Additives Roundtable – Industry Leaders Share Their Thoughts on Key Issues

By Cynthia Challener

Suppliers of additives to the paint and coating, industry face the same issues that others in the chemical industry have to overcome. Key among the issues are rising raw material and energy prices, globalization and consolidation, growing competi­tion from emerging regions, and increasing regula­tory restrictions. Successful additives producers seek out the opportunities presented by these challenging conditions. Industry leaders emphasize expanded customer service and support offerings and focus on investment in innovation. The global market for additives used in paints and coatings is valued at $2.9 billion, according to The ChemQuest group, a management consulting firm located in Cincinnati, OH.

The North American market, which accounts for 40% of the worldwide value, is worth $ 1. 15 billion and is growing at 3 .1 % per year. Despite accounting for a minimal percent­age of overall formulations, additives do play a sig­nificant role in determining the performance capa­bilities of paints and coatings. As a result, heavy demands are placed on additives producers by their downstream customers. Market forces affecting the downstream supply chain can be strongly felt by ad­ditives suppliers as well.

Consolidation in the global coatings market is one trend that has impacted the entire supply chain. “We are seeing increased buying power on the part of the large paint companies, giving them better price leverage over their suppliers,” says Chem Quest vice president Michael D. Brown. “While the smaller size of the average additives supplier makes this pressure more acute, the fragmentation and cus­tomization of the additives market gives suppliers some relief.” ChemQuest forecasts continued con­solidation of formulators, particularly in the archi­tectural markets of North America and Western Europe.