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For over 30 years, Irfab has produced highly regarded reports specializing in market assessment and long-term technology forecasting in the paint, coatings and related raw materials markets.

For over 30 years, Irfab has produced highly regarded reports specializing in market assessment and long-term technology forecasting in the paint, coatings and related raw materials markets.

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  • 1. Multi-client StudyGlobal Industrial Coatings Markets 2010 – 2020 0. Scope and Samples
  • 2. Multi-client StudyGlobal Industrial Coatings Markets 2010 – 2020 Scope and Samples Irfab Multi-client Studies are produced by The Paint Resaearch Association (PRA) Global Surface Coatings Covered A member of the Pera Innovation Network
  • 3. Scope and Samples Contents Scope of the Study 3Contents Structure of the Study 4 Sample Pages 5 Overview 1 Executive Summary 5 2 Economic Indicators 9 3 Regulations 9 Transport 4 Automotive OEM 10 5 Automotive Refinish 14 6 Motorcycles 18 7 Trucks, Buses and Other Vehicles 22 8 Rail 26 9 Aircraft 30 10 Marine Coatings 34 Construction & Infrastructure 11 Protective Coatings 38 12 Industrial Wood Coatings 42 13 Agriculture, Construction and Earthmoving 43 Where are a chapter has not yet 14 Pre-coated Metal Sheet 47 been published sample pages are Packaging & General Industrial taken from the previous study, Global Industrial Coatings Markets 15 Metal Packaging Coatings 48 2006 – 2020. 16 General Industrial Coatings 49 17 Plastic Coatings 53 Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-2
  • 4. Scope and Samples Scope of the Study The Global Industrial Coatings Markets 2006-2020 study provided a unique source of data and insights on thisScope of the Study broad and fragmented sector. However, at the time it was written the global economic downturn and its impact on coatings demand was not expected. The 2010 update provides the latest outlook to 2020 and examines how the markets for industrial coatings have been affected by the recession. The study examines each of the main geographic regions and builds a picture of global market dynamics. Our extensive programme of interviews has been extended to include not only paint manufacturers but many key players in the end-user markets, allowing us to provide comment on the most important country markets. A new report structure reflects this approach; each industry sub-sector includes a discussion of the underlying market drivers and dynamics before presenting an overview of coatings demand. Value and volume estimates are provided at the top level, with detailed segment and regional coatings demand presented in volume terms. The reference year for this study is 2009. To allow readers to easily compare and contrast with the pre- recession market, trend data is provided for the period 2005 to 2009. To ensure consistency across chaptersGeographic Regions scheduled for later release, our forecast includes commentary on market developments for 2010 and beyond,For the purposes of this study, unless otherwise accompanied by the latest available data.stated, we have adopted the followinggeographic regions for reporting purposes: Following feedback from subscribers to the original study, we have further refined our market definitions and, for the first time, we have introduced a new chapter relating to Plastics Coatings. The study also presents detailed► Europe annual projections of coatings demand for the next five years to complement our 2020 outlook. EU 27 plus Norway and Switzerland This makes the Global Industrial Coatings Markets 2010-2020 study our most ambitious and comprehensive► CIS & ROE industry review to date. It is an invaluable tool to improve understanding of the end-user coatings markets and to Former Soviet Union and Rest of Europe support strategic decision making.► MEA Middle East & Africa including Turkey► North America United States, Canada and Mexico (NAFTA)► South America Including Central America► Asia Pacific Including South Asia and Australasia Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-3
