Given the proximity to the U.S. market it is not uncommon to assume that the Canadian and U.S. markets operate in unison, but this would be erroneous. The Canadian market offers unique opportunities and challenges even though it is heavily influenced by a market approximately 10 times its size. The Canadian pigment market is approximately 217,000 million kilograms. Table 1 provides a breakdown of the Canadian pigment market. Forecast growth is approximately 2-3% for 2003 and is tied to GDP. It is also linked to growth in the coatings, ink, plastics, construction and paper industries.
Additionally, globalization has resulted in consolidation and nationalization. A Canadian aspect of globalization and consolidation is that most Canadian companies with foreign head offices have the head office dictate the pigments. Globalization has also led to the nationalization of production for pigment-consuming industries. A recent example is Flint Ink consolidating its North American ink operations into the U.S. This substantially diminished ink production in Canada. Transfer of pigment technology to Asian and Indian sources by leading pigment producers, mostly in Europe, has led to increased competition from lower-quality and low environmentally committed countries. This has placed producers of pigments in North America at a competitive disadvantage.