction (22%) and residential construction (18%). Germany is the largest construction market in Europe by market size. In 2009 construction output in Germany was €245 billion accounting for 21% of the European market and nearly 11% of the country’s GDP. The recession was only felt in Germany from the beginning of 2009 when industry turnover and construction orders dropped sharply. Source: FIEC New House Starts in Key Markets: Europe % Change The volume of residential construction investment fell dramatically in the UK and Spain in 2009, 27% and 24.5% respectively. The construction market in Spain and France totalled at €163 billion and €161 billion respectively in 2009. New house starts in each country’s market began to decline in 2007 reaching the bottom by 2009 with Spain’s house starts declining by nearly 60% in 2008 and 2009. Non-residential construction declined sharply in all European markets by an average 17% to18% year-on-year in 2009. Changes in Investment for Residential Construction (2005 – 2012) 2005 2006 2007 2008 2009 2010 2011 2012 5.8 6.2 4.8 -2.3 -8.1 -2.5 1.3 2.4 -3.7 6.2 -1.7 -1.8 -1.0 3.5 1.6 2.0 Italy 5.3 4.1 0.5 -3.1 -9.3 -3.4 0.5 1.8 Spain 6.1 6.2 2.5 -10.7 -24.5 -16.6 -3.6 -0.3 -3.6 9.0 0.2 -23.4 -27.0 7.9 8.6 3.3 (% Change) France Germany UK Changes in Investment for Non Residential Construction (2005 – 2012) 2005 2006 2007 2008 2009 2010 2011 2012 France 3.2 5.6 6.9 2.6 -8.5 -1.8 4.1 6.3 Germany 4.3 10.3 8.5 3.0 -16.1 6.0 3.7 3.6 Italy -0.3 3.3 2.0 -5.8 -17.6 6.0 3.2 3.6 Spain 7.7 7.8 3.9 -3.1 -18.5 -2.7 4.8 5.2 17.9 -7.1 12.5 -1.1 -18.8 2.3 6.1 7.0 (% Change) Source: OECD UK Source: OECD Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 2-20 Overview Regulations Regulation Categories VOC Content Limits: Europe VOC Content Limits Fixed by Directive 2004/42/CE Subcategory Coatings VOC g/l Preparatory and Cleaning Products Preparatory products Pre-cleaners 850 200 Bodyfillers/Stoppers All types 250 Primers Surfacers/Fillers and general primers Wash Primers 540 780 Topcoats (each layer) Basecoats, direct gloss, clearcoats, 3-stage topcoats 420 Special Finishes Aerosols, scratch-resistant clears, interior finishes 840 Reference Measurement Methods for VOC Content Parameter Unit Test Method & Date of Publication VOC content g/l ISO 11890-2 (2002 - revised 2006) VOC content where reactive diluents are present g/l ASTM D 2369 - 2003 Where a refinish operation uses more than 500 kg solvent per year, it comes under the regulation of the Solvent Emissions Directive (SED). The full definition of these terms as outlined in the Directive, are shown in the glossary to this chapter. All of the major refinish suppliers have invested significantly in training their customers to use the new compliant products The industry was given plenty of warning that the new limits were going to come into force so the coatings manufacturers were able to develop compliant coatings in preparation for the implementation of the Directive. Many of the European body shops were using the compliant coatings well before the 1 January 2007 deadline. All of the major refinish suppliers have invested significantly in training their customers to use the new compliant products, so the transition to the new coatings was very smooth. The application properties are very similar to the older solventborne coatings, if not better, and the new application equipment gives better productivity. The cost of the compliant coatings is 15% to 20% higher than the older products, but they require less volume to achieve the required finish and so overall coating cost is the same. This need for lower volumes has negatively affected the volume growth in this market over the last five years, but the value has remained static. Some growth in refinish has occurred in the commercial transport sector and offsets lower volumes in passenger cars. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 3-29 Overview Regulations B ISO 12944 Categories of Atmospheric and Immersive Service Conditions Corrosion risk Atmospheric Immersion Regulation Categories Construction and Infrastructure Standards and Regulations Concerning Steel The choice of technology to be used is influenced greatly by regulatory requirements and factors such as the operating environment, the level of corrosion risk and the substrate to be painted. Environments, which can be broadly categorised as general atmospheric exposure and immersion service conditions, are covered by ISO 12944. C1 Very low C2 Low C3 Medium C4 High ISO 12944 Paints & Varnishes: Corrosion Protection of Steel Structures by Protective Paint Systems (parts 1-8) (1998) provides a more detailed break-down of service conditions; six categories of atmospheric corrosion and three categories for immersion in water and soil. C5-I Very high (Industrial environment) Typical Atmospheric Service Conditions C5-M Very high (Marine environment) Im 1 Immersion in fresh water i.e. freshwater lakes Im 2 Immersion in sea or brackish water Im 3 Buried in soil ISO 12944 Coating Lifetime Classifications Classification Lifetime High Over 15 years Medium 5 to 15 years Low 2 to 5 years Classification Typical Environment Examples C1 Rural areas. Heated buildings, neutral atmosphere Heated buildings: offices, schools, shops, hotels C2 As C1 but where there is a higher risk from moisture in unheated buildings Unheated buildings: warehouses, sports and exhibition halls C3 Urban and industrial atmospheres. Moderate sulphur dioxide levels. Production areas with high humidity and some air pollution Dairies and breweries. Land based wind turbines interior. Some exterior C4 Industrial and coastal. Chemical processing plants Chemical plants, swimming pools, coastal shipyards, bridges over water; Land based wind turbines and exterior C5-I Industrial areas with high humidity and aggressive atmosphere. Buildings or areas with almost permanent condensation and high pollution spheres Oil refineries and chemical plants, pulp and paper, water treatment plants, coastal infrastructure C5-M Marine, offshore, estuaries, coastal areas and high salinity Offshore oil and gas rigs, wind turbines and coastal infrastructure Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 3-40 Scope and Samples Automotive OEM Chapter Contents 4. Transport — Automotive OEM 1 Executive Summary 4 2 Introduction 4.1 Global Market Drivers and Trends A Automotive Vehicle Production B Performance of the Global Economy C Household Disposable Income D Oil Prices and Costs of Raw Material Inputs E Growing Environmental Awareness and Green Mobility F Availability of Finance 2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn 3 Technology 3.1 Automotive Supply Chain and Material Substrates Markets 5 4.2 Principal Automotive Producers A Toyota 3.3 Current Technology B General Motors (GM) C Volkswagen AG (VW) A Electrocoat Layer D Renault-Nissan Group B Primer Surfacer Layer E Ford Motor Company C Basecoat Layer F Hyundai Motor Company D Clearcoat Layer G Fiat-Chrysler Group E Single Finish Coat Layer H Honda Motor Company F Comparative Layer Costs and Economics of Supply I PSA Peugeot-Citroën 3.4 New Developments and Standards J Suzuki Motor Corporation A New Developments in Coating Processes 4.3 Global Market Size and Growth B Other Developments A Automotive OEM Coatings Demand in Asia Pacific C Standards B Automotive OEM Coatings Demand in Europe, Middle East and Africa C Automotive OEM Coatings Demand in the Americas Suppliers 5.1 Suppliers Global Position 6 Outlook 6.1 Forecast Commentary 6.2 Forecast Data 7 Glossary 8 Terms and Conditions 3.2 The Body Coating Process Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-14 Transport Automotive OEM Technology Typical Automotive Body Coating Process 3.2 The Body Coating Process The coating processes used by the automotive industry for metal bodies and plastic components differ. Coating of bodies is carried out in-house by the OEM whereas plastic components (see Chapter 17: Coatings for Plastics) are normally supplied to the manufacturer ready finished by the Tier 1 or 2 suppliers. All coatings used by the Tier 1 and 2 suppliers must be fully approved by the OEM. Although there are some variations depending on company manufacturing strategies and production line design, all of the mass-production vehicle manufacturers typically adopt a similar coating process. The standard approach is a three or four coat process, the coatings layers being: 1. Electrocoat 2. Primer surfacer 3. Top coat. Between coats, the body will normally undergo a manual sanding operation to provide a smooth base for the application of subsequent coats. This is particularly important before the application of the top coat to ensure a high quality finish. The top coat can be either one coat of a solid colour top coat; or one colour basecoat followed by a clearcoat. Before painting, the vehicle body passes through a rigorous inspection, known as the ‘body in white’ operation. The vehicle shell passes through a brightly lit white room and is fully wiped down by visual inspectors using cloths soaked in hi-light oil, which allows inspectors to identify defects in the body panels. The shell is then immersed and cleaned of all residual oil, dirt and contaminants. The top coat can be either one coat of a solid colour top coat; or one colour basecoat followed by a clearcoat Once the vehicle body has been cleaned, it moves through a drying booth before receiving the electrocoat. The body again enters a drying booth before being prepared for the final coating operations. The body will normally undergo manual sanding operations after the application and curing of the electrocoat and the primer surfacer to provide a smooth base for the application of subsequent coats. Automation of coating lines is growing and external body surfaces are increasingly spray-painted by robots. Automotive OEMs are starting to use robots for the internal surfaces to further reduce operating costs, but still with a manual touch-in facility to coat difficult areas that provides an additional on-line quality inspection stage. Each of the separate coating layers are cured at temperatures exceeding 135ºC (275ºF) before the application of the next layer, with the exception of the basecoat. The basecoat is only dried at ambient or elevated temperature before application of the clearcoat, the two layers then being fully cured in one operation. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 4-8 Transport Automotive OEM Global Vehicle Manufacturing by Major Country Producer in 2006 and 2009 (million units) A Markets Automotive Vehicle Production Worldwide automotive vehicle manufacturing output declined as a result of the recession by 4.6% in 2008 and 12% in 2009 to around 58.3 million vehicles produced. The industry recovered strongly in 2010 and production output increased by over 25% to over 72 million vehicles. This growth is driven mainly by the emerging markets in the Asia Pacific region, where China has overtaken Japan and the US to become the largest single country producer of automotive vehicles in the world. The Asia Pacific region accounts for over 45% of vehicles produced. Western Europe is the next largest regional industry, accounting for around 25% of vehicle output in 2009 followed by North America, which produced just under 15% of global vehicle output. The industry is highly competitive with a number of well established manufacturers. Many suppliers offer their products to the global market competing in a number of vehicle categories. Typically it takes between three and five years to design and build a new vehicle. There are two significant trends shaping the global automotive industry: Increasing competition Localisation of production The level of competition in the automotive industry is intense and consolidation has resulted in an increase in larger groups competing to supply the market. The competitive intensity increases as more manufacturers become larger. In 1995 nine automaker groups produced 80% of global output, which did not change significantly for the next ten years. However, between 2005 and 2010 the number of manufacturer groups supplying 80% of world output reached twelve. Competitive pressures are expected to continue increasing as industry dynamics change due to further consolidation and new entrants in the emerging economies; it is expected that 15 manufacturer groups will supply 80% of global output by 2020. The volume of locally produced vehicles is increasing as manufacturers seek to maximise the effectiveness of their supply chains. Data produced by IHS Automotive suggests that the number of vehicles manufactured in the areas where they were sold rose from about 50 million in 2005 to 60 million in 2010. The global volume of locally produced vehicles is expected to reach 80 million by 2015 and 90 million by 2020 with most of the increase being due to expanding production in China. In contrast, vehicle import levels have remained fairly constant at between 12 million and 13 million units per year over the period 2005 to 2010. The regional redistribution of automotive production, primarily driven by the emerging markets, is a long-term trend that accelerated during the economic downturn and is expected to intensify by 2020 due to regional demand dynamics and political drivers. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 4-25 Transport Automotive OEM Outlook Forecast World Coatings Demand by Segment 2010-2020 Forecast Coatings Demand by Product Segment 2010-2020 (million litres) 2010 2011 2012 2013 2014 2015 2020 Europe, Middle East & Africa •••.• •••.• •••.• •••.• •••.• •••.• •••.• The Americas •••.• •••.• •••.• •••.• •••.• •••.• •••.• Asia Pacific •••.• •••.• •••.• •••.• •••.• •••.• •••.• Overall Coatings Demand •••.• •••.• •••.• ••••.• ••••.• ••••.• ••••.• (million tonne) Forecast Coatings Demand by Product Segment 2010-2020 (million litres) 2010 2011 2012 2013 2014 2015 2020 Passenger Cars •••.• •••.• •••.• •••.• •••.• •••.• ••••.• Light Commercial Vehicles •••.• •••.• •••.• •••.• •••.• •••.• •••.• Overall Coatings Demand •••.• •••.• •••.• ••••.• ••••.• ••••.• ••••.• Forecast World Coatings Demand by Technology 2010-2020 (million tonne) Forecast Coatings Demand by Technology 2010-2020 (million litres) 2010 2011 2012 2013 2014 2015 2020 Solventborne •••.• •••.• •••.• •••.• •••.• •••.• •••.• Waterborne •••.• •••.• •••.• •••.• •••.• •••.• •••.• •.• •.• •.• •.• •.• •.• •.• Electrocoat •••.• •••.• •••.• •••.• •••.• •••.• •••.• Overall Coatings Demand •••.• •••.• •••.• ••••.• •••• ••••.• ••••.