06 August 2008 16:47 [Source: ICIS news]By Nigel Davis
LONDON (ICIS news)--The world’s leading paints and coatings makers have given some idea in this latest reporting season of the extent of the current economic downturn if not its depth.
That is likely to become clearer towards the end of the year if the industrial slowdown becomes more pronounced in Europe and we have a better idea of 2008 industrial growth in ?xml:namespace>
Coatings producers are tied closely to a number of important industrial sectors – from automobiles and construction to shipbuilding and packaging; and paint makers to the professional as well as domestic consumer. The handle they have on demand growth across different sectors and economies is extensive.
Number three global coatings producer Sherwin-Williams tells it like it is for the
The downturn has severely depressed paint demand in the domestic new residential, residential repaint, DIY (do it yourself) and commercial markets, Connor says. The company’s Consumer Group faces the same market softness and has had to cope with a rapid raw material cost increases.
Sherwin Williams is exposed particularly in the housing market but all firms selling into the
Of real worry perhaps amid the bunch of second quarter and first half numbers, and, it has to be said, still fairly robust full-year forecasts, is the reflection of the wider industrial downturn in the
PPG talked of “significant declines” in its sales into the
The “headwinds” in industrial coatings were felt mainly in the automotive and OEM markets in
It is the continuation of the downward trend that is of most concern – and the fact that the media are talking openly about possible bankruptcies among the big three auto makers.
Companies like PPG and others in the global coatings top five, which includes the coatings businesses of DuPont and BASF, can militate against the impact of the
The flurry of large-scale coatings merger and acquisition (M&A) activity last year illustrates one way in which they are trying to gain a broader regional as well as product footprint.
Coatings sector leader Akzo Nobel will ultimately benefit from the former ICI decorative paints business and the inroads it gives into fast growing local paints markets in Asia (primarily China) and Latin America (primarily Brazil). PPG expects to make gains following its purchase of Europe-based coatings maker Sigma Kalon.
Akzo Nobel acknowledges that the
Akzo Nobel’s decorative paints sales were down 14% in the
Last week, Akzo Nobel said that the weak economic conditions in the
The Asia component of that business had also felt the impact of the
A powder coatings slowdown in Europe was more visible, the Netherlands-based coating producer said, but was being countered by demand from
That performance reflects a decline in the beverage can market but shows that coatings producers are facing slowing if not declining market growth in a number of important segments. As increasing pressures are felt in developed world economies so the focus has to be on emerging geographies.
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