Big News to Start Off a New Year
Like most people, I begin each new year with a sense of excitement and trepidation. I wonder what major news stories will make the headlines, both in the coatings industry and in the world at large. We ended 2012 with big news for the coatings industry: the announcement of the sale of AkzoNobel’s Decorative Paints Business to PPG Industries for $1.05 billion. The business represented about seven percent of AkzoNobel’s total revenue of $1.5 billion for 2011, and will more than double PPG’s North American architectural coatings presence. With the acquisition, PPG will now own about 600 AkzoNobel paint stores, creating a combined network of about 1,000 company-owned stores serving the North American market. We should now have a new leader in our annual Global Top 10 ranking of coatings manufacturers.
This news follows the announcement in November by Sherwin-Williams, the third-largest coatings company in the world, of its plans to buy Consorcio Comex, S.A. de C.V., a leader in the paint and coatings market in Mexico with headquarters in Mexico City. Comex had paint sales of $1.43 billion in 2011. These two acquisitions make PPG and Sherwin-Williams the clear leaders in the North American architectural coatings market.
In a statement made upon the announcement of the PPG acquisition, PPG Chairman and CEO, Charles E. Bunch, said that the company wanted to increase its share in the North American architectural paint market, “which we anticipate will benefit from a prolonged construction market recovery.”
The recovery of the construction market was also noted in a recent market report from Infiniti Research, which forecasts that the global coatings market will increase at a compound annual growth rate of 5.46 percent through to 2015. The industry is set to hit 8.7 billion gallons and $107 billion by the year 2017. The report cites key factors contributing to growth within the coatings market, including the recovery of global economies from the recent economic turmoil, rapid industrialization, increasing demand from end-use sectors such as automotive and construction, the increasing stringency in regulations, rising competition, growth in unique formulations, and technological and product developments.
Let’s hope the news for our industry in 2013 continues to point to growth and profitability. I look forward to sharing this new year with our PCIsubscribers and supporters, and wish you all a happy and healthy 2013!