New US Dow coating segment sees no growth until late 2010

29 May 2009 22:30  [Source: ICIS news]

NEW YORK (ICIS news)--The new Dow Coating Materials (DCM) business is unlikely to see sales growth until the second half of 2010, company executives said on Friday.

“We are still seeing negative comparisons for the rest of the year," said Luis Fernandez, vice president of DCM, during a conference call. “I don’t think we will see growth on a year-to-year basis in general for this year and probably not for the first half of next year.”

There is no question that the industry is still seeing a downturn in terms of the downstream consumption of both industrial and architectural coatings, he added.

DCM is the combination of Dow Chemical’s coatings segment and the coatings business of US-based specialty chemical firm Rohm and Haas, which Dow acquired on 1 April.

DCM’s business models are predicting the recovery of the broader architectural coatings market in the second or third quarter of 2010, Fernandez said.

While DCM does not expect year-on-year sales improvement until 2010, it has seen sequential improvement in every month since February, Fernandez said.

“We are seeing growth [return to] Asia, as well as in other rapidly developing economies," he added.

Before the downturn, the coatings industry was growing slightly above national GDP rates, he said.

Fernandez noted that before it was acquired by Dow, Rohm and Haas' intention was for its coatings business to grow 2-3 percentage points faster than the industry.

“I would expect DCM would have objectives that are similar, he said.

DCM has about $3.5bn (€2.5bn) in sales - roughly 6% of Dow’s total revenue. The global coatings market is valued between $45bn-50bn, the company said.

($1 = €0.72)

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