Additives Update – Market Remains Attractive Despite Challenges

By Cynthia Challener

Additives for paints and coatings remains an attractive market despite rising raw material and energy costs. These materials serve a critical function in paints and coatings, enabling formulators to meet the ever higher performance demands of customers and increasingly stringent requirements of environmental regulators. The global coatings additives market continues to grow at a healthy rate.

Offshore competition has become an issue for North American producers in some segments of the market. Development of strong customer relationships, focus on service, and investment in innovation will drive the market in the future. The global coatings additives market in 2004 was valued at $2.7 billion, with North America accounting for 40% or $1.1 billion, according to Michael D. Brown, vice president of The ChemQuest Group.

The overall global growth rate for additives in paints and coatings is estimated to be 5% per year. According to ChemQuest, the market is nearly evenly divided between the five major categories of coatings additives: rheology control agents, surfactants (largely for wetting surfaces and pigments), specialties ( antioxidants, co catalysts, photoinitiators,and light stabilizers), biocides, and others ( corrosion additives in particular). Steven Nerlfi, with market research firm Kusumgar, Nerlfi & Growney, places the value of the North American market a bit higher at $ 1.5 billion, based on a volume of 560 million pounds.

He estimates the overall growth rate to be only 1 % per year. The growth rate for leading additives, including rheology modifiers, dispersants, and biocides, is 1-2% per year, according to Mr. Nerlfi. Silane adhesion promoters are the fastest growing segment but are still very small in volume, he states. A consumer-driven trend impacting additives suppliers is the increasing role of fashion, particularly for interior paint.

“There is a trend towards deeper colors for use in interior decorating. In these paint formulations, color uniformity and rheology control along with scrub and stain performance become increasingly important, 11 says Sandeep Goel, additives market manager with Rohm and Haas Company.