LONDON - IRL has published a new edition of its title, A Profile of the Eastern European Paint Industry. The report provides overviews and forecasts for 10 national coatings markets across the continent from Eastern Europe to the countries of the Black Sea region, namely Armenia, Belarus, Estonia, Georgia, Latvia, Lithuania, Moldova, Russia, Turkey and the Ukraine. It focuses on and provides market insight into nine mainstream coating sectors.
Coatings demand across these countries has increased to 2.7 million metric tons, and with average market growth of 5.8 percent per annum, this can be expected to reach more than 3.6 million metric tons by the end of 2016. Very simple drivers underpin growth in coatings demand across the region, including: growth in construction markets, growth in infrastructure investment, rising salaries and greater disposable incomes, and growing industrial output.
Architectural coatings account for the largest market segment in the region, with 1,599,100 metric tons consumed in 2011. The second-largest market segment is general industrial coatings with 461,000 metric tons, followed by wood coatings (205,250 metric tons) and protective coatings (169,400 metric tons).
The regional market is now dominated by two economies, Russia and Turkey, which together represent about 2.3 million metric tons of coatings consumption for 2011. This translates into per capita coatings use of 10.3 kg/head in Russia (population almost 143 million) and a similar per capita coatings consumption of 10.2 kg/head in Turkey (population 78.8 million).
Turkey is enjoying the highest market growth rate. Key contributors to the future success of the Turkish market are: growth in construction, maintenance and refurbishment projects carried out in the country; the strong position of the local powder coatings industry; growth in end-use industries such as automotive, electronics and home appliances; and expected growing demand for waterborne and low-VOC paints due to the accession of the TSE (Turkish standards body) into the CEN.
Russia shows average growth in the architectural coatings market. Growing interest of customers in health, safety and environmental matters is one of the key drivers behind the growing popularity of low-VOC and water-based paints. However, the low quality/economy architectural paint segment still holds the largest market share. Industrial coatings are poised for higher-than-average growth over the forecast period, with the highest growth expected in the sectors of marine paints and coatings for bridges and tunnels. One of the key midterm marketing opportunities for the Russian coatings market will be the hosting of the Winter Olympic Games by the Russian city of Sochi in 2014.
Other sizeable markets include the Ukraine and Belarus. Demand for coatings in the Ukrainian is placed at about 230,000 metric tons, and the Belarusian coatings demand is around half of that.
In some countries in Eastern Europe, architectural coatings have taken on such significance that there are circumstances when industrial coatings are neglected. As a result, some orders for industrial coatings are being filled by exports from multinational companies in the west and are often sustained through importers and distributors.
In the overall Eastern European market, the best opportunities for the marketing of industrial coatings have been identified in the areas of powder, marine and automotive OEM coatings.
A Profile of the Eastern European Paint Industryis available now from IRL. For more information, contact Cathy Galbraith at cgalbraith@brggroup.com.