  • 5. Scope and Samples Structure of the Study Where appropriate the content of a chapter of the study follows a standard pattern.Structure of the Study 1 Executive Summary A succinct overview of the markets definition, size, value, technologies and The chapters of the study: drivers. Forecasts to 2015 and the outlook to 2020 are included. 2 Introduction Overview 2.1 Market Definition A detailed description of how we have defined the market and its segments. 1 Executive Summary 2.2 Macro Drivers The underlying factors that drive this coatings market. 2 Economic Indicators 2.3 Impact of Economic Downturn Highlights the most significant impacts of the global recession on this coatings 3 Regulations market. Transport 3 Technology 4 Automotive OEM 3.1 Current Technology A review of the technologies used in this market. 5 Automotive Refinish 3.2 Technology Systems A description of the technology systems used, both established and novel. 6 Motorcycles 3.3+ Technologies by segment A section on each market segment with details of its specific technologies. 7 Trucks, Buses and Other Vehicles 4 Markets 8 Rail 4.1 Global Market Drivers and Trends A detailed review of important influencing factors and how they affect end- 9 Aircraft user markets. 4.2 Global Market Size and Growth An overview of resulting coatings demand by region and segment. 10 Marine Coatings 4.3+ Markets by segment A detailed assessment of demand for coatings within each market segment. Construction & Infrastructure 5 Suppliers 11 Protective Coatings 5.1 Suppliers Global Position Who are the key suppliers, globally and regionally? 12 Industrial Wood Coatings 6 Outlook 13 Agriculture, Construction and Earthmoving 6.1 Forecast Commentary Developments since 2009 and summaries of key trends expected to drive 14 Pre-coated Metal Sheet future coatings demand Packaging & General Industrial 6.2 Forecast Data Comprehensive forecasts to 2020 by segment, technology and region. 7 Glossary Definitions of terms used in the text. 15 Metal Packaging Coatings 8 Terms and Conditions 16 General Industrial Coatings 17 Plastic Coatings The following pages are samples from the study. Where are a chapter has not yet been published pages from the previous study, Global Industrial Coatings Markets 2006 – 2020 are shown. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-4
  • 6. Scope and Samples Executive Summary Chapter Contents1. Overview — Executive SummaryThe Executive Summary is provided to subscribers of the Introductioncomplete study. It provides a concise overview of the Global SummaryGlobal Industrial Coatings Market, covering definitions,drivers and key technologies. The 2009 market size in Automotive OEMboth volume and value terms are also included,accompanies by volume projections for 2015 and market Automotive Refinishindicators for 2020. MotorcyclesThe sample pages presented are taken from thePreliminary Findings Summary, which was presented to Trucks, Buses and Other Vehiclesearly subscribers following completion of the initialresearch phase. RailThe Executive Summary, which will be published at the Aircraftconclusion of the study, will also incorporate top leveltrend data for each of the chapters for the period 2006- Marine Coatings2009, making it an ideal reference document for themanagement team. Protective Coatings Industrial Wood Coatings Agriculture, Construction and Earthmoving Pre-coated Metal Sheet Metal Packaging Coatings General Industrial Coatings Plastic Coatings Terms and Conditions Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-5
  • 7. Overview Executive Summary: Preliminary Findings Update Global Summary Global Industrial Coatings Demand by Region (tonnes)Global Summary Regional Share Trend Region 2006 2007 2008 2009 2009 % 2006-2009 Europe, Middle East, Africa • ••• ••• • ••• ••• • ••• ••• • ••• ••• •• ▼ Americas • ••• ••• • ••• ••• • ••• ••• • ••• ••• •• ▼ Asia Pacific • ••• ••• • ••• ••• • ••• ••• • ••• ••• •• ▲ Total •• ••• ••• •• ••• ••• •• ••• ••• •• ••• ••• ▼ Global Industrial Coatings Demand by Market Segment Region 2006 2007 2008 2009 Share % Automotive OEM ••• ••• ••• ••• ••• ••• ••• ••• •.• Automotive Refinish ••• ••• ••• ••• ••• ••• ••• ••• •.• Motorcycles •• ••• •• ••• ••• ••• ••• ••• •.• Trucks, Buses and Other Vehicles ••• ••• ••• ••• ••• ••• ••• ••• •.• Rail ••• ••• ••• ••• ••• ••• ••• ••• •.• Aircraft •• ••• •• ••• •• ••• •• ••• •.• Marine Coatings • ••• ••• • ••• ••• • ••• ••• • ••• ••• •.• Protective Coatings • ••• ••• • ••• ••• • ••• ••• • ••• ••• •.• Industrial Wood Coatings • ••• ••• • ••• ••• • ••• ••• • ••• ••• •.• Agriculture, Construction & Earthmoving ••• ••• ••• ••• ••• ••• ••• ••• •.• Pre-coated Metal Sheet ••• ••• ••• ••• ••• ••• ••• ••• •.• Metal Packaging ••• ••• ••• ••• ••• ••• ••• ••• •.• General Industrial • ••• ••• • ••• ••• • ••• ••• • ••• ••• •.• Total •• ••• ••• •• ••• ••• •• ••• ••• •• ••• ••• Global Industrial Coatings Markets 2010 – 2020 © PRA 2010 Page 1-4
