Many manufacturers of rheology modifiers experienced moderate growth in 2004 and expect this encouraging trend to continue for the next few years. This growth was largely due to the reasonably good performance of certain key paint and coatings segments such as architectural and waterborne industrial coatings, which account for a bulk of the demand for rheology modifiers.
However, the recent European Union (EU) directive on volatile organic compounds (VOCs) could become an obstacle for these manufacturers. The EU introduced this directive (2004/42/CE) with the specific aim of reducing emissions of VOCs resulting from the use of organic solvents in certain paints, varnishes and vehicle-refinishing products.
Following this legislation, coatings companies are more or less compelled to reduce solvent emissions by improving efficiency in using them or by substituting products that contain less or no solvent. This has increased the market for waterborne, high-solids and solvent-free paints, and affected the demand for solventborne paints in all sectors, says Frost & Sullivan Research Analyst Vinayak Rao. The growth in waterborne paints acts as a driver for types of rheology modifiers such as cellulosics and synthetics, which are widely used in waterborne formulations.
In 2004, the economy of the expanded EU improved by around 2.3 percent, while total construction activity in Central and Eastern Europe rose by 7.4 percent, a substantial improvement over the negative figures of 2002. These trends are bound to drive increased demand for paints and coatings and, consequently, for rheology modifiers.
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