Change Is In the Air
With the recent presidential election and a transition in progress, the entire world can’t help but feel unsettled about what to expect in the coming years. It seems likely that there will be a focus on reshoring efforts, deregulation and overhauling trade deals, and that the environment will take a back seat. What will all of this change mean to the coatings industry?
We continue to see advancements in technology and increased efforts to manufacture coatings that have the lowest possible impact on the environment (from cradle to grave) while delivering new and improved functionality. While much of this work is regulatory-driven, it appears that most companies have jumped on board the “sustainability train” for other reasons as well, whether it be customer demand or a general feeling that it is the right thing to do. And despite all the progress, we still face some major global challenges – urbanization, water scarcity and the loss of arable land – to name just a few.
Will coatings manufacturers and others continue to focus on these issues and invest the R&D dollars necessary to solve these problems under the new administration? Or will a lack of government pressure, or even the elimination of regulations, stagnate these efforts?
How will re-negotiated trade deals affect imports, exports and relationships between global suppliers and manufacturers? Will demand increase or decrease in the architectural, industrial and special purpose coatings markets? Will uncertainty in general be bad for business?
Amid all of these questions, the coatings landscape also continues to change. The acquisition of The Valspar Corp. by Sherwin Williams is one of several recent industry shake ups. As of October 28, both companies continue to expect the transaction to close by the end of the first quarter in 2017 despite market rumors concerning regulatory approvals. On the supplier side, Dow Chemical and DuPont await approval on their merger. On November 15, Bloomberg reported that both companies expect formal objections to their $60 billion agreement from European Union regulators as early as this month, listing potential antitrust concerns with their bid to form the world’s biggest chemical company. Also in the news is Dow Chemical’s takeover of Dow Corning and Evonik Industries’ acquisition of Air Products & Chemicals’ Performance-Materials Unit. We’re also seeing a jump in private equity groups on the merger and acquisition scene (especially with distributors), acquiring multiple small companies and merging them together.
I think it is safe to say that change is in the air; whether it will be change for the good or not remains to be seen. Best of luck to everyone navigating these uncertain waters. I am really curious to know what I’ll be writing about in December of next year as we look back at 2017.