  • 8. Overview Executive Summary: Preliminary Findings Update Protective CoatingsChapter 11. Protective Coatings Protective coatings fall into three categories: Infrastructure; Chemicals, Oil & Gas; and Process Industries. The coatings covered by this chapter are applied to steel and concrete substrates to provide corrosion resistance, fire protection and to protect structures exposed to hazardous operating conditions from environmental damage (hazardous conditions are those classified as C3 and above by ISO 12944) The global market for protective coatings is worth approximately €•.• billion driven by coatings consumption of around •.• million tonnes. As protective coatings covers a wide range of markets the drivers will vary for each segment. However, in general terms the overall macro demand drivers are: Government policies relating to investment in infrastructure and the economic stimulus packages proposed and implemented in response to the economic crisis of 2008 and 2009. The global prices for major commodities (i.e. oil, gas and metals). High prices drive investment in exploration and production and revenue generated allows the commodity producing countries to invest in infrastructure. Harmonisation of global regulatory requirements and regional legislation. Service life performance and the requirement to ensure efficient compliance with quality and environmental demands imposed on corrosion protection. Waterborne technology has increased share considerably to 15% penetration. Powder coatings have 4% technology share. Solventborne accounts for 81% of the technology, of which 36% are medium solids and 45% are high solids. Global Industrial Coatings Markets 2010 – 2020 © PRA 2010 Page 1-19
  • 9. Overview Executive Summary: Preliminary Findings Update Protective Coatings Infrastructure accounts for approximately 40% of protective coatings consumption. The oil and gas industry is the next largest segment, accounting for around 35% of demand. Substantial levels of growth are expected in the Middle East and Asia Pacific as the countries modernise their infrastructure. A high level of growth is expected in Brazil due to government policy of awarding majority of contracts to domestic players. Infrastructure in the United States is aging and is attracting considerable investment to update. The five year economic development plans of countries such as China and India make infrastructure a major focus. The Chinese 12th Five Year Plan 2011 to 2015 is currently being developed by the Government, which is based is on the assumption that GDP will grow at a rate of approximately 8% per year. This level of growth will drive investment in all the key Protective Coatings Sectors. Brazil is expected to invest in infrastructure for the 2016 Olympics and the 2014 World Cup. Global Coatings Demand (tonne) Region 2006 2007 2008 2009 Trend 2006-09 Europe, Middle East, Africa ••• ••• ••• ••• ••• ••• ••• ••• ▲ Americas ••• ••• ••• ••• ••• ••• ••• ••• ▲ Asia Pacific ••• ••• ••• ••• ••• ••• ••• ••• ▲▲ Total • ••• ••• • ••• ••• • ••• ••• • ••• ••• ▲ Region 2009 Share % CAGR % 2015 2020 Outlook Europe, Middle East, Africa ••• ••• ••.• •.• – •.• ••• ••• ▲ Americas ••• ••• ••.• •.• – •.• ••• ••• ▲ Asia Pacific ••• ••• ••.• •.• – •.• ••• ••• ▲▲ Technology 2009 Share % CAGR % 2015 2020 Outlook Waterborne ••• ••• ••.• •.• – •.• ••• ••• ▲▲ Solventborne • ••• ••• ••.• •.• – •.• • ••• ••• ● Powder •• ••• •.• •.• – •.• •• ••• ▲▲ Note: the data for 2006 has been adjusted from that shown in the original Global Industrial Coatings Market study following a re-evaluation of the information. Global Industrial Coatings Markets 2010 – 2020 © PRA 2010 Page 1-20
  • 10. Scope and Samples Pages from Global Industrial Coatings Markets 2006 – 20202. Overview — Economic Indicators3. Overview — RegulationsThese chapters consolidate information taken from the study chapters concerning the macro-economic and regulatory environments that affect each of the markets.Presented with the Executive Summary to subscribers of the complete study, they combine toprovide valuable information on key economic trends, underlying market drivers andregulatory influences on the Global Industrial Coatings Market. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-9
