SINGAPORE - A new analysis from Frost & Sullivan,Strategic Analysis of the Asian Paints and Coatings Market, reports that the Asian paint and coatings market is poised to grow with buoyant economic conditions and growth in end-user markets. The report states that the market earned revenues of $26.1 billion in 2006 and is estimated to reach $29.15 billion in 2008.
Since most of the end-user industries of paints contribute significantly toward a country’s economic growth, macroeconomic variations have a significant impact on the paint industry. Rising disposable incomes, improving consumer awareness and globalization of end-user industries, such as automotive and electronics, have led to a healthy growth in the paint industry.
However, market growth cannot be sustained without resolving certain major industry challenges. Since regulatory standards in Asia are lax, coatings manufacturers and their customers continue to use the conventional systems, as a shift to eco-friendly coatings would require considerable investment. Rising raw material costs have also led to a decline in R&D investments as coatings manufacturers face a margin crunch. Further, the presence of numerous unqualified coatings suppliers has increased price pressure.
The shift to eco-friendly coatings is expected to happen at a slow and gradual pace. Manufacturers have to leverage the growing consumer awareness to promote quality products that yield higher margins. Early-mover advantage in a developing market is a crucial success factor, and coatings manufacturers have to drive the shift to eco-friendly coatings.
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