Paints demand recovery remains elusive - US Sherwin-Williams

20 October 2009 20:43  [Source: ICIS news]

HOUSTON (ICIS news)--Overall US sales in paints and coatings will likely decline for the rest of the year, despite signs that demand from existing housing has improved, major US producer Sherwin-Williams said on Tuesday.

“It’s obvious from third-quarter sales results that many of our end markets are not yet participating in the rumoured economic recovery,” CEO Christopher Connor said during an earnings conference call.

“We keep looking for signs that recovery in paints and coatings is underway,” he said, adding that “significant” challenges in commercial and residential real estate markets persist.

Sherwin-Williams’s third-quarter net sales were down by 12% from the same year-ago period. However, its earnings performance was better than expected due partly to a stock repurchase programme during the period, spending control and lower year-over-year costs for raw materials, freight and distribution, the company said.

The company’s paint store sales were down from a year ago largely due to weak commercial and residential architectural coatings demand. Although sales in the do-it-yourself (DIY) sector this year had been improving sequentially, Connor said, September sales flattened.

Year-over-year sales in the company’s consumer group fell by 7.1%. Sales in its global finishes group fell by 11.3%.

Connor said headwinds include the current glut of foreclosures, a lack of new industrial and residential construction and, to a much lesser degree, currency exchanges and pricing.

On the raw-material front, Connor said that despite some “dramatic announcements, particularly from titanium dioxide [TiO2] producers … pricing has been pretty stable” and would likely remain so through the end of the year.

“There is a possibility, of course, that raw materials might be up next year,” he said. “First, we’d see how much of those costs we could offset, and then we’d have to go to the market.

“We did not raise prices at the beginning of 2009,” Connor added, “and to date, we’ve made no commitments regarding prices in 2010.”

Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy
For more on Sherwin-Williams visit ICIS chemical intelligence
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By: Larry Terry
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