  • 11. Scope and Samples Automotive OEM Chapter Contents4. Transport — Automotive OEM 1 Executive Summary 4 Markets 5 Suppliers 2 Introduction 4.1 Global Market Drivers and Trends 5.1 Suppliers Global Position A Automotive Vehicle Production 2.1 Market Definition 6 Outlook B Performance of the Global Economy 2.2 Macro Drivers C Household Disposable Income 6.1 Forecast Commentary D Oil Prices and Costs of Raw Material Inputs 2.3 Impact of Economic Downturn 6.2 Forecast Data E Growing Environmental Awareness and Green 3 Technology Mobility 7 Glossary F Availability of Finance 3.1 Automotive Supply Chain and Material Substrates 8 Terms and Conditions 4.2 Principal Automotive Producers 3.2 The Body Coating Process A Toyota 3.3 Current Technology B General Motors (GM) A Electrocoat Layer C Volkswagen AG (VW) B Primer Surfacer Layer D Renault-Nissan Group C Basecoat Layer E Ford Motor Company D Clearcoat Layer F Hyundai Motor Company E Single Finish Coat Layer G Fiat-Chrysler Group F Comparative Layer Costs and Economics of Supply H Honda Motor Company I PSA Peugeot-Citroën 3.4 New Developments and Standards J Suzuki Motor Corporation A New Developments in Coating Processes B Other Developments 4.3 Global Market Size and Growth C Standards A Automotive OEM Coatings Demand in Asia Pacific B Automotive OEM Coatings Demand in Europe, Middle East and Africa C Automotive OEM Coatings Demand in the Americas Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-10
  • 12. Transport Automotive OEM TechnologyTypical Automotive Body Coating Process 3.2 The Body Coating Process The coating processes used by the automotive industry for metal bodies and plastic components differ. Coating of bodies is carried out in-house by the OEM whereas plastic components (see Chapter 17: Coatings for Plastics) are normally supplied to the manufacturer ready finished by the Tier 1 or 2 suppliers. All coatings used by the Tier 1 and 2 suppliers must be fully approved by the OEM. Although there are some variations depending on company manufacturing strategies and production line design, all of the mass-production vehicle manufacturers typically adopt a similar coating process. The standard approach is a three or four coat process, the coatings layers being: 1. Electrocoat 2. Primer surfacer 3. Top coat. Between coats, the body will normally undergo a manual sanding operation to provide a smooth base for the application of subsequent coats. This is particularly important before the application of the top coat to ensure a high quality finish. The top coat can be either one coat of a solid colour top coat; or one colour basecoat followed by a clearcoat. Before painting, the vehicle body passes through a rigorous inspection, known as the ‘body in white’ operation. The vehicle shell passes through a brightly lit white room and is fully wiped down by visual inspectors using cloths soaked in hi-light oil, which allows inspectors to identify defects in the body panels. The shell is then immersed and cleaned of all residual oil, dirt and contaminants. Once the vehicle body has been cleaned, it moves through a drying booth before receiving the electrocoat. The body again enters a drying booth before being prepared for the final coating operations. The body will normally undergo manual sanding operations after the application and curing of the electrocoat and the primer surfacer to provide a smooth base for the application of subsequent coats. The top coat can be either one Automation of coating lines is growing and external body surfaces are increasingly spray-painted by robots. coat of a solid colour top coat; Automotive OEMs are starting to use robots for the internal surfaces to further reduce operating costs, but still or one colour basecoat with a manual touch-in facility to coat difficult areas that provides an additional on-line quality inspection stage. followed by a clearcoat Each of the separate coating layers are cured at temperatures exceeding 135ºC (275ºF) before the application of the next layer, with the exception of the basecoat. The basecoat is only dried at ambient or elevated temperature before application of the clearcoat, the two layers then being fully cured in one operation. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 4-8
