SAO PAULO – Research and consulting firm Frost & Sullivan has released a new report on the decorative segment in the Brazilian paint and coatings market. According to the study, the Brazilian decorative paint and coatings market was worth $2,077.3 million in 2010. With a compound annual growth rate of 5.8 percent, this is likely to increase to $3,262.6 million by 2017. Almost 100 percent of local consumption is produced locally, while exports contribute to approximately five percent of the total revenues and are concentrated on big multinational companies.

The segment represents 63.8 percent in terms of revenue of the total paint and coatings market in 2010. The industrial segment held the second-largest position, with 21.4 percent, followed by the refinish and automotive sectors, with 14.8 percent combined. In 2009, the decorative segment was the least effected by the economic crisis, with a revenue loss of 2.4 percent, whereas the total market lost five percent.

In decorative paint and coatings segment, the top-five participants represent about 80 percent of the market, and the 10 biggest players represent 90 percent of the market. The market is primarily driven by the construction and the do-it-yourself industries.

An insufficient supply of local raw materials, which meet approximately 40 percent of the total industry's needs, is a major market restraint. Investments in this field may raise revenues, profit and margin. In Brazil, the per capita consumption of paint is about five liters; it is 15 liters per capita in the United States and more than 20 liters per capita in other developed countries. This low paint consumption is a challenge to market participants, as paint is not regarded as a necessary good.

For additional information about this study, e-mail Tatiana Brull, at tatiana.brull@frost.com.