• Powder coatings Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 4-71 Scope and Samples Automotive Refinish Chapter Contents 5. Transport — Automotive Refinish 1 Executive Summary 4 2 Introduction 4.1 Global Market Drivers and Trends A Road Safety Evolution B Motor Insurance Industry C Car Scrapping Schemes D Company Fleet Market E Passenger Car Market F Refinish Product Marketing 2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn 3 Technology 4.2 Global Market Size and Growth A Automotive Refinish Coatings in the Americas B Automotive Refinish Coatings in EMEA C Automotive Refinish Coatings in APAC 3.1 Current Technology A Body Fillers and Putties B Primers and Primer Surfacers C One-Coat Topcoats D Basecoats E Clearcoats 4.3 Suppliers Global Position 3.2 Regional Coating Technology A Coatings Technology in Europe, Middle East and Africa B Coatings Technology in the Americas C Coatings Technology in Asia Pacific 3.3 Standards and New Developments A Regulations B UV Curable Refinish Products C Colour Matching Global Industrial Coatings Markets 2010 – 2020 Markets 5 Outlook 5.1 Forecast Commentary 5.2 Forecast Data 6 Glossary 7 Terms and Conditions © PRA 2011 Page 0-18 Transport Automotive Refinish C Regional Variations in Colour Preferences: World Technology Colour Matching Accurate colour matching remains an important aspect of this market; even the same OEM colour applied on different production lines can vary. The coating manufacturers are investing in improving their colour matching systems and are adding new colours to their ranges to meet the demand from the purchasers of new cars for new, more exotic colour effects obtained from, for example, speciality colour shift pigments. The choice of vehicle colours for passenger cars varies across the world according to culture and taste but metallic finishes (silver) and black are consistently popular along with white. Automotive Refinish Products — Regional Variations in Colour Preferences for 2010 Global % Europe % US % Japan % South America % China % South Korea % Silver 26 17 17 24 33 33 33 Black 24 24 18 22 23 31 26 Grey 16 19 15 5 13 18 14 Blue 5 9 9 10 3 2 3 Red 6 7 11 3 9 4 4 Light brown / Beige 3 5 5 3 3 1 1 White 16 14 21 28 13 9 18 Green 2 1 2 1 3 1 1 Others 2 4 2 4 0 1 0 Colour Source: DuPont Automotive Systems – Global Colour Popularity Report Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 5-22 Transport Automotive Refinish Consumption of Coatings for Automotive Refinish by Category: Asia Pacific C (million litre) Markets Automotive Refinish Coatings in APAC The market for Automotive Refinish coatings in Asia Pacific is estimated to be over ••• million litres (•••,••• tonnes) following continued growth during the recession with around 3% CAGR over the period 2006 to 2009. This resulted in an estimated market value of around €1.6 billion. Asia Pacific Consumption of Coatings for Automotive Refinish by Category 2005 – 2009 (000 litres) 2005 2006 2007 2008 2009 • ••• • ••• • ••• • ••• • ••• Primers •• ••• •• ••• •• ••• •• ••• •• ••• Basecoat / colour coat •• ••• •• ••• •• ••• •• ••• •• ••• Clearcoat •• ••• •• ••• •• ••• •• ••• •• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Filler Total % change •.•% •.•% •.•% •.•% The Asia Pacific region was the best performing market for Automotive Refinish coatings during the recession and in 2010, the market has continued to grow, reaching almost ••• million litres (•••,••• tonnes) with an approximate value of €1.8 billion. Average Sales Price of Coatings by Category: Asia Pacific ► Filler 5.00 /kg ► Primers 6.00 /litre ► Colour coat 10.00 /litre ► Clear coat 8.00 /litre The region presents a mix of market dynamics, ranging from the mature, relatively static markets of Japan, Korea and Australia to the high growth markets of China and India, with annual growth rates of 10% to15%. Other developing markets, such as Thailand, also exhibit good growth rates at around 7% per year. The growing spending power of populations in the developing countries of Asia Pacific, together with the increasing importance of the region as a car manufacturing centre, will ensure continued growth at a comparatively faster pace than the markets in Europe and North America for the next ten years. The types of coating used in this market range from similar technologies as used in North America, Europe and Japan. Traditionally nitrocellulose and air-dry alkyd paints have been used in China and India and are still available in these countries. However, there is a growing environmental awareness and use of low-VOC compliant technology, both high solids and waterborne basecoats in both these countries and across the Asia Pacific region. The Chinese and Indian markets are both exhibiting rapid growth as car ownership per head of population increases with higher levels of consumer spending power. An important distinction between the Chinese market and the mature market of Japan is the large number of first-time buyers. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 5-42 Transport Market Leaders for Automotive Refinish Coatings: Korea Automotive Refinish Markets AkzoNobel has significantly boosted its presence in the Chinese automotive market after acquiring Changzhou Prime Automotive Paint Co. Based in Jiangsu province, Prime is one of China’s largest vehicle refinish suppliers and a leader in the fast-growing mid-market segment. This sector is estimated to double in size within the next five years. AkzoNobel is also the preferred global supplier of car refinishes to the Chinese automotive manufacturer Great Wall Motors. AkzoNobel’s Refinishes business has focused mainly on China’s premium and commercial vehicle refinish sector. PPG is active in China and extended its distribution network with the acquisition of Bonny Paints in 2008. DuPont, BASF and Nippon Paint are all present in the market. BASF has a customer service centre in Shanghai and Shenyang to improve its capabilities for this market. There are also a large number of Chinese companies supplying the domestic market. The top local supplier is Onwings from Donglai Coating Technology (Shanghai). South Korea represents the third largest Automotive Refinish market in the Asia Pacific region and has been growing, reaching a value of around $125 million in 2009. Further growth is forecast as the number of cars increases. The market has a range of local as well as multi-national companies supplying products. KCC Paints is the market leader in this country with an estimated 34% of the local market. NOROO Paint & Coatings is the next largest player and has been actively developing its Automotive Refinish business, generating $32 million sales in 2009 and securing 25% of the market. NOROO have joint ventures in China, Saudi Arabia and Vietnam and introduced a waterborne basecoat technology called HiQ Water Color to the market in 2009. Market Leaders for Automotive Refinish Coatings: India BASF has also established a technical centre for developing advanced eco-friendly coatings for the automotive industry in South Korea. Their plans are to conduct research and development of waterborne coatings for use by automotive OEMs as well as the technology for an integrated coating process, which yields more costefficient results. This in turn will help the transition to use globally accepted waterborne basecoat technology in the Automotive Refinish market. India presents a significant opportunity as the Automotive Refinish coatings segment is one of the country’s fastest growing areas in the industrial paints market. The potential opportunity offered by this market results in intense competition in the coatings supply industry. Automotive Refinish coatings, which constitutes approximately 30% of overall automotive coatings demand in India, is witnessing tremendous growth due to: The fast growing second-hand used vehicle market A preference for high value, high performance coating technologies, such as polyurethane paints, substituting the traditional forms of refinishing paints such as nitrocellulose and synthetic alkyds. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 5-44 Scope and Samples Motorcycles Chapter Contents 6. Transport — Motorcycles 1 Executive Summary 4 2 Introduction 4.1 Global Market Drivers and Trends A Motorcycle Production B Performance of the Global Economy C Household Disposable Income D Population and Urbanisation Growth E Growing Environmental Awareness F Availability of Finance 2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn 3 Technology 3.1 Current Technology A Liquid Coatings: Solventborne and Waterborne B Powder Coatings C Electrocoat D UV Coatings 3.2 Coatings Technology by Application A Metal Components B Plastic Components C In-Mould Coating Markets 5 4.2 Principal Motorcycle Producers A BMW Motorrad B Bajaj Auto C Harley Davidson D Honda E Kawasaki F Piaggio Group G Suzuki H Yamaha Suppliers 5.1 Suppliers Global Position 6 Outlook 6.1 Forecast Commentary 6.2 Forecast Data 7 Glossary 8 Terms and Conditions 4.3 Global Market Size and Growth A Motorcycle Coatings Demand in Asia Pacific B Motorcycle Coatings Demand in the Americas C Motorcycle Coatings Demand in Europe, Middle East and Africa Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-22 Transport Motorcycles A Motorcycle Colour Preferences: World Technology Liquid Coatings: Solventborne and Waterborne The coating technologies used in the motorcycle industry is a combination of those used in the Automotive OEM and Automotive Refinish markets. The choice will normally depend on the type of component being coated and the volumes being produced for specific components. The colour scheme is also a consideration. One-component Technologies One-component coatings are used primarily for coating metal parts and are mainly oven-cured coatings based on polyester or acrylic; the same types as those used in the Automotive OEM industry. Metallic base coats used for both metal and plastic parts are also one-component types. Primer surfacers are used direct to pretreated bare metal for corrosion resistance, or over an electrocoat primer where higher performance and appearance is required. Solventborne coatings are normally based on polyester, cross-linked with a melamine hardener. Medium or high solid types are used depending on VOC regulations. Waterborne primer surfacers are also based on polyester melamine technology. The majority of primers are solventborne. Base coats and colour coats are increasingly important as OEMs use more complex pigments (such as pearlescent natural and synthetic micas or other special effect pigments) and increase their range of colour bases for new models. For solid colour finishes typically applied to smaller two wheeler models, a single finish coat of a solventborne acrylic melamine top coat is used. Waterborne coatings are rarely used for these finishes. For higher value machines, a two coat base and clear system is applied. Metallic or pearlescent colour schemes are also common for larger machines. One-component base coats are used in both oven cured, onecomponent coating processes and when a two-component coating clearcoat is used. Base coats and colour coats are increasingly important as OEMs use more complex pigments and increase their range of colour bases Solventborne, oven-cured base coats can be based on acrylic, polyester or acrylic/polyester combinations, depending on the coating supplier, with CAB being incorporated into metallic colour formulations to provide consistent colour development during spray application. These are cross-linked with melamine or blocked isocyanate. Base coats used with two-component coating processes are based on thermoplastic acrylics. Waterborne base coats are based on a combination of acrylic and polyurethane dispersions, cross-linked with melamine or blocked isocyanate for oven cure processes or based on air dried binders when used with twocomponent clearcoats. Clearcoats are exclusively solventborne in this market as waterborne types do not meet the performance and appearance requirements. One-component clear coats are based on acrylic, normally cross-linked with melamines. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 6-6 Transport Motorcycles Motorcycle Manufacturers: India India is still the second largest producer with the output exceeding 11 million units, accounting for over 20% of motorcycle production in the Asia Pacific region. Domestic sales of motorcycles and other PTWs have increased in India since 2006, contributing to production growth of 7.3% CAGR over the period 2006 to 2009. ► Bajaj Auto ► Escorts Group ► Hero Group ► Honda Motorcycle & Scooter India (HMSI) ► Ideal Jawa ► Kinetic Engineering ► Lohia Machinery ► Mopeds India ► Royal Enfield ► TVS Motor Motorcycle Manufacturing Output: India million units Markets Motorbikes account for over 80% of the total market. A number of factors have influenced consumer preferences: motorbikes have replaced scooters as the preferred means of individual transport due to their higher load capacity; motorbikes are more fuel-efficient and aesthetically appealing. Two-wheeler exports have grown at around 25% CAGR between 2005 and 2010, exceeding one million units in 2009. The Indian industry landscape changed in late 2010 when market leader Hero Honda, the long-standing joint venture between Hero Group and Honda Motor Company, was dissolved. Hero Group bought Honda’s 26% stake and has plans for re-branding in order to target both the domestic and highly competitive international markets. Honda Motor, which has a plant in the north of India, is building a second plant in Rajasthan, another northern state, and has plans to build a third facility in 2013 with capacity for 1.2 million vehicles. A new facility is expected to start manufacturing in 2011 with an annual production capacity of 600,000 units, which will double in March 2012. These new facilities will supply the domestic market and export to Latin America. Bajaj Auto was the second largest two-wheeler manufacturer in India before the dissolution of Hero Honda. The market is likely to see increased competition over the next few years as a result, particularly in the luxury motorbikes segment, including premium sports bikes. With over 285,000 estimated millionaire households at the end of 2011, India is expected to have the largest growth in total millionaire wealth of the emerging economies to 2020 and the luxury motorbike segment is expected to be the fastest growing domestic market. Harley Davidson, Ducati, Hyosung and BMW have all announced intentions to compete on the Indian market for premium motorcycles. Royal Enfield, Bajaj Auto, Suzuki, HMSI and Mahindra are also planning to introduce new products. While Ducati plans to bring premium motorcycles into India, Harley Davidson and South Korea's S&T Motors have already established plants to assemble their vehicles within the country as government tax policies make domestically produced motorcycles far more attractive. One feature of the Indian market is the large three-wheeler segment, where the vehicles are used for passengers and freight to cope with urban congestion. Three-wheeler production has grown by over 9% CAGR over the period 2005 to 2009 to reach around 620,000 units. Bajaj Auto is the largest domestic player in the three-wheeler segment, accounting for 95% of exports in 2010. The company export markets include: Sri Lanka, Egypt, Nepal and Bangladesh. Piaggio Vehicles, of Italy, leads in terms of volume sales and recently launched its 1.3 tonne three-wheeler Ape in India. Mahindra & Mahindra also recently launched its threewheeler passenger vehicle Alpha Passenger. Force Motors, a joint venture between Bajaj Tempo and MAN, is a leading player in the goods carrier segment. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 6-16 Transport Motorcycle Production 2009: Americas (000 units) Motorcycles Markets Grupo Elektra is the largest domestic producer or motorcycles through its Italika brand, and has had sales growth since 2005, claiming a share of 55% in 2009. The company produced 61,000 motorcycles in 2008, rising to 123,000 in 2009. Export markets are: Honduras, Peru, Guatemala, and Brazil. International players like Honda, Yamaha, Suzuki and Harley Davidson are all present. In 2010, Polaris Industries announced the opening of a new plant in Mexico. Polaris is the parent company of Victory Motorcycles in the US. The United States suffered a collapse in production output of 40% during 2009. The production volume contracted by 19.5% negative CAGR over the period 2006 to 2009, falling from 1.1 million units to 0.6 million. Sales were also recorded at low levels, showing a declining trend for the past four years. The US is also the largest market for All Terrain Vehicles (ATVs) in the world, where they are used for sport and hunting. According to the Motorcycle Industry Council, domestic sales declined by over 14% in 2009 to less than half of their 2006 level. Sales of highway motorcycles were 383,000 units in 2009 compared to 660,000 and 724,000 units sold in 2008 and 2007 respectively. While the recession affected all geographical markets, the US market was worst affected as the motorcycle is mainly used for sports and recreation. There are a number of motorcycle manufacturers producing low-volume custom-made, unique and expensive models to this market. As consumers curtailed discretionary spending, the industry suffered and in 2009, Texas-based American IronHorse filed for bankruptcy. Another US manufacturer of high-style, custom vehicles, Big Dog Motorcycles, closed in April 2011. Motorcycle Production Trends 2005–2010: Americas The most important domestic producer in the US is Harley Davidson, which experienced a significant fall in revenues due to the recession. Production numbers for Harley Davidson also indicate the pressures in the domestic market as the proportion of units destined for export has continued to increase from 21.8% in 2006 to 37.5% in 2010. Argentina experienced a dramatic increase of 58% in 2006 but has slowed to an average annual growth rate of between 7% and 8% since. After a 5.5% drop in production in 2008, the industry recovered with positive growth of over 7% in 2009 and 8% in 2010 to pass pre-crisis production levels. Peru is another market with potential for growth. Production increased by 15% in 2007 and 16% in 2008 before declining by 3.2% in 2009. The industry showed signs of recovery in 2010 when output increased by 3.2% to reach 5,000 units of annual production. According to the National Census of Manufacturing Establishments, there are 78 motorcycle assembly facilities in Peru, one third of which is based in the capital Lima and Callao, the most important port in Peru. The most popular brands are: Honda, RTM, Bajbaj and Wanxin. In 2009, over 81% of imported motorcycles came from China, 14.8% from India, 2.4% from Brazil and less than 1% from Japan. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 6-21 Scope and Samples Trucks, Buses and Other Vehicles Chapter Contents 7. Transport — Trucks, Buses and Other Vehicles 1 Executive Summary 4 2 Introduction 4.1 Global Market Drivers and Trends A Performance of the Global Economy B Freight Trends C Urbanisation 5.1 Suppliers Global Position 4.2 Production of Trucks, Buses and Other Vehicles A Truck Manufacturing B Trailer Production C Bus and Coach Production D Other Vehicles Production 6.2 Forecast Data 2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn 3 Technology 3.1 Current Technology 3.2 Technology Systems A Solventborne and Waterborne Liquid Coatings B Electrocoat C Powder Coatings D Other Coating Systems 3.3 Truck Coatings A Chassis B Cabins C Bodies and Trailers 3.4 Bus and Coach Coatings A Chassis B Bodies Markets 5 6 Suppliers Outlook 6.1 Forecast Commentary 7 Glossary 8 Terms and Conditions 4.3 Principal Truck and Buses Producers A Isuzu Motors B Daimler AG C Tata Motors D Volvo Group 4.4 Global Market Size and Growth A Truck and Bus Coatings Demand in Asia Pacific B Truck and Bus Coatings Demand in the Americas C Truck and Bus Coatings Demand in Europe, Middle East and Africa 3.5 Other Vehicles 3.6 New Developments and Standards A New Developments in Vinyl and Decal Technologies B Standards Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-26 Transport Trucks, Buses and Other Vehicles Technology Use of Plastics and Composites Use of Plastics and Composites in a Typical Truck Whilst the majority of truck and bus components are manufactured from metal, there is a rapidly developing trend for greater use of composite and plastic parts, particularly in North America and Europe. These materials offer the potential for vehicle weight reduction, reduced fuel consumption and a wider range of styling options. Plastic body parts allow OEMs to offer differentiated products with operational advantages and strong visual impact. Composite and plastic materials generally have better resistance to climate and adverse environments, but have relatively low resistance to impact and buckling when compared to metal substrates. Consequently, they tend to be used for non-structural components and where impact absorption, rather than those where impact resistance, is required. Despite these material constraints, the coatings industry can expect a progressive change from metals towards plastic and ‘smart’ materials over the next ten years. Currently, it is estimated that plastic parts account for up to 40% of the total coatings consumption for a typical cabin, depending on the design. Adoption is expected to increase as plastics find wider adoption in the emerging industries. Many countries in the developing world still manufacture truck bodies and cabs almost entirely in metal. In some parts of India, China and Africa, large truck bodies are still produced using wooden components mounted onto a modern vehicle chassis. The pace of adoption for modern materials is also likely to be faster in these markets, where producers benefit from technology transfer from joint ventures and partnerships with established OEMs. The comparative costs of metal versus plastic components will be weighed against the benefits to lower running costs, which are achieved from the reduced overall vehicle weight. Luxury coaches and special buses produced in low volumes often have the entire front and rear ends manufactured from GRP, which allows the manufacturers to produce more aerodynamic and aesthetic designs. In contrast to the Automotive OEM industry, where the plastic components are supplied by the Tier 1 suppliers fully finished, these main truck and bus components are normally coated by the OEMs on the same paint lines as the metal components. As a result, the coating technologies and the volume demand are included in this chapter. Further information on the coatings used for the smaller plastic components, used in cabin interiors by truck and bus manufacturers, are included within the figures for Chapter 17: Coatings for Plastics. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 7-7 Transport Trucks, Buses and Other Vehicles Markets Germany Truck Production Output: Germany (000 vehicles) Germany is the largest market for trucks in Europe. Road haulage accounts for 95% of the total freight industry in value terms. After a relatively stable growth in truck production, which is attributed to increased levels of freight transportation, the annual output of trucks dropped in 2009. According to the VDA, German manufacturers reduced production by an average of 52% in response to falling orders, which resulted in overall reported output falling by 65% in 2009 to 89,000 trucks. Prior to the 2009 collapse, industry output had exceeded 200,000 units per year, and peaked at 257,000 units in 2008. There were signs of recovery in 2010, when new registrations of heavy trucks increased by 13.4% to reach 39,209 units. Reported output reached 134,000 units, but return to pre-recession levels is not expected before 2015. There is an industry concentration around Bavaria and Baden-Württemberg in the south of Germany. Germany is home to the world’s largest truck manufacturer Daimler, based in Stuttgart. The company represented over 55% of industry output in 2009, producing over 49,000 trucks from its German plants. Trucks are sold in Europe under the Mercedes-Benz brand. Due to rising demand in the emerging markets, Daimler Trucks received increased orders in 2010 and the company’s plants were operating at almost full capacity. This is welcome news following a fall in sales of 45% in 2009. Daimler also produces trucks in Portugal and Turkey. Domestic Truck Producers: Germany ► Daimler ► MAN MAN experienced a decrease of 30% in 2009 sales, but reported an increase in new orders for commercial vehicles of 68% in 2010 due to improved conditions in Europe and continuing expansion in Brazil. The company produced just fewer than 15,000 vehicles in Germany during 2009, representing almost 17% of the industry’s output. Europe remains MAN’s most important region, generating 56% of all orders, where the main markets are Germany, the UK, France and Russia. The Americas represent 27% of sales and the remainder coming from Asia Pacific. The main production facilities are in Augsburg (Bavaria) in the south and Ruhr (North RhineWestphalia) in the northwest of the country. German manufacturers produce about 27% of trucks domestically and 73% at their foreign facilities. The most important locations for German manufacturers abroad are China and Brazil. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 7-49 Transport Trucks, Buses and Other Vehicles A Asia Pacific region generates the highest demand for associated coatings... just over •••,••• tonnes Markets Truck and Bus Coatings Demand in Asia Pacific In common with the Automotive OEM coatings market, the Asia Pacific region generates the highest demand for associated coatings in terms of estimated quantities consumed. In 2009 just over •••,••• tonnes (••• million litres) of coatings were used for Trucks, Buses and Other Vehicles. Not only does the Asia Pacific account for over 65% of worldwide demand, but it was the only region to generate positive growth throughout the recessionary period. The estimated market demonstrated growth of 5.3% CAGR over the period 2006 to 2009, reaching a value of over €442 million. Coatings Demand for Asia Pacific 2005 – 2009 (tonne) Truck and Bus Coatings Demand: Asia Pacific (000 tonne) 2005 2006 2007 2008 2009 Truck •• ••• •• ••• •• ••• •• ••• •• ••• Trailer •• ••• •• ••• •• ••• •• ••• •• ••• Bus •• ••• •• ••• •• ••• •• ••• •• ••• ••• ••• ••• ••• • ••• •• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••.• •.• •.• •.• Other Vehicles Total % Change The coatings demand in the Truck segment returned modest growth of 2% in 2009 over the previous year, following strong growth in each of the previous periods, to reach almost •• thousand tonnes (•• million litres). This represents over 62% of the regional coatings demand. The majority of this is generated by the leading truck production industry in China. Demand in this segment exhibited a 10.2% CAGR over the period 2006 to 2009, making it the best performing segment along with Trailers. Trailers demand is closely correlated to that of heavy trucks, as the units require the tractor unit for movement. Consequently, this segment exhibited similar growth pattern to that of Truck coatings demand, and reached ••,••• tonnes (•• million litres) in ••••. Bus coatings’ demand was artificially inflated in the early part of the review period due to Chinese investment in transit systems prior to the 2008 Olympics. This resulted in some degree of market re-balancing in 2008, but demand is still increasing largely thanks to the development of affordable urban transport and public transport infrastructure in Asia Pacific, particularly in China and India. The decline of 41% in 2008 contributed to an 11.1% negative CAGR for the period 2006 to 2009. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 7-80 Scope and Samples Rail Chapter Contents 8. Transport — Rail 1 Executive Summary 4 2 Introduction 4.1 Global Market Drivers and Trends A Passenger Industry and Rail Freight Performance B Urbanisation C Growing Environmental Awareness D Availability of Finance 2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn 3 Technology 3.1 Current Technology 3.2 Technology Systems A One-Component (1K) Coatings B Two-Component (2K) Coatings C Fillers 3.3 Coatings Technology by Application A Passenger Carriages and Multiple Units B Locomotives C Freight D Refurbishment 3.4 General Coating Technology Trends A Passenger Carriages and Locomotives B Freight Cars Markets 4.5 Rail Coatings Market in Americas A Market Drivers B Market Dynamics, Size and Growth 4.6 Rail Coatings Market in Asia Pacific A Market Drivers B Market Dynamics, Size and Growth 4.2 New Build Rolling Stock A Rolling Stock Manufacturing and Trends in Europe, Middle East and Africa B Rolling Stock Manufacturing and Trends in the Americas C Rolling Stock Manufacturing and Trends in Asia Pacific D Rail Refurbishment 4.3 Global Market Size and Growth A Freight Rolling Stock Coatings B Passenger Rolling Stock Coatings C Locomotive Rolling Stock Coatings D Rolling Stock ‘Below the Solebar’ Coatings 5 Suppliers 6 Outlook 6.1 Forecast Commentary 6.2 Forecast Data 7 Glossary 8 Terms and Conditions 4.4 Rail Coatings Market in Europe, Middle East and Africa A Market Drivers B Market Dynamics, Size and Growth Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-30 Transport Rail Introduction Regional Share of Global Freight Carried by Volume 2.3 Impact of Economic Downturn The characteristics of the global rail supply markets remain North America, Asia Pacific and Europe. The impact of the economic crisis varied across these regions, and is evident in four areas: Freight volumes Business restructuring New orders Economic stimulus support Freight volumes declined. As trade volumes declined, global freight volumes fell by 15%. In the important Americas market, railroad operations declined by 10% to13% and in North America by as much as 18%. The resulting fall from the peak in 2008 retuned the industry to 2005 levels. In Europe, after several years of upward trends the recession resulted in declines in rail freight transportation during 2008 and 2009, falling by 2% and 17% respectively. New Orders for Railroad Equipment Placed with Leading Suppliers Billion € Reduced freight volumes in these regions generated overcapacity and a large number of locomotives and freight cars were left idle. By contrast, the Asia Pacific performed well during the same period and experienced growth of 6% in 2008, a slowdown of just 2% on the previous year. Moderate growth of 2% in rail freight volumes was maintained in 2009. There were signs of recovery in 2010, as the global rail freight sector expanded by over 7% to reach a volume of nearly ten billion freight tonne kilometres. However, a return to 2008 levels is not expected until beyond 2012. New orders declined. The leading manufacturers experienced a decline in new order values of around 10% in 2009 as a result of the recession. This offset growth experienced in new orders during the previous year. However, new orders increased in value terms by over 41% in 2007, which contributed to 8.4% compound annual growth rate (CAGR) over the period 2005 to 2010. Therefore, impact of the economic downturn on the train manufacturing industry was less pronounced that other sectors and 2010 saw approximately €35.5 billion in 2010 in new orders. The industry expects continued order momentum in 2011and 2012. UNIFE, the Association of the European Rail Supply Industry, suggests that 44% of the global rolling stock manufacturing segment is attributed to replacement orders. Replacement orders are expected to be the main drivers for overall growth in rolling stock production to 2020. Asia is expected to contribute to growth though network expansion in line with urbanisation and linking main population centres. The Middle East and Africa region is also contributing to orders for new rolling stock for both European and Asian manufacturers. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 8-4 Transport Rail Technology 3.3 Coatings Technology by Application Technology Shares of Global Passenger Carriage and Multiple Unit Coatings A Passenger Carriages and Multiple Units Rolling stock designed for carrying passengers has four distinct areas in which the coatings are required to offer different performance properties. These are: Exterior sides Interior Roofs Below the solebar – chassis members, bogies, traction bars, etc. Exterior Side Coatings The sides of the carriages are the most visual parts of the rolling stock, and are finished in a variety of different colour schemes to reflect the livery of the operating company. The key performance requirements for exterior carriage body coatings are: The most widely used coating system used in most parts of the world consists of a two component epoxy primer followed by a two component polyurethane finish. High gloss and gloss retention Resistance to UV radiation and temperature cycles Chemical resistance, in particular to strong cleaning materials Scratch and chip resistance Rail companies operating urban services will also require the gloss and colour of the coating to be unaffected when graffiti is removed with strong solvents. The most widely used coating system used in most parts of the world consists of a two component epoxy primer followed by a two component polyurethane finish. Some specifications require an intermediate primer surface layer, again based on two component polyurethane. The finish can be either a one coat system or, where graffiti resistance is required, a coloured base coat followed by a clear coat. Whilst the basic technologies are common globally, the form in which they are used varies from region to region. The general trends are: In Europe, waterborne epoxy primers and waterborne polyurethane finishes are almost exclusively used. The clear coat is either waterborne or solventborne, depending on individual preference. The manufacturers of Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 8-10 Transport Rail Outlook 6 Outlook 6.1 Forecast Commentary Coating Demand Trend in 2010 In 2010, rail coatings reached ... ••• million litres and a value of €••• million. As the global economy showed signs of recovery and world GDP returned to growth in many markets, improved production of key commodities traditionally transported by rail increased the demand for transportation and rolling stock. New freight cars orders and deliveries showed signs of recovery in the important US market. Freight cars scrapped due to end of life contributed to a decrease of inactive rolling stock from 29% of the total rail capacity to about 21% by the beginning 2011, which means that about 30% of idle vehicles returned to operation. This generated estimated growth in rail coatings of around 7% in 2010, bolstered by an 18% increase in the new build coatings category and a 3% increase in refurbishment coatings. In 2010, rail coatings reached an estimated •• million litres (•••,••• tonnes) with a value of around €460 million. Rolling Stock Trends to 2020 The global economic recovery will continue to be unbalanced with GDP in the developed and emerging economies at below 3% and above 8% respectively to 2012. However, we believe that the rail manufacturing industry and demand for associated coatings will not mirror the projected economic growth profile. Looking forward to 2015 and 2020, regional specific factors will shape the growth of the rolling stock market. These include: The level of implemented infrastructure development projects Rolling stock replacement rates Regional levels of rail modernisation National preference for rolling stock types. For example, Russia and the United States need to replace aging freight cars that have been in operation for nearly 30 years. These two countries are also planning to introduce very high-speed trains, but they may not be as committed to this as Western Europe and Asia Pacific. Having already implemented major modernisation projects for their passenger fleet, when locomotive hauled and push-pull trains were replaced by multiple units, the demand for passenger coaches will decline in Western Europe. In Asia Pacific, the recent development of very high-speed (VHS) trains in China will be accelerated by further expansion to 20,000 km by 2015. India has big plans for modernisation of rolling stock and rail infrastructure development will further augment the growth level in China. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 8-61 Scope and Samples Aircraft Chapter Contents 9. Transport — Aircraft 1 2 Executive Summary Introduction 4 4.1 Global Market Drivers and Trends A Global Aircraft Fleet B New Aircraft Production C Aircraft Size and Substrates D Maintenance, Repair and Overhaul of Aircraft 2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn 3 Markets Technology 3.1 Impact of Coatings on Flight Dynamics A The Dynamics of Flight B Effect of Coatings on Flying Efficiency 3.2 Technology Drivers A Cost Considerations B Weight Reduction C Environmental Impact 4.2 Global Market Size and Growth A Aircraft Coatings Demand in the Americas B Aircraft Coatings Demand in Europe, Middle East and Africa C Aircraft Coatings Demand in Asia Pacific 4.3 Suppliers Global Position 5 3.3 Current Technology A Civil Aircraft Coatings B General Aviation Aircraft Coatings C Helicopter Coatings D Other Aircraft Coatings E Maintenance, Repair and Overhaul Coatings Outlook 5.1 Forecast Commentary 5.2 Forecast Data 6 Glossary 7 Terms and Conditions 3.4 Standards and New Developments A Standards and Regulations B New Developments Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-34 Transport Aircraft B The critical consideration for aircraft coatings is the smoothness of surface finish achieved by the topcoat Technology Effect of Coatings on Flying Efficiency The key factor with drag is air flowing over the airframe. Consequently, the critical consideration for aircraft coatings is the smoothness of surface finish achieved by the topcoat. The effect can be considerable and led to Boeing’s decision, for example, to use only one paint colour on the engine nacelle inlet of the latest 787 Dreamliner. Boeing found that the tiny edge created where one colour is laid over another affected airflow to such an extent that using only one paint colour could save as much as 22,000 gallons (more than 100,000 litres) of fuel per year. If that is accrued over the expected lifetime of the aircraft it creates savings of 880,000 gallons (or 4 million litres) per aircraft. The accumulated weight of coatings can also be significant. For example, the coatings dry-weight on the exterior of the Airbus A380 is approximately 1,600 pounds (725 kgs) compared to the exterior coatings dry-weight on a Boeing 747 of approximately 1,060 pounds (480 kgs). Typically, the exterior coatings on these aircraft consist of an epoxy primer, high solids topcoat, separate wing coating and a small quantity of area-specific coatings. The interior structural coatings can add a further 1,600 pounds (725 kgs). This gives a total coatings dry-weight on the aircraft of around 4,260 lbs (1,930 kgs) that has to be overcome by lift. Any reduction in weight that does not affect coating functionality will have an accumulating cost benefit. As a general guide, every kilogramme of weight removed from a commercial jet aircraft will save around 25 gallons of fuel per annum. New developments in nano-coatings offer an alternative to the traditional convention of smooth finish. Tiny dimples around the area of high drag forms a thin layer of slightly turbulent air between the surface skin and the boundary layer of the airflow over the surface. This layer has the effect of insulating the aircraft from some of the worst affects of local drag thereby reducing the overall drag coefficient to improve overall performance. Whether this high-end technology will be cost effective for widespread adoption by civil airline operators remains to be seen, but EasyJet are already trialling nano-coatings supplied by tripleO claimed to reduce carbon emissions by up to 2% and deliver fuel efficiencies. Gliders also trade height for speed and range. Anything that can increase speed for an equivalent loss of height will be of interest to the serious, competitive glider pilot. Increased speed will also extend the competitive range of a glider, so the premium cost of such a surface may be justifiable. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 9-6 Transport Leading Civil Aircraft Manufacturers by Output in 2010: World ► Airbus (France) ► Boeing (United States) ► Bombardier (Canada) ► Embraer (Brazil) Aircraft B Markets New Aircraft Production North America has traditionally been the main producer of aircraft. This position was challenged with the emergence of Airbus during the 1970’s. Deregulation of the US market resulted in ‘legacy carriers’ facing stiff competition from new entrants based on the low-cost airline model. The emergence and success of low-cost carriers has changed the demand profile for aircraft producers. Demand is expected to diversify over the next five years with almost 50% of global demand generated in developing countries. The increased demand for aircraft in the MEA and Asia Pacific regions, coupled with attractive labour costs, has resulted in manufacturing operations shifting to South America and Asia, particularly China where the aerospace industry has experienced significant growth. Large Civil Aircraft Airbus Deliveries and 2010 Order Book There are two major OEMs for large civil aircraft. These are: Airbus Industries The Boeing Company The industry is traditionally very competitive and consolidation has resulted in the two major manufacturers essentially creating a duopoly for the new large civil aircraft market. The recession severely affected the demand for new aircraft and this led to even sharper competition. Airbus Industries had forward orders for 644 aircraft at the end of 2010, with over 500 delivered in the same period. The manufacturing locations are: United Kingdom – two wing and pylon assembly centres located in Broughton and Filton France – the structures for the wing box are produced in Nantes Spain – the empennage and composite materials are manufactured in Getafe and Illescas Germany – the final assembly plant is located in Hamburg. The order backlog and lead times to manufacture have protected manufacturing output as measured by reported deliveries, which maintained an annual average growth rate of 4% over the period 2006 to 2010. The rate of delivery increases did slow from 6.6% in 2008 to 3.1% and 2.4% in 2009 and 2010 respectively. Source: SpeedNews Coatings and livery are applied at the final assembly plant in Germany. Air France Industrie and Sabena Technics are the two main approved MRO applicators. Interior coatings are mainly supplied by Mankiewicz. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 9-30 Transport Estimated coatings demand... •.• million litres with a value of around €70 million Aircraft Markets New aircraft production generates an estimated coatings demand of over • million litres (>•••• tonnes) per year. The largest segment of the OEM Aircraft Coatings market is civil aircraft, represented by Airbus and Boeing, generating demand for over •.• million litres (>•,••• tonnes) per year. The sheer volume of smaller aircraft in the general aviation segment generates significant demand for Aircraft Coatings, which peaked at just over •.• million litres (•,••• tonnes) in 2008 before the recession resulted in a sharp decline in production output and associated coatings consumption, which fell to just under •••,••• litres (•••• tonnes) in 2009. The majority of this was within the North American market, which in 2009 represented almost 60% of all turboprop and piston general aviation aircraft manufactured worldwide and almost 50% of total business jet output. World Consumption of Coatings for Aircraft by Segment 2005 – 2009 (000 litres) 2005 2006 2007 2008 2009 • ••• • ••• • ••• • ••• • ••• General Aviation Aircraft ••• ••• • ••• • ••• ••• Rotorcraft ••• ••• ••• ••• ••• Others ••• ••• ••• ••• ••• Maintenance, Repair and Overhaul (MRO) • ••• • ••• • ••• • ••• • ••• Total • ••• • ••• • ••• • ••• • ••• Civil Aircraft Although using less coatings per aircraft than OEMs, the sheer volume of operational fleets and repaint frequencies results in the majority of coatings demand being for MRO operations. The fastest growing markets for MRO activities are in Asia Pacific (where Singapore is the established hub), the Middle East and South America. The recession resulted in consolidation in the airline industry. As some operators merged, a number of aircraft in the combined fleets required new paint schemes to reflect the new brand. This helped to reduce the impact on MRO coatings demand. Airline operators also use their fleet branding to gain an advantage in an increasingly competitive environment and to create consumer “trust” in the airline, which creates further demand for Aircraft Coatings. Although OEM coatings are typicaly applied during final assembly, the application of coatings to airframes and structural components can take place at paint shops throughout the supply chain, making it difficult to provide market details at the country level within the scope of this study. Regional demand is discussed. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 9-40 Scope and Samples Marine Chapter Contents 10. Transport — Marine 1 Executive Summary 4 2 Introduction 4.1 Global Market Drivers and Trends A The Global Fleet B Shipbuilding C Ship Repair and Maintenance D Seaborne Trade E The Global Supply Chain F Ship Construction Finance 2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of the Economic Downturn 3 Technology 3.1 Deep Sea and Coastal A Shop Primers B Antifouling Coatings C Cargo Hold Coatings D Tank Coatings E Topside and External Superstructure F Ship Interiors and Engine Room 3.2 Yachts and Super-Yachts A Yachts B Super-Yachts 3.3 Containers 3.4 Standards and New Developments Global Industrial Coatings Markets 2010 – 2020 Markets 4.2 Global Market Size and Growth 4.3 Market Segmentation: Size, Drivers and Key Features A Deep Sea B Coastal C Offshore Supply Vessels D Leisure Craft: Yachts and Super-Yachts E Containers 4.4 Suppliers and Global Position 5 Outlook 5.1 Forecast Commentary 5.2 Forecast Data 6 Glossary 7 Terms and Conditions © PRA 2011 Page 0-38 Transport Marine Coatings Introduction 2.2 Macro Drivers The Relative Economics of Shipbuilding to Ship Repair The major demand driver of the marine industry is the level of economic activity and global trade in commodities and raw materials. Seaborne trade is closely linked to Gross Domestic Product (GDP) where the percentage increase is generally a multiple of 2.5 to 2.7 of GDP growth. Shipbuilding The major supply drivers of the industry are: The capacity of shipbuilding yards, as the time to construct a vessel means that supply is unable to react quickly to demand The cost of construction where higher raw material inputs will reduce demand due to higher vessel prices Access to vessel financing, the economic life of vessels. The more complex the vessel, the less sensitive the market is to labour cost. In 2006 the global shipbuilding industry was operating at full capacity with most yards sold out until at least 2009. The market growth in 2006 to mid 2008 was due to: huge demand for freight capacity driven by China, low financing costs and investors reacting to market trends. The principal drivers for 2010 onwards for shipbuilding are: Ship Repair An increase of consumer confidence in Europe and North America, Chinese demand for imports of raw materials and exports of consumer goods Increase of demand within the Chinese domestic market. The 12th Chinese Annual Plan for 2011 to 2014 is forecasting approximately 8% GDP growth Increased availability of funds for investment in new vessels, which can then be built at a profit. Ship repair activity depends on: The level of shipping activity. One consequence of the crisis has been the extension of maintenance intervals The emergence of lower cost repair yards and availability of skills The number of retired vessels. Ships that have been taken out of service will either be scrapped or put back into service. Those returning to service will require overhaul, including complete replacement of the antifouling coating. Global Industrial Coatings Markets 2010 – 2020 © PRA 2010 Page 10-7 Transport Marine Coatings Markets 4.2 Global Market Size and Growth Global Consumption of Marine Coatings (2009) Coatings Demand by Region and Activity The shipbuilding industry has seen a dramatic decline of order intake in 2009 as new orders placed fell from approximately 170 million GT in 2007 to just over 86 million GT in 2008 and 18 million GT in 2009. However, due to the average time taken to build a new vessel the demand for marine coatings has been protected from the full effects of the recession and there was an estimated 6% growth in new build coatings demand in 2009. In addition, demand for coatings from commercial shipbuilding experienced a surge in 2007 due to the impact of regulations for ballast tank coatings. This resulted in the approximate split of 1:1 between shipbuilding to maintenance, repair and overhaul (MRO) shifting to approximately 2:1. Global commercial shipbuilding coatings demand experienced a compound annual growth rate (CAGR) of 14% with an estimated consumption of over ••• million litres (•••,000 tonnes) in 2009. It should be noted that we have expanded our fleet analysis from commercial vessels of over 100,000 GT in the previous study to vessels of over 2,000 GT to provide a more comprehensive review of coatings demand. This results in an upward revision on trend data of around ••• million litres. The revised figures for 2005 and 2006 are included below. The Global Market for Commercial New-Build Marine Coatings (000 litres) 2005-2009 2005 2006 2007 2008 2009 Europe & MEA •• ••• •• ••• •• ••• •• ••• •• ••• Americas •• ••• •• ••• •• ••• •• ••• •• ••• Asia Pacific ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• •• ••• •• ••• •• ••• •• ••• •• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• •• •• •• •• Rest of World Total Commercial Coatings % change Global Industrial Coatings Markets 2010 – 2020 © PRA 2010 Page 10-58 Transport Marine Coatings E Container Output 000 TEU Markets Containers In 2006, the global production of containers was 3 million TEU and 185,000 reefer containers. China produced about 90% of the world’s containers but relied on imports for more than half of the steel plate (of less than two millimetres thick) used. The production of containers increased significantly in 2007 reflecting the boom in exports from China. In 2008 the impact of the recession resulted in significant cost cutting measures. The reduction in seaborne trade in 2009 negatively impacted on container demand as containership operators adopted conservative ordering strategies. Although China remained the major producer of new containers, a number of factories were closed. This resulted in a considerable fall in output down 36% in 2008 and a further 89% in 2009. Total coatings demand in this segment (including demand from both new build and refurbishment activity) is estimated to be around •.• million litres (••,000 tonnes) of marine coatings, representing a fall of 40% CAGR over the period 2005-2009. Estimated Coatings Demand for Containers 2005-2009 2005 2006 2007 2008 2009 Litres (000) ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Tonnes ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• •• •• •• •• % change As operators divested idle containers in 2009 for recycling, the growth in seaborne trade and signs of recovery in 2010 led to container shortages. This has led to an upsurge in container demand and associated coatings demand of over ••% year-on-year from 2009 to 2010 We expect this to decelerate in 2011 and, taking into account new containerships coming online in 2013-2014, expected rates of global GDP growth and aggregated analyst forecasts, we expect container output to return to peak levels around 2015. Global Industrial Coatings Markets 2010 – 2020 © PRA 2010 Page 10-72 Scope and Samples Protective Coatings Chapter Contents 11. Construction & Infrastructure — Protective Coatings 1 Executive Summary 3 2 Introduction 3.1 Steel Protection A Prefabrication or Shop Primers B Primer Coatings C Intermediate Coatings D Top Coats 4.1 Global Market Drivers and Trends A Infrastructure B Oil and Gas C Petrochemicals and Refining D Industrial and Other Processing 3.2 Concrete Protection A Coating Types 4.2 Global Market Size and Growth 2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn A Government Funding B Oil and Commodity Prices Technology 4 3.3 Coatings Technology by Application A Bridges B Water Treatment C Power Stations (excluding Wind Turbines) D Wind Turbines E Oil Refineries and Chemical plants F Offshore Oil and Gas G Pipelines H Food Processing I Mining J Pulp and Paper 3.4 Standards and Developments A Standards and Regulations B New Developments Markets 4.3 Market Segmentation: Size, Drivers and Key Features A Transportation and Coastal Infrastructure B Water and Wastewater Treatment Infrastructure C Public Power Generation and Transmission Infrastructure D Oil Refineries, Petrochemical Plants and Storage E Oil and Gas Exploration and Production F Manufacturing and Other Processing G Intumescent Coatings 4.4 Suppliers and Global Position 5 Outlook 5.1 Forecast Commentary 5.2 Forecast Data Global Industrial Coatings Markets 2010 – 2020 6 Glossary 7 Terms and Conditions © PRA 2011 Page 0-42 Construction and Infrastructure Protective Coatings Estimated Share of Generic Coatings Systems Applied to Steel for Bridges 3.3 Coatings Technology by Application A Technology Bridges The principle factors that determine the level of corrosion risk are: Estimated Share of Generic Coatings Systems Applied to Concrete for Bridges Exposure to moisture: the level of corrosion risk will depend heavily on the local microclimate due to winds and weather conditions Exposure to a marine environment: based on the distance from the sea and on the microclimate Expose to salt: used in de-icing chemicals Airborne industrial pollution: older bridges may be at risk having been built at a time when the level of air quality was much less than it is today. Air quality still presents a serious problem in countries such as Russia, China and India The rate of corrosion can be assessed using ISO 9223 and the overall environment using ISO 12944. The choice of coating will depend on whether it is for a new build or for maintenance. New Build Coatings The selection of coating system for a new bridge is defined by the local specifications and regional environment. It is possible to make some generalisations. The time to first maintenance of a newly applied coating is now between 20 and 25 years. A general system used for the Protective Coating is: Primer Intermediate coat Top coat Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 11-31 Construction and Infrastructure Protective Coatings Markets Despite maturing shallow water areas, Gulf of Mexico oil production is projected to reach 1.8 million bpd by 2013, with growth resulting from successful exploration and development of reserves in the deeper. Deepwater production now accounts for 70% of all Gulf of Mexico oil production and 36% of gas production. Whilst the deep and ultra-deep water production is more expensive and risky, requiring floating platforms, the Gulf of Mexico is a well-established area with a large number of shallow fields requiring platforms that are fixed o the seabed. The EIA projects that US crude production volumes will increase to 2035. The majority is expected to come from deepwater offshore fields. A number of fields, such as Great White, Norman, Tahiti, Gomez, Cascade, and Chinook, either started producing in 2009 or are expected to start producing in the next few years. Most are in the Central Gulf of Mexico. Mexico is the second area after the North Sea where oil production is projected to decline by 2035. According to EIA, oil production in Mexico including offshore (80%) and onshore (20%) is expected to decline to approximately 1.4 million barrels per day by 2025. © Laoma | Dreamstime.com Leading Operators in North America ► Shell Offshore ► Anadarko Petroleum Corporation ► Chevron Corporation ► ATP Oil & Gas Corporation ► Eni SPA ► Marathon Oil Corporation ► Noble Energy Inc. ► Statoil Most of Mexico’s oil production occurs in the Gulf of Campeche, located off the south-eastern coast of the country. The two main production centres in the area include Cantarell and Ku-Maloob-Zaap (KMZ), with smaller volumes also coming from the fields off the coast of Tabasco state. In 2009 Cantarell and KMZ represented 57% of Mexico’s total crude oil production. Mexico has 222 fixed structures with an order book showing an additional 19 units. Mexican laws restrict foreign ownership of hydrocarbon resources and its resource policies have kept back overseas and domestic investment which results in production levels slowing down. It is assumed that these political barriers will not exist after 2015. PEMEX is a state-owned company and is the only petroleum operator in Mexico, holding a monopolistic position on natural gas exploration and production in the country. It is one of the largest oil and natural gas companies in the world. Canada has three oil projects off its Atlantic coastline, all located in the Jeanne d’Arc Basin. The basin has seen an increase in investment in recent years, with both White Rose and Hibernia announcing plans to expand production by incorporating satellite fields. Outside of the Jeanne d’Arc Basin, StatoilHydro announced in 2009 that it had discovered commercial quantities of crude oil at its Mizzen field in the Flemish Pass basin. In 2009, ExxonMobil submitted its proposed Hebron project for regulatory approval, which could come on stream as soon as 2017 and reach a peak production rate of 176,000 bbl/d. Operators at the Atlantic oil fields must contend with harsh natural conditions, including rough seas, seasonal icebergs, and extreme temperatures. These factors will require the application of high performance protective coatings with long life expectancy. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 11-97 Construction and Infrastructure Protective Coatings D Regional Share of Protective Coatings for Oil Refineries, Petrochemical Plants and Storage Markets Oil Refineries, Petrochemical Plants and Storage Representing around 20% of overall protective coatings consumption, Oil Refineries, Petrochemical Plants and Storage is the largest single industrial category. The coatings used to protect oil refineries and chemical plants are applied to storage tanks, containment areas, process units, and structural steel, high temperature areas (reactors, process plant and chimneys), pipelines, power generation plant and onsite water treatment facilities. The most significant areas to be coated in a refinery are the storage tanks; tank capacity is directly proportional to the processing capacity of the facility and coatings demand has been estimated based mainly on plant output as an indicator of size. The economic crisis had little effect on the demand for protective coatings in this industry segment as assets need to be maintained irrespective of volume throughput due to the harsh operating conditions and the industry health and safety regime. All companies have established maintenance schedules (including defined painting intervals) that results in a stable demand profile. At 20% of overall protective coatings consumption, Oil Refineries, Petrochemical Plants and Storage is the largest single industrial category ... with an associated value of €••• million. Over the period 2006-2009, protective coatings consumption had 2% CAGR. This resulted in an estimated market of almost ••• million litres (•••,000 tonnes) in 2009 with an associated value of €••• million and representing growth of almost 1.9% on the previous year. Protective Coatings Demand for Oil Refineries, Petrochemical Plant and Storage (2005-2009) 2005 2006 2007 2008 2009 Litres (million) ••• ••• ••• ••• ••• Tonnes (000) ••• ••• ••• ••• ••• •.• •.• •.• •.• % Change There have been only minor additions to refining capacity during the review period. The exception is China (from 7 million barrels per day to 8.6 million) and India (from 2.9 million to 3.8 million) contributing to strong regional growth that resulted in Asia Pacific taking 29% of protective coatings in volume terms. Only North America has a larger share with 30% of the market volume in 2009. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 11-127 Scope and Samples Industrial Wood Coatings Chapter Contents 12. Construction & Infrastructure — Industrial Wood Coatings 1 Executive Summary 4 2 Introduction 4.1 Global Market Drivers and Trends A Construction Trends B Consumer Activity C Furniture Production D Joinery E Flooring 5.1 Suppliers Global Position 4.2 Global Market Size and Growth 7 Glossary 4.3 Coatings for Wooden Furniture A Furniture Coatings Demand in Asia Pacific B Furniture Coatings Demand in Europe, Middle East and Africa C Furniture Coatings Demand in the Americas 8 Terms and Conditions 2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn 3 Technology 3.1 Current Technology 3.2 Technology Systems A Solventborne and Waterborne Liquid Coatings B UV Coatings C Powder Coatings 3.3 Coatings Technology by Application A Furniture B Joinery (Millwork) C Flooring 3.4 Standards Markets 5 6 Supplier Outlook 6.1 Forecast Commentary 6.2 Forecast Data 4.4 Coatings for Joinery A Joinery Coatings Demand in Asia Pacific B Joinery Coatings Demand in Europe, Middle East and Africa C Joinery Coatings Demand in the Americas 4.5 Coatings for Wooden Flooring A Flooring Coatings Demand in Asia Pacific B Flooring Coatings Demand in the Americas C Flooring Coatings Demand in Europe, Middle East and Africa Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-46 Construction & Infrastructure Industrial Wood Coatings Typical Coating Systems Used in Kitchen Cabinets The main coating technologies are summarised below, together with the type of furniture for which each technology is used: System Typical Use Nitrocellulose Indoor furniture 2K Polyurethane Technology Process Speed Advantages Disadvantages 4 Glossy Hard surface Alcohol resistant Thin films Low coating cost Poor light & solvent resistance High level of volatiles Poor chemical resistance Kitchen furniture Domestic and commercial furniture 2 High chemical & mechanical resistance Flexible Hard surface Scratch resistance Relatively expensive Limited pot life Acid Catalyst Kitchen furniture 4 High chemical & mechanical resistance Flexible Hard surface scratch resistance Formaldehyde emission Unsaturated Polyester Furniture 3 High grade glossy surface Scratch resistant High solids Thick film Light resistance Styrene emission Acrylic and PUD dispersions Kitchen furniture primers Domestic furniture 3 Low solvent Substrate wetting UV-curable PUD Kitchen furniture topcoats 4 Low solvent Substrate wetting UV-curable coatings, “100%” Flat pack furniture Kitchen worktops 5 Low solvent High chemical & mechanical resistance Flexible Hard surface scratch resistance Investment costs of the application equipment Where 5 = fastest and 1= slowest in terms of drying / curing rates Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 12-14 Construction & Infrastructure Industrial Wood Coatings Markets Kitchen Furniture Main Country Producers of Kitchen Cabinets by Share: World Kitchen cabinets have evolved over the past twenty years, as the role and function of the kitchen has been transformed into a family gathering space, often designed ‘open plan’ to share the main living area. Consequently, the design of kitchen units has become more important and they are offered in a wide range of styles and colours. Kitchen cabinets are supplied in three main types: Main Country Producers of Office Furniture by Share: World Ready assembled units in a set range of products, allowing kitchens to be designed on a modular basis Flatpack cabinets, also using a modular design base Custom-made cabinets individually made to meet specific consumer needs. The choice of cabinet type depends on budget, ease of fitting, available space and regional preference. The high share of ready-assembled units and constraints of custom-made cabinets has resulted in a localised supply for kitchen production. In contrast to the rest of the domestic furniture industry, production of kitchen cabinets is concentrated on a small number of major players within each region, resulting in higher levels of production intended for export markets. The main exporting nations are Germany, Italy, Canada and China. Luxury kitchen cabinets account for around half million units worldwide, with an additional one million of middle and middle-high end kitchen units exported. The recession resulted in Italian exports being reduced by 15% and German exports by 10% in 2009. The US is the largest importer of kitchen furniture with the import value peaking in 2006 at around €900 million but falling to €600 million by 2008 as the credit crunch impacted on the housing market. The next two biggest importing nations are France and the UK, with imports continuing to grow up until 2008 to levels of €380 million and €220 million respectively. Commercial Furniture The global office furniture market, supplying a range of wood, metal and upholstered furniture and storage units to the commercial, institutional and healthcare sectors was worth around €50 billion in 2009. The main manufacturing region is EMEA, which represents around 40% of global furniture production in value terms. The Americas region represents around 33% of global production, mainly due to the US as the single largest contributor to office furniture production with over 23% of world output in value terms. Production is highly concentrated with ten countries accounting for 70% of global production. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 12-49 Construction & Infrastructure Leading Joinery Coatings Markets: EMEA million litre Industrial Wood Coatings Markets Japan represents the third largest regional market for joinery coatings, which are estimated to be around •• million litres (••,000 tonnes) in 2009. With the activity on new housing slowing down, there is a growth in renovation and maintenance activity on existing housing stock. The proportion of maintenance, repair and renovation of the total construction market is around 25%. Longer term, joinery coatings demand is expected to benefit from new house starts in response to government incentives, changing demographics and housing needs and, in the short term, significant reconstruction following The Great East Japan Earthquake that occurred in 2011. Aluminium is the leading material used for windows in Japan, with over 80% market share followed by PVCu. Wood window frames are normally aimed at the high-end market. Japanese wood window frame manufacturers are typically small companies using imported timber. B Overall Production Shares of Window Frames and Doors: Europe Joinery Coatings Demand in Europe, Middle East and Africa The market for joinery coatings in the EMEA region generated estimated demand of around •• million litres (••,000 tonnes) in 2009 with a value of €••• million. Over 90% of coatings demand is for doors and around 5% for window frames. The remaining consumption is associated with trim such as skirting boards and architraves. The construction industry in Europe performed badly during the recession. The United Kingdom, Ireland, Denmark and Spain were worst affected. Government incentives and support initiatives were generally ineffective, and where positive impacts were felt they were short-lived. Consequently, demand for joinery coatings experienced declines in 2008 and 2009. European demand for joinery coatings is estimated to be around •• million litres (>••,000 tonnes). The share of PVCu window frames and doors is the highest in the world, whilst the share of wood represents the lowest regional demand. The highest market share for PVCu is found in the UK and Russia, where these substrates account for around 75% of units produced. As a leading regional producer of doors, Spain represents the largest market for joinery coatings. Production output peaked in 2007 at over 37 million units before falling to 20.5 million in 2009. Poland has more than 3,000 manufacturers of windows and doors where Inwido (Sweden), the largest producer in Europe, leads the local market. Wood and wood framed aluminium windows account for 45% of Poland’s joinery exports. Production of wood window frames in Italy during 2009 was just over six million units, significantly down from the peak of 2007 when over 14.5 million units were produced. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 12-77 Scope and Samples Agriculture, Construction and Earthmoving Chapter Contents 13. Construction & Infrastructure — Agriculture, Construction and Earthmoving 1 Executive Summary 4 2 Introduction 4.1 Global Market Drivers and Trends A Agriculture Trends B Construction Trends 2.1 Market Definition 2.2 Macro Drivers 4.2 Global Market Size and Growth 2.3 Impact of Economic Downturn 3 Markets 4.3 Agriculture Equipment A Market Drivers B Market Dynamics, Size and Growth Technology 3.1 Current Technology 3.2 Technology Systems A Solventborne and Waterborne Liquid Coatings B Powder Coatings C Electrocoat D Pigments 4.4 Construction, Earthmoving and Mining Equipment A Market Drivers B Market Dynamics, Size and Growth 4.5 Materials Handling Equipment A Market Drivers B Market Dynamics, Size and Growth 3.3 Coatings Technology by Application A Agricultural Equipment B Construction, Earthmoving and Mining Equipment C Materials Handling Equipment D Repair and Maintenance 4.6 Suppliers Global Position 3.4 General Technology Trends 6 Glossary 3.5 Regulations and Developments 7 Terms and Conditions Global Industrial Coatings Markets 2010 – 2020 5 Outlook 5.1 Forecast Commentary 5.2 Forecast Data © PRA 2011 Page 0-50 Construction & Infrastructure Agriculture, Construction and Earthmoving B Technology Use in Coatings for Construction, Earthmoving and Mining Equipment: World Technology Construction, Earthmoving and Mining Equipment Construction equipment can be broadly classified as: 1. Heavy and medium equipment: large capital items 2. Light equipment: smaller machinery items, trucks and tooling manufactured by small specialist companies Light equipment is often used in conjunction with the heavier capital equipment and operating environments result in similar coatings requirements for both. The surface finish quality must be excellent as the equipment is exposed to demanding operating conditions. The components that need to be coated range from large forged steel components to metal sheet and small plastic parts. It can be an expensive and time consuming process to get a coating system approved by OEMs. The items coated include: Technology Use in Coatings for Construction, Earthmoving and Mining Equipment: Regional The chassis Engine Cabin Wheels or track Other parts: including the excavator arms and bulldozer blades etc. Technology Use in Coatigns for Construction Equipment Coatings Technology by Region Solventborne Waterborne Powder coating E-coat Europe and Middle East Africa 70 8 14 9 North America 62 10 18 10 South America 85 0 10 5 Asia Pacific 80 0 10 10 Construction equipment can be used in a wide range of climatic conditions, from the high temperatures of the deserts of the Middle East to the low temperatures in northern Canada or Siberia. Each OEM has its own performance specifications against which coatings must be approved. The coatings must be capable of meeting these specifications over the full range of working environments. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 13-18 Construction & Infrastructure Agriculture, Construction and Earthmoving A Markets Agriculture Trends Environment and Climate World Food Prices (Index, 2002-04 = 100) The regional climate is a major determinant of agricultural output and crop yields are heavily influenced by variations in the weather. This has created a cyclical demand for related equipment; April to July is the principal period for agricultural output in the Northern Hemisphere and September to January in the Southern Hemisphere. Consequently, the peak selling season for agricultural equipment in the Northern Hemisphere, for example, is March to June and to ensure stock availability, dealers place their orders during the autumn and winter months. The impact of adverse weather patterns on agricultural output is well recognised. Recent adverse impacts, such as droughts, have been attributed to climatic change. These impacts are expected to become more prominent. As weather patterns become less predictable, crop yields fall placing pressure on farming industries. To counter the effects of regional weather cycles on demand for agricultural equipment, suppliers have established global supply markets. Localised manufacturing operations have been established to meet the local requirements for specialist equipment. Food Production and Prices Farming is a cyclical industry but a combination of factors has resulted in dramatic variances in recent years leading to volatility in both farm input and output prices. The markets for grain, for example, experienced poor global harvests in 2007 leading to low stocks, which in turn pushed up prices. The 2008 global harvest was much better and so prices fell accordingly. Source: FAO In 2006, prices of the world’s most popular food staples including wheat, corn, soya and rice began rising. In 2007 and 2008 world food prices experienced a dramatic increase, especially cereals, oils and dairy products. The United Nation’s Food and Agriculture Organisation (FAO) reported 56% increase in the world food price index from 2006 to 2008. The factors that contribute to price volatility include: Droughts, which negatively affected grain producing nations Falling world food stockpiles and grain reserves Rising oil prices Increased planting of crops for bio fuels Changing diet and strong rise of per capita meat consumption in developing countries. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 13-28 Construction & Infrastructure Construction Output Growth for Key Asia Pacific Markets 2005–2010 Agriculture, Construction and Earthmoving Markets Construction in Asia Pacific The Asia Pacific region performed strongest with an average annual growth rate of between 9% and 10% during the global recession. China and India showed the highest growth rate over the period 2005 to 2009. China has replaced Japan as the second largest construction market in the world and is expected to outpace the US around 2016 to become the world’s leading construction market. Total construction output is expected to remain relatively high, although growth will slow in the next two years to approximately 7% or 8% per year. Whilst the housing price level in China has not reached that of the US and UK, the trend is upward and houses have become less affordable. The Chinese government’s ambitious plans to build 36 million affordable homes over 2011to 2015 with €128.7 billion (1.3 trillion Yuan) allocated in 2011 could face financial challenges. The Chinese government requires builders to keep residential construction costs low. However, the rise in commodity and raw material prices, particularly steel, is likely to affect construction prices. The construction industry in India has been growing with an average growth rate of 9% to11% year-on-year and represents between 6% and 8% of the country’s GDP. Construction activity is stimulated by the government’s decision to let 100% Foreign Direct Investment (FDI) into the country’s property market. Construction Output Growth for Key Asia Pacific Markets 2005–2010 2005 2006 2007 2008 2009 2010 China 16.0 17.2 16.2 9.5 18.6 17.5 India 12.9 11.4 11.0 4.7 7.6 10.3 Japan 0.5 -0.1 -6.0 -8.1 -5.2 -6.9 Indonesia 7.5 8.3 8.6 7.4 7.0 6.7 Malaysia -1.5 -0.3 7.3 4.2 5.7 5.9 Philippines -5.8 9.9 20.0 8.0 9.4 9.4 Singapore 0.7 2.5 16.7 20.1 16.2 8.2 South Korea -0.3 2.2 2.6 -2.5 1.9 -0.4 Vietnam 10.9 11.0 12.2 -0.4 11.4 10.1 Australia 6.6 6.7 6.4 5.7 -2.4 5.2 Source: OEF Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 13-36 Scope and Samples Pre-coated Metal Sheet Chapter Contents 14. Construction & Infrastructure — Pre-coated Metal Sheet 1 Executive Summary 2 Introduction 5 5.1 Suppliers Global Position 2.1 Market Definition 6 2.2 Macro Drivers Outlook 6.1 Forecast Commentary 2.3 Impact of Economic Downturn 3 Suppliers 6.2 Forecast Data Technology 3.1 The Coil Coating Process 3.2 Technology Systems A Solventborne Liquid Coatings B Other Coating Technologies 7 Glossary 8 Terms and Conditions 3.3 New Developments and Standards A New Developments in Coil Coating B Standards 4 Markets 4.1 Global Market Drivers and Trends A Construction Activity B Design C Appliances and Metal Furniture D Transportation E Other 4.2 Global Market Size and Growth A Coil Coatings in Asia Pacific B Coil Coatings in Europe, Middle East and Africa C Coil Coatings in the Americas Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-54 Construction and Infrastructure Pre-coated Metal Sheet Introduction 2.3 Impact of Economic Downturn Coil coatings demand was dramatically affected by the global recession. Coil Coatings Supply Chain All application markets for pre-coated metal sheet, (construction, domestic appliances, transportation and metal furniture) are directly linked to macro economic conditions. Consequently, coil coatings demand was dramatically affected by the global recession. Construction was the worst affected as spending in real terms fell by almost 20% in 2009 due to the economic downturn. This led to signifiacnt declines in pre-coated metal output and associated coating demand. Industrial customers in all regional markets and application sectors reduced capital expenditures, resulting in declining order levels for steel and aluminium. Associated coil coating demand reached a low point at the end of 2008 and early 2009. Both steel and aluminium producers and the coil coating companies reduced capacity and headcount. Consequently, when the market recovered in 2010, coaters struggled to meet increased orders with the available manpower and production capacity. Transportation demand also declined across all sectors during the recession. In 2009, the production of heavy trucks fell by more than 18% whilst production of passenger cars and light commercial vehicles fell by 12% over the previous year. The major markets for recreational vehicles are in Europe and the US. Both were badly affected by the recession as consumers experienced tighter credit restrictions and pressure on personal finances. This led to severe downward pressures on the market and production declined by as much as 32%. Production output of domestic appliances was around 475 million units in 2009. The major markets for coil coatings in this sector are Europe, the United States and Japan. The European appliances market declined by over 6.5% in the period 2008 to 2009, whilst the North American and Japanese markets fell by approximately 8.5% and 10% respectively. Sales and production output of metal furniture also declined during the recession. Major producers of office furniture, such as Steelcase, reported weak financial performance in 2009 as business and consumer confidence in the developed markets was weakened. Falling demand resulted in production declines of 29% in the United States and almost 7% in Europe. Producers in the Asia Pacific benefitted from resilient demand. One of the biggest challenges for coil coaters during the recession was the lack of predictability over the supply of coatings. The paint industry suffered as raw materials derived from petrochemicals, minerals and metals were in short supply due to capacity cuts further upstream in the supply chain. The lack of certain ingredients, such as titanium dioxide, led to an escalation of coatings costs at a time when coil coaters faced cost pressures from their downstream customers, limiting the opportunity to pass on increases and placing pressure on margins. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 14-4 Construction and Infrastructure Pre-coated Metal Sheet Selected Coil Coating Companies with New and Existing Capacity: China (including Taiwan) China is the world’s largest single producer country of pre-coated metal sheet and the largest consumer of coatings in this market. The country consumed •••,••• tonnes in 2009 and •••,••• tonnes of coatings in 2010, exhibiting annual growth of about 6%. (000 tonne) Markets The coil coating industry was growing consistently at double digit annual growth until the recession. Similar growth is not expected to continue, but the country is expected to exhibit annual growth of around 8%. Growth in China can largely be attributed to government support and fiscal stimulus measures that contributed to increased domestic demand in recent years. It is estimated that the Chinese coil coating market has about 200 coil coating lines, but a large number of them are crude, hand built lines running at low speeds. There are only around 100 high-tech high-speed lines. Pre-Coated Metal Sheet Capacity Additions in China (tonne) Coil Coater New Pre-coated Metal Capacity Comments Yieh Phui Enterprise (Taiwan) ••• 000 New line started operating in 2009 Tianjin Angang ••• 000 New line started operating in 2010 Weike Dope Chemical ••• 000 First stage of project initiated in 2011 Baosteel Huangshi Coating Sheet n/a Commissioned a new special colour coating sheet facility in 2011 The development and growth of the domestic industry presents significant opportunities. In addition to new capacity introduced over the last few years, Panhua Group (Jiangsu Province) has also announced the commissioning of a new colour coated steel sheet production line in Chongqing, whilst Tianyuan Manganese Industry is intending its own colour coated stainless steel plate production programme. Although the short-term capacity introductions are not clear, these projects have the potential to add over one million tonnes of capacity. Coating use by substrate is around 80% for pre-coated steel and the remaining 20% for pre-coated aluminium. Building and construction is the largest category of coil coating demand in China, for both exterior and interior applications. The building industry accounts for between 80% and 90% consumption of pre-coated sheet. The same share applies for both the steel and aluminium coaters, although the end applications differ. The main usage for pre-coated aluminium sheet is interior applications, such as suspended ceilings and composite or sandwich panels used in high rise buildings. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 14-40 Construction and Infrastructure Selected Coil Coatings Suppliers: EMEA Pre-coated Metal Sheet Suppliers Europe, Middle East and Africa AkzoNobel has consolidated its leading position within the EMEA region through its acquisition of Schramm Coatings in Germany. The acquisition was part of a deal with SSCP of Korea. BASF sold its coil and extrusion coatings businesses in North America to PPG, but it is still a leading player in the coil coating market in the EMEA region with production facilities in Germany, the UK, Russia and South Africa. ► AkzoNobel (Netherlands) ► BASF (Germany) ► Becker Industrial Coatings (Sweden) ► Holland Coatings Industries (Netherlands) ► ISVA Vernici (Italy) ► Salchi Metalcoat (Italy) ► Siquam (Italy) In terms of Pre-coated Metal Sheet coatings suppliers judged by headquarters reporting group revenues within the European and MEA region, the main players based on estimated coil coating source revenues are: ► Walter Mäder (Switzerland) 1. AkzoNobel 2. Becker Industrial Coatings 3. BASF. Selected Coil Coatings Suppliers: Americas Valspar acquired of the Teknos Nova Coat business in Finland during 2007, which had earlier acquired the coil coatings business of Tikkurila. This gave Valspar a strong position in the European market for the first time. Finland is seen as a strategic location as it offers opportunities to serve the expanding Eastern European markets. The Americas ► Dura Coat (United States) ► Kel Coatings (Canada) ► PPG (United States) ► The Magni Group (United States) ► TecCoat (United States) In terms of Pre-coated Metal Sheet coatings suppliers judged by headquarters reporting group revenues within the Americas region, the main players based on estimated coil coating source revenues are: ► Titan Coatings (United States) 1. Valspar ► Valspar (United States) 2. PPG 3. Dura Coat. The North American coil coating market has also seen consolidation over the last five years resulting in an expansion of market share for PPG and Becker Industrial Coatings. The top five suppliers to this region now have over 80% share of the market. The same suppliers have also established production or distribution operations in South America. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 14-54 Scope and Samples Metal Packaging Coatings Chapter Contents 15. Packaging & General Industrial — Metal Packaging Coatings 1 Executive Summary 4 2 Introduction 4.1 Global Market Drivers and Trends A Demographic Trends B Packaging Trends C Industry Trends 2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn 3 Technology 3.1 Current Technology A Beverage Cans B Food Cans C Other Types of Metal Packaging for Food D Non-Food Applications 3.2 Technology Systems A Coatings for Beverage Cans B Coatings for Food Cans C Resin Systems Used for Food and Drink Applications 3.3 New Developments and Standards A New developments B Standards Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Markets 4.2 Global Market Size and Growth A Coatings Demand in Europe, Middle East and Africa B Coatings Demand in Asia Pacific C Coatings Demand in the Americas 5 Suppliers 5.1 Suppliers Global Position 6 Outlook 6.1 Forecast Commentary 6.2 Forecast Data 7 Glossary 8 Terms and Conditions Page 0-58 Packaging & General Industrial Metal Packaging Coatings Metal Packaging Coatings Technology by Share: World 3.2 Technology Systems Technology Coating systems used in food applications need to comply with the regulations for direct food contact. They must also fulfil the performance standards required depending on the type of food or beverage intended to be packages. These may include: Stain resistance: For example, when packing tomatoes and other red fruits Sulphur resistance: For example, when packing meat and fish products Acid resistance: For example, when packing fruits or a variety of other pickled foodstuff. In addition, the coatings used for processed foods need to withstand the high temperatures and pressures associated with the sterilisation process for these products. Technology Shares by Resin Chemistry in Metal Packaging: World Over the last ten years, there have been no significant changes made to the coatings technology and chemistry for food and beverage can applications, although there is a trend towards higher solids solventborne systems, waterborne systems and, to a lesser extent, UV overprint varnishes for reduced VOC. However, the waterborne share in food cans is still less than 10% and is mainly used for interiors and exteriors of two-piece aluminium food cans. The inks for the decoration of can exteriors are predominantly solventborne alkyds and polyesters, although the use of waterborne and UV technology is increasing. The switch from solventborne inks to UV curing systems is always linked to investments in new coating lines or refurbishment of existing lines. Solventborne systems are the most important technology used for metal packaging, representing almost 60% of coatings consumed. Epoxy based resins are the most important systems used in can coatings with an estimated share of almost 50% of the total can coatings market. Note: The epoxy segment includes epoxy-acrylic, epoxyphenolic and epoxy-ester. ‘Others’ includes alkyds and urethane modifications. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 15-16 Packaging & General Industrial Metal Packaging Coatings Markets Food Production and Prices World Food Prices Index (2002–04 = 100) Farming is a cyclical industry but a combination of factors has resulted in dramatic variances in recent years leading to volatility in both farm input and output prices. The markets for grain, for example, experienced poor global harvests in 2007 leading to low stocks, which in turn pushed up prices. The 2008 global harvest was much better and so prices fell accordingly. In 2006, prices of the world’s most popular food staples including wheat, corn, soya and rice began rising. In 2007 and 2008 world food prices experienced a dramatic increase, especially cereals, oils and dairy products. The United Nation’s Food and Agriculture Organisation (FAO) reported a 56% increase in the world food price index from 2006 to 2008. The factors that contribute to price volatility include: Droughts, which negatively affected grain producing nations Falling world food stockpiles and grain reserves Rising oil prices Increased planting of crops for bio fuels Changing diet and strong rise of per capita meat consumption in developing countries. The sensitivity of market values is higher when stocks are low and is exaggerated by speculative elements. In 2008 the prospect of commodity super-cycles encouraged trading until the recession reduced trading demand for many products. Source: FAO World Food Prices Index (2002–04 = 100) 2006 2007 2008 2009 2010 2011(E) Meat 118.5 125.1 153.2 132.9 152.0 167.9 Dairy 128.0 212.4 219.6 141.6 200.4 225.6 Cereals 121.5 166.8 237.9 173.7 182.6 249.3 Oils 112.0 169.1 225.4 150.0 193.0 278.5 Sugar 209.6 143.0 181.6 257.3 302.0 419.2 Food Price Index 126.5 158.6 199.6 156.8 185.1 233.4 Source: United Nation’s Food and Agriculture Organisation (FAO) Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 15-34 Packaging & General Industrial Metal Packaging Coatings B Metal Packaging Coatings Demand by Segment: Asia Pacific 000 tonne Markets Coatings Demand in Asia Pacific Following 4.7% CAGR over the period 2006 to 2009, the market for Metal Packaging Coatings in Asia Pacific reached an estimated demand of •••,000 tonnes (••• million litres) with an associated value of approximately €••• million. The most important segment within the region is beverage cans, which accounted for 46% of estimated coatings consumption for metal packaging. It is also one of the fastest growing sources of demand, exhibiting a 4.6% CAGR over the 2006 to 2009 period, to reach over •••,000 tonnes (•• million litres). Growth is driven primarily by rising affluence, living standards and number of middle to high-income earners in the developing markets of China and India. The markets of Australia, Japan and Korea are relatively mature with only moderate growth profiles. Beverage can producers in Asia Pacific have traditionally favoured steel three-piece cans. However, the use of aluminium is growing and now represents around 55% of material consumption. At the same time, steel cans are shifting towards two-piece cans, which are better suited to the growing volumes of beers and carbonated soft drinks. Metal Packaging Coatings Demand in Asia Pacific by Segment (2005 – 2009) 2005 2006 2007 2008 2009 Beverage Cans •• ••• •• ••• •• ••• •• ••• ••• ••• Food Cans •• ••• •• ••• •• ••• •• ••• •• ••• • ••• • ••• • ••• • ••• • ••• Drums •• ••• •• ••• •• ••• •• ••• • ••• Caps, Crowns and Closures •• ••• •• ••• •• ••• •• ••• •• ••• General Line •• ••• •• ••• •• ••• •• ••• •• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• 4.7 5.0 4.3 4.9 (tonne) Aerosols The market in Asia Pacific is estimated to be almost •••,000 tonnes Total % Change The best performing market segment over the period 2006 to 2009 was caps, crowns and closures, which exhibited 8.6% CAGR to reach over ••,000 tonnes (•• million litres). This is also one of the largest single segments of demand within the region, accounting for approximately 16% of estimated consumption. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 15-52 Scope and Samples General Industrial Coatings Chapter Contents 16. Packaging & General Industrial — General Industrial Coatings 1 Executive Summary 4 2 Introduction 2.2 Macro Drivers 4.1 Global Market Drivers and Trends A Economic Trends B Consumer Activity C Industrial Activity 2.3 Impact of Economic Downturn 4.2 Global Market Size and Growth 3 4.3 Aluminium Extrusions A Segment Definition B Market Drivers C Market Dynamics, Size and Growth 2.1 Market Definition Technology 3.1 Current Technology 3.2 Technology Systems A Waterborne and Solventborne B Powder Coatings C Electrocoat 3.3 Coatings Technology by Application A Aluminium Extrusions B Metal Furniture, Fixtures and Fittings C Automotive Components D Specialist Machinery Markets E Appliances F Heating, Ventilation and Air Conditioning G Other Consumer Products H Job or Trade Coaters 3.4 General Technology Trends Markets 4.4 Metal Furniture, Fixtures and Fittings A Segment Definition B Market Drivers C Market Dynamics, Size and Growth 4.5 Automotive Components A Segment Definition B Market Drivers C Market Dynamics, Size and Growth 4.6 Specialist Machinery A Segment Definition B Market Drivers C Market Dynamics, Size and Growth 4.8 Heating, Ventilation and Air Conditioning A Segment Definition B Market Drivers C Market Dynamics, Size and Growth 4.9 Bicycles A Segment Definition B Market Drivers C Market Dynamics, Size and Growth 4.10 Market Segmentation: Other Consumer Products 5 Suppliers 5.1 Suppliers Global Position A Europe, Middle East and Africa B The Americas C Asia Pacific D Job or Trade Coaters 6 Outlook 6.1 Forecast Commentary 6.2 Forecast Data 7 Glossary 8 Terms and Conditions 4.7 Domestic Appliances A Segment Definition B Market Drivers C Market Dynamics, Size and Growth Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-62 Packaging & General Industrial General Industrial Coatings B Applications for Powder Coatings Technology Powder Coatings Thermoset powder coating is a major global technology for the industrial coating of a wide variety of components. Approximately 90% of powder coatings are used within the General Industrial metal coating sector, with the remaining 10% being used in sectors such as Protective, ACE, Motorcycles, Auto OEM and Industrial Wood (all these markets are covered in separate chapters). Powder coatings used for General Industrial metal applications represent around 30% of the total coating demand. The main end applications for powder coatings in the General Industrial metal sector are: Metal Furniture and Fixtures Appliances Automotive Components. The principal resin systems used are: Polyester Comparative Properties of Polyester Exterior Grades Polyester powder coatings are the most common and versatile chemistry used in powder coatings. They can be formulated for indoor or outdoor applications. Hybrid: carboxy functional polyester cross-linked with 30–50% epoxy. Used for indoor applications such as appliances, metal furniture etc. Polyester, exterior grades: carboxy functional resins cross linked with a hardener such as TGIC (triglycidyl isocyanurate ) or HAA (ß-hydroxyalkylamides) for powders with good exterior durability. TGIC is used in most regions except Europe where the requirement to label the boxes of powder as being toxic has led to HAA being the main hardener used in this region. Hardeners based on terephthalic acid diglycidyl ester with trimellitic acid triglycidyl ester (Araldites PT910 & 912) are also used in Europe. The hardeners are less reactive than either TGIC or HAA and are mainly used in powder coatings for special applications, such as anti-gassing coatings for galvanised steel. The comparative properties of the three systems are summarised in the figure (left). Polyester, Super-durable: Standard exterior polyester powder coatings, when tested for two years exposure in Florida, lose 50% of their gloss and thereby fail to meet the higher American standard of architectural specifications, which requires five years’ exposure in Florida for AAMA 2604 and 10 years for AAMA 2605. The development by the powder coating industry of super durable coatings has resulted in polyester powder coatings that meet the 5 year Florida exposure test for AAMA 2604. The super durable Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 16-14 Packaging & General Industrial Shares of Global Appliance Coatings Demand by Region 2009 General Industrial Coatings C Markets Market Dynamics, Size and Growth The market is characterised by the presence of a few multinational conglomerates with extensive product ranges. The correlation between the sales of appliances and macro-economic trends resulted in contractions in market demand in 2008 and 2009. Production output is estimated to be over 480 million units in 2010, reflecting signs of recovery and slight growth on the previous year, when output was around 475 million units. Europe and the US are the main manufacturing locations for appliances, but there has been a shift towards relocating manufacturing operations to Asia Pacific, which has contributed to stronger coatings consumption in that region. Coatings demand associated with the production of appliances generated a total demand of around •• million litres (••,000 tonnes) in 2009. After strong growth in 2006 the market slowed in 2007 and declined in 2008 as a result of the recession. Continued growth in Asia Pacific resulted in overall growth of 0.6% in 2009. Industrial Coatings Demand for Appliances by Region 2005-2009 (000 litres) 2005 2006 2007 2008 2009 Europe & MEA •• ••• •• ••• •• ••• •• ••• •• ••• Americas •• ••• •• ••• •• ••• •• ••• •• ••• Asia Pacific •• ••• •• ••• •• ••• •• ••• •• ••• Total •• ••• •• ••• •• ••• •• ••• •• ••• •.• •.• •.• •.• % Change Companies in the United States and Europe are expected to remain the leaders ... but production is expected to continue shifting towards Asia Pacific Manufacturing companies in the United States and Europe are expected to remain the leaders due to their technical expertise but production is expected to continue shifting towards Asia Pacific. This has traditionally been due to lower labour costs; the relative advantages are likely to be reduced as China labour rates increase, but there are still advantages to having local manufacturing in order to increase market penetration into the potentially large markets within Asia Pacific. Leading suppliers of household appliances to Asian markets (Daewoo, Matsushita, Samsung and LG Group) are already facing increasing competition from western producers aggressively targeting the region by establishing subsidiaries, forming joint ventures, and acquiring or merging with local companies. This should result in a reduction in imports for appliances into the key Asia Pacific markets but drive further demand for coatings. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 16-85 Packaging & General Industrial General Industrial Coatings Outlook 6.2 Forecast Data Forecast Coatings Demand By Region Forecast General Industrial Coatings Demand 2010-2020 (000 litres) (million tonnes) 2010 2011 2012 2013 2014 2015 2020 Aluminium Extrusions ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Metal Furniture ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Auto Components ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Specialist Machinery ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Domestic Appliances ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• HVAC ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Bicycles ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Other ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Total • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• Forecast General Industrial Coatings Demand by Region 2010-2020 (000 litres) 2010 2011 2012 2013 2014 2015 2020 Europe & MEA ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Americas ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Asia Pacific • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• Forecast General Industrial Coatings Demand by Technology 2010-2020 (000 litres) 2010 2011 2012 2013 2014 2015 2020 Powder ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Solventborne ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Waterborne ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• • ••• ••• Electrocoat ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 ••• ••• Page 16-116 Scope and Samples Coatings for Plastics Chapter Contents 17. Packaging & General Industrial — Coatings for Plastics 1 Executive Summary 4 2 Introduction 5.1 Suppliers Global Position 2.2 Macro Drivers 4.1 Global Market Drivers and Trends A Economic Trends B Consumer Activity C Industrial Activity 2.3 Impact of Economic Downturn 4.2 Global Market Size and Growth 6.2 Forecast Data 2.1 Market Definition 3 Technology 3.1 Current Technology 3.2 Technology Systems A Solventborne and Waterborne Liquid Coatings B UV Coatings C In-Mould Coating 3.3 Coatings Technology by Application A Automotive OEM B Trucks and Buses C Motorcycles D Passenger Rail Interiors E Aircraft Interiors F Consumer Electronics G PVC Flooring H Others 3.4 New Developments and Standards A New developments B Standards Markets 5 6 Suppliers Outlook 6.1 Forecast Commentary 7 4.3 Transportation A Market Definition B Market Drivers C Market Dynamics, Size and Growth Glossary 8 Terms and Conditions 4.4 Consumer Electronics A Market Definition B Market Drivers C Market Dynamics, Size and Growth 4.5 PVC Flooring A Market Definition B Market Drivers C Market Dynamics, Size and Growth 4.6 Other Coatings for Plastics Markets A Market Definition B Market Drivers C Market Dynamics, Size and Growth Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-66 Packaging and General Industrial Coatings for Plastics C In-mould Spray Skin Coating Process for Polyurethane Technology In-Mould Coating In-Mould Coating (IMC) is the application of paint to a plastic component as an integral part of the moulding process, resulting in a fully finished part straight from the mould. The two main types of plastic substrates that are coated with this technique are polyurethane-based RIM compounds (reaction injection moulding) and SMC (sheet moulded compound, based on glass fibre reinforced unsaturated polyester). A typical IMC process consists of the following stages: 1. The mould is preheated to 70°C or higher, depending on plastic type. 2. The inside of the mould is coated with a release agent followed by flash off. 3. The coating is applied, usually by spray, at 20 – 30 microns to the top and bottom of the tool, followed by flash off. 4. The plastic compound is injected. 5. The tool is closed for a set time, depending on the compound, until the plastic compound and the coating are fully reacted. 6. The painted part is removed, trimmed and packaged for shipment to assembly plant. Alternatively, the part can be moulded first, the tool opened and the liquid coating injected between the inner mould side and the part. The tool is then closed again. IMC offers the following advantages: Reduced production costs; by eliminating preparation stages such as cleaning and degreasing, priming and sanding Reduced processing times; typically three to five minutes compared to 40 to 60 minutes for post-painting Wide range of gloss and texture effects; through the design of the mould inner surface Lower material costs Less capital intensive equipment requirements. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 17-11 Packaging and General Industrial Coatings for Plastics Consumer Electronics Coatings for Plastics: World The importance of brand and perception of product value results in a significant investment in product promotion based on functionality and design. The role of coatings in high-end products is important and can be used as a further differentiator in a competitive market. Manufacturers of premium consumer electronics, such as Apple and Sony, focus on differentiating their products based on quality and are reluctant to reduce prices to gain market share in emerging markets. This will help to ensure some continued demand for coatings. million litre Markets The equipment used within this market typically has a short product lifecycle, which is generally between six months and two years. The coatings and the processes used in their application are less demanding than those of Transportation. Global Consumer Electronics Coatings for Plastics Demand by Category and Segment (2005 – 2009) 000 litre 2005 2006 2007 2008 2009 •• ••• •• ••• •• ••• •• ••• •• ••• Televisions •• ••• •• ••• •• ••• •• ••• • ••• Audio/Video • ••• • ••• • ••• •• ••• • ••• Others • ••• • ••• • ••• • ••• • ••• •• ••• •• ••• •• ••• •• ••• •• ••• •• ••• •• ••• •• ••• •• ••• •• ••• • ••• • ••• • ••• • ••• • ••• Portable Electronics •• ••• •• ••• •• ••• •• ••• •• ••• Mobile Phones •• ••• •• ••• •• ••• •• ••• •• ••• • ••• • ••• • ••• • ••• • ••• •• ••• •• ••• •• ••• •• ••• •• ••• 5.8 8.6 4.1 -12.2 Home Entertainment Computers and Gaming PC and Console Peripherals Others Total % Change The home entertainment category has exhibited a declining share in estimated Coatings for Plastics consumption, falling from almost 45% in 2005 to just over 30% in 2009. This category generated an estimated demand of almost •• million litres (••,000 tonnes) in 2009 with a value of approximately €•••million. This decline can be attributed to changes in product design within the television segment and improvements to moulding technologies, resulting in considerable reductions in the surface areas that require coating. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 17-59
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