  • 13. Transport Automotive OEM MarketsGlobal Vehicle Manufacturing by Major CountryProducer in 2006 and 2009 (million units) A Automotive Vehicle Production Worldwide automotive vehicle manufacturing output declined as a result of the recession by 4.6% in 2008 and 12% in 2009 to around 58.3 million vehicles produced. The industry recovered strongly in 2010 and production output increased by over 25% to over 72 million vehicles. This growth is driven mainly by the emerging markets in the Asia Pacific region, where China has overtaken Japan and the US to become the largest single country producer of automotive vehicles in the world. The Asia Pacific region accounts for over 45% of vehicles produced. Western Europe is the next largest regional industry, accounting for around 25% of vehicle output in 2009 followed by North America, which produced just under 15% of global vehicle output. The industry is highly competitive with a number of well established manufacturers. Many suppliers offer their products to the global market competing in a number of vehicle categories. Typically it takes between three and five years to design and build a new vehicle. There are two significant trends shaping the global automotive industry: Increasing competition Localisation of production The level of competition in the automotive industry is intense and consolidation has resulted in an increase in larger groups competing to supply the market. The competitive intensity increases as more manufacturers become larger. In 1995 nine automaker groups produced 80% of global output, which did not change significantly for the next ten years. However, between 2005 and 2010 the number of manufacturer groups supplying 80% of world output reached twelve. Competitive pressures are expected to continue increasing as industry dynamics change due to further consolidation and new entrants in the emerging economies; it is expected that 15 manufacturer groups will supply 80% of global output by 2020. The volume of locally produced vehicles is increasing as manufacturers seek to maximise the effectiveness of their supply chains. Data produced by IHS Automotive suggests that the number of vehicles manufactured in the areas where they were sold rose from about 50 million in 2005 to 60 million in 2010. The global volume of locally produced vehicles is expected to reach 80 million by 2015 and 90 million by 2020 with most of the increase being due to expanding production in China. In contrast, vehicle import levels have remained fairly constant at between 12 million and 13 million units per year over the period 2005 to 2010. The regional re- distribution of automotive production, primarily driven by the emerging markets, is a long-term trend that accelerated during the economic downturn and is expected to intensify by 2020 due to regional demand dynamics and political drivers. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 4-25
  • 14. Transport Automotive OEM OutlookForecast World Coatings Demand by Segment2010-2020 Forecast Coatings Demand by Product Segment 2010-2020 (million litres)(million tonne) 2010 2011 2012 2013 2014 2015 2020 Europe, Middle East & Africa •••.• •••.• •••.• •••.• •••.• •••.• •••.• The Americas •••.• •••.• •••.• •••.• •••.• •••.• •••.• Asia Pacific •••.• •••.• •••.• •••.• •••.• •••.• •••.• Overall Coatings Demand •••.• •••.• •••.• ••••.• ••••.• ••••.• ••••.• Forecast Coatings Demand by Product Segment 2010-2020 (million litres) 2010 2011 2012 2013 2014 2015 2020 Passenger Cars •••.• •••.• •••.• •••.• •••.• •••.• ••••.• Light Commercial Vehicles •••.• •••.• •••.• •••.• •••.• •••.• •••.• Overall Coatings Demand •••.• •••.• •••.• ••••.• ••••.• ••••.• ••••.•Forecast World Coatings Demand by Technology2010-2020(million tonne) Forecast Coatings Demand by Technology 2010-2020 (million litres) 2010 2011 2012 2013 2014 2015 2020 Solventborne •••.• •••.• •••.• •••.• •••.• •••.• •••.• Waterborne •••.• •••.• •••.• •••.• •••.• •••.• •••.• Powder coatings •.• •.• •.• •.• •.• •.• •.• Electrocoat •••.• •••.• •••.• •••.• •••.• •••.• •••.• Overall Coatings Demand •••.• •••.• •••.• ••••.• •••• ••••.• ••••.• Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 4-71
