While the finishing world expanded globally in 2007, mainly due to spectacular growth in the developing BRIC nations (Brazil, Russia, India and China), the number of major players kept shrinking following a very active period of acquisitions. Technology advanced sometimes dramatically, but most often incrementally, following years of exhaustive research and refinement. Across the globe, finishers continue to grapple with recently enacted exposure and environmental regulations such as the European Union’s Restriction of Hazardous Substances (RoHS) and Waste Electric and Electronic Equipment (WEEE) directives, and the U.S. Occupational Safety and Health Administration’s (OSHA) hexavalent chromium reduction standard. The biggest impact was felt in the plating world.
Following is a summary of recent global developments that have affected the finishing industry.
Mergers and AcquisitionsNearly all of the major global players in the coatings industry made major acquisitions and formed strategic alliances with foreign partners. Early in 2007, Akzo Nobel, the world’s largest coatings producer, shed its pharmaceutical division and acquired the North American wood coatings manufacturer Chemcraft. Later in the year, the Dutch coatings powerhouse shook the finishing industry by making a successful bid to secure ICI for about $16 billion. ICI’s core business revolves around architectural and packaging coating technologies. This purchase will thrust Akzo into the position of undisputed coatings leader in sales and global coverage.
The second largest paint maker in the world, PPG, sold its automotive glass and fine chemicals businesses this year and concentrated on expanding its coating technology portfolio by acquiring the Dutch coatings technology house, SigmaKalon Group, for a purported $3 billion. SigmaKalon’s strong European architectural business complements PPG’s industrial and automotive market participation. PPG also gained a significant presence in Latin American by acquiring the Brazilian architectural and industrial coatings supplier, Renner Sayerlack. Besides Brazil, this company has operations in Chile and Uruguay. The acquisition of the Australian Barloworld Coatings further expanded PPG’s global coverage of architectural coatings. The company also picked up Champion Coatings (marine) and ICI’s auto refinish business in India.
DuPont Performance Coatings has fueled its growth mainly through joint ventures this year. DuPont Russian Coatings LLC was formed with Russkie Kraski Corp. and will serve the automotive coatings market in Russia, Belarus and the Ukraine. DuPont also opened a new facility in Shanghai - the company’s 10th Chinese coatings operation
The Cleveland-based coatings behemoth Sherwin-Williams acquired paint companies both at home and abroad. Early in the year, Sherwin-Williams made its first foray into the Indian market by buying Nitco, a small coatings technology house serving the architectural market. In September, the company purchased Columbia Paint & Coatings Co., headquartered in Spokane, WA.
RPM continued supporting its growth strategy by adding the British concerns Watco, a maintenance coatings supplier, and Tor, a specialty coatings producer, to its Rust-Oleum group. RPM’s Carboline business acquired an intumescent coatings company, Nu-Chem, and a marine coatings supplier, Finnaren & Haley.
Valspar expanded its powder coating market reach in North America when it completed its purchase of H.B. Fuller’s powder division. The company also picked up the Helsinki-headquartered Teknos Nova Coil TNC Oy, a high-quality producer of coil coating technology for the architectural market.
The plating chemicals giant Atotech continued to expand its global presence with the acquisitions of the German based KUNZ GmbH and the electroplating and zinc flake operations of SIDASA based in Barcelona.
A few mega-deals were made in the coatings raw materials arena. The biggest is the pending $10.4 billion bid from Columbus-based Hexion to acquire Huntsman. This transaction reduces the global suppliers of epoxy resins, which are a key component in many functional coatings.
Technology AdvancesA number of fascinating innovations in the finishing industry have emerged in the last year. Some involve novel resin technology, whereas others involve advances in pretreatment and plating processes.
Dow Corning has developed a novel fluoro-silicone resin technology that offers the advantage of silicone's low-temperature film forming with the durability and performance of fluoropolymer technology.
In the area of pretreatment, strides have been made to reduce sludge with the development of non-phosphorus chemistries. Coral Chemical, Chemetall Oakite, Nalco and Henkel all have created alternatives to conventional iron and zinc phosphate technologies.
Plasmatreat has developed out-of-the-box technology to clean and pretreat both plastic and metallic substrates. This novel approach was recently commercialized and employs plasma energy to clean and activate the surface to promote adhesion.
Ferro Corp has developed a stainless steel look-alike ceramic finish that outperforms stainless for color stability and fingerprint resistance.
A joint development program between Nippon Paint and Nissan Motors has yielded a self-repairable automotive clearcoat. Through this formulation’s unique polymer science, scratches actually repair themselves within a couple days.
Greenkote, PLC, an Israeli-based technology leader has developed a diffusion coating that offers an environmentally safe improvement in corrosion resistance versus traditional zinc chromate or blackening processes.
Additionally, MacDermid has perfected a more efficient technique for copper plating by employing a periodic pulse mechanism.
A Smaller WorldOverall the finishing industry has experienced growth, mainly from the economic expansion in Asia that has been fueled by buoyant construction and industrial markets. South America, in particular Brazil, has seen increased activity in their automotive sector that has driven volume advances in the coatings market. Similarly, the Russian coatings market matches the growth of their automotive sector being fueled by mostly foreign investment.
The world continues to get smaller as multinational paint companies expand their presence across all geographic and end-use markets. Expect these trends to continue as the world economy stabilizes and the developing nations establish their economic and industrial infrastructures.