  • 15. Scope and Samples Automotive Refinish Chapter Contents5. Transport — Automotive Refinish 1 Executive Summary 4 Markets 2 Introduction 4.1 Global Market Drivers and Trends A Road Safety Evolution 2.1 Market Definition B Motor Insurance Industry 2.2 Macro Drivers C Car Scrapping Schemes D Company Fleet Market 2.3 Impact of Economic Downturn E Passenger Car Market 3 Technology F Refinish Product Marketing 3.1 Current Technology 4.2 Global Market Size and Growth A Body Fillers and Putties A Automotive Refinish Coatings in the Americas B Primers and Primer Surfacers B Automotive Refinish Coatings in EMEA C One-Coat Topcoats C Automotive Refinish Coatings in APAC D Basecoats 4.3 Suppliers Global Position E Clearcoats 5 Outlook 3.2 Regional Coating Technology A Coatings Technology in Europe, Middle East 5.1 Forecast Commentary and Africa 5.2 Forecast Data B Coatings Technology in the Americas C Coatings Technology in Asia Pacific 6 Glossary 3.3 Standards and New Developments 7 Terms and Conditions A Regulations B UV Curable Refinish Products C Colour Matching Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-14
  • 16. Transport Automotive Refinish Technology C Colour MatchingRegional Variations in Colour Preferences: World Accurate colour matching remains an important aspect of this market; even the same OEM colour applied on different production lines can vary. The coating manufacturers are investing in improving their colour matching systems and are adding new colours to their ranges to meet the demand from the purchasers of new cars for new, more exotic colour effects obtained from, for example, speciality colour shift pigments. The choice of vehicle colours for passenger cars varies across the world according to culture and taste but metallic finishes (silver) and black are consistently popular along with white. Automotive Refinish Products — Regional Variations in Colour Preferences for 2010 South Global Europe US Japan China South Korea Colour America % % % % % % % Silver 26 17 17 24 33 33 33 Black 24 24 18 22 23 31 26 Grey 16 19 15 5 13 18 14 Blue 5 9 9 10 3 2 3 Red 6 7 11 3 9 4 4 Light brown / Beige 3 5 5 3 3 1 1 White 16 14 21 28 13 9 18 Green 2 1 2 1 3 1 1 Others 2 4 2 4 0 1 0 Source: DuPont Automotive Systems – Global Colour Popularity Report Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 5-22
  • 17. Transport Automotive Refinish MarketsConsumption of Coatings for Automotive Refinish C Automotive Refinish Coatings in APACby Category: Asia Pacific The market for Automotive Refinish coatings in Asia Pacific is estimated to be over ••• million litres (•••,•••(million litre) tonnes) following continued growth during the recession with around 3% CAGR over the period 2006 to 2009. This resulted in an estimated market value of around €1.6 billion. Asia Pacific Consumption of Coatings for Automotive Refinish by Category 2005 – 2009 (000 litres) 2005 2006 2007 2008 2009 Filler • ••• • ••• • ••• • ••• • ••• Primers •• ••• •• ••• •• ••• •• ••• •• ••• Basecoat / colour coat •• ••• •• ••• •• ••• •• ••• •• ••• Clearcoat •• ••• •• ••• •• ••• •• ••• •• ••• Total ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• % change •.•% •.•% •.•% •.•% The Asia Pacific region was the best performing market for Automotive Refinish coatings during the recession and in 2010, the market has continued to grow, reaching almost ••• million litres (•••,••• tonnes) with an approximate value of €1.8 billion. The region presents a mix of market dynamics, ranging from the mature, relatively static markets of Japan, Korea and Australia to the high growth markets of China and India, with annual growth rates of 10% to15%. Other developing markets, such as Thailand, also exhibit good growth rates at around 7% per year. The growing spending power of populations in the developing countries of Asia Pacific, together with the increasing importance of the region as a car manufacturing centre, will ensure continued growth at a comparatively faster pace than the markets in Europe and North America for the next ten years.Average Sales Price of Coatings by Category:Asia Pacific The types of coating used in this market range from similar technologies as used in North America, Europe and Japan. Traditionally nitrocellulose and air-dry alkyd paints have been used in China and India and are still available► Filler 5.00 /kg in these countries. However, there is a growing environmental awareness and use of low-VOC compliant► Primers 6.00 /litre technology, both high solids and waterborne basecoats in both these countries and across the Asia Pacific region.► Colour coat 10.00 /litre The Chinese and Indian markets are both exhibiting rapid growth as car ownership per head of population increases with higher levels of consumer spending power. An important distinction between the Chinese market► Clear coat 8.00 /litre and the mature market of Japan is the large number of first-time buyers. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 5-42
  • 18. Transport Automotive Refinish Markets AkzoNobel has significantly boosted its presence in the Chinese automotive market after acquiring ChangzhouMarket Leaders for Automotive Refinish Coatings: Prime Automotive Paint Co. Based in Jiangsu province, Prime is one of China’s largest vehicle refinish suppliersKorea and a leader in the fast-growing mid-market segment. This sector is estimated to double in size within the next five years. AkzoNobel is also the preferred global supplier of car refinishes to the Chinese automotive manufacturer Great Wall Motors. AkzoNobel’s Refinishes business has focused mainly on China’s premium and commercial vehicle refinish sector. PPG is active in China and extended its distribution network with the acquisition of Bonny Paints in 2008. DuPont, BASF and Nippon Paint are all present in the market. BASF has a customer service centre in Shanghai and Shenyang to improve its capabilities for this market. There are also a large number of Chinese companies supplying the domestic market. The top local supplier is Onwings from Donglai Coating Technology (Shanghai). South Korea represents the third largest Automotive Refinish market in the Asia Pacific region and has been growing, reaching a value of around $125 million in 2009. Further growth is forecast as the number of cars increases. The market has a range of local as well as multi-national companies supplying products. KCC Paints is the market leader in this country with an estimated 34% of the local market. NOROO Paint & Coatings is the next largest player and has been actively developing its Automotive Refinish business, generating $32 million sales in 2009 and securing 25% of the market. NOROO have joint ventures in China, Saudi Arabia and Vietnam and introduced a waterborne basecoat technology called HiQ Water Color to the market in 2009. BASF has also established a technical centre for developing advanced eco-friendly coatings for the automotive industry in South Korea. Their plans are to conduct research and development of waterborne coatings for useMarket Leaders for Automotive Refinish Coatings: by automotive OEMs as well as the technology for an integrated coating process, which yields more cost-India efficient results. This in turn will help the transition to use globally accepted waterborne basecoat technology in the Automotive Refinish market. India presents a significant opportunity as the Automotive Refinish coatings segment is one of the country’s fastest growing areas in the industrial paints market. The potential opportunity offered by this market results in intense competition in the coatings supply industry. Automotive Refinish coatings, which constitutes approximately 30% of overall automotive coatings demand in India, is witnessing tremendous growth due to: The fast growing second-hand used vehicle market A preference for high value, high performance coating technologies, such as polyurethane paints, substituting the traditional forms of refinishing paints such as nitrocellulose and synthetic alkyds. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 5-44
  • 19. Scope and Samples Motorcycles Chapter Contents6. Transport — Motorcycles 1 Executive Summary 4 Markets 5 Suppliers 2 Introduction 4.1 Global Market Drivers and Trends 5.1 Suppliers Global Position A Motorcycle Production 2.1 Market Definition 6 Outlook B Performance of the Global Economy 2.2 Macro Drivers C Household Disposable Income 6.1 Forecast Commentary D Population and Urbanisation Growth 2.3 Impact of Economic Downturn 6.2 Forecast Data E Growing Environmental Awareness 3 Technology F Availability of Finance 7 Glossary 3.1 Current Technology 4.2 Principal Motorcycle Producers 8 Terms and Conditions A Liquid Coatings: Solventborne and A BMW Motorrad Waterborne B Bajaj Auto B Powder Coatings C Harley Davidson C Electrocoat D Honda D UV Coatings E Kawasaki F Piaggio Group 3.2 Coatings Technology by Application G Suzuki A Metal Components H Yamaha B Plastic Components 4.3 Global Market Size and Growth C In-Mould Coating A Motorcycle Coatings Demand in Asia Pacific B Motorcycle Coatings Demand in the Americas C Motorcycle Coatings Demand in Europe, Middle East and Africa Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-18
  • 20. Transport Motorcycles Technology A Liquid Coatings: Solventborne and Waterborne The coating technologies used in the motorcycle industry is a combination of those used in the Automotive OEM and Automotive Refinish markets. The choice will normally depend on the type of component beingMotorcycle Colour Preferences: World coated and the volumes being produced for specific components. The colour scheme is also a consideration. One-component Technologies One-component coatings are used primarily for coating metal parts and are mainly oven-cured coatings based on polyester or acrylic; the same types as those used in the Automotive OEM industry. Metallic base coats used for both metal and plastic parts are also one-component types. Primer surfacers are used direct to pretreated bare metal for corrosion resistance, or over an electrocoat primer where higher performance and appearance is required. Solventborne coatings are normally based on polyester, cross-linked with a melamine hardener. Medium or high solid types are used depending on VOC regulations. Waterborne primer surfacers are also based on polyester melamine technology. The majority of primers are solventborne. Base coats and colour coats are increasingly important as OEMs use more complex pigments (such as pearlescent natural and synthetic micas or other special effect pigments) and increase their range of colour bases for new models. For solid colour finishes typically applied to smaller two wheeler models, a single finish coat of a solventborne acrylic melamine top coat is used. Waterborne coatings are rarely used for these finishes. For higher value machines, a two coat base and clear system is applied. Metallic or pearlescent colour schemes are also common for larger machines. One-component base coats are used in both oven cured, one- component coating processes and when a two-component coating clearcoat is used. Solventborne, oven-cured base coats can be based on acrylic, polyester or acrylic/polyester combinations, Base coats and colour coats are depending on the coating supplier, with CAB being incorporated into metallic colour formulations to provide increasingly important as OEMs use consistent colour development during spray application. These are cross-linked with melamine or blocked isocyanate. Base coats used with two-component coating processes are based on thermoplastic acrylics. more complex pigments and increase their range of colour bases Waterborne base coats are based on a combination of acrylic and polyurethane dispersions, cross-linked with melamine or blocked isocyanate for oven cure processes or based on air dried binders when used with two- component clearcoats. Clearcoats are exclusively solventborne in this market as waterborne types do not meet the performance and appearance requirements. One-component clear coats are based on acrylic, normally cross-linked with melamines. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 6-6
  • 21. Transport Motorcycles MarketsMotorcycle Manufacturers: India India is still the second largest producer with the output exceeding 11 million units, accounting for over 20% of► Bajaj Auto motorcycle production in the Asia Pacific region. Domestic sales of motorcycles and other PTWs have increased in India since 2006, contributing to production growth of 7.3% CAGR over the period 2006 to 2009.► Escorts Group Motorbikes account for over 80% of the total market. A number of factors have influenced consumer► Hero Group preferences: motorbikes have replaced scooters as the preferred means of individual transport due to their► Honda Motorcycle & Scooter India (HMSI) higher load capacity; motorbikes are more fuel-efficient and aesthetically appealing. Two-wheeler exports have grown at around 25% CAGR between 2005 and 2010, exceeding one million units in 2009.► Ideal Jawa The Indian industry landscape changed in late 2010 when market leader Hero Honda, the long-standing joint► Kinetic Engineering venture between Hero Group and Honda Motor Company, was dissolved. Hero Group bought Honda’s 26%► Lohia Machinery stake and has plans for re-branding in order to target both the domestic and highly competitive international► Mopeds India markets. Honda Motor, which has a plant in the north of India, is building a second plant in Rajasthan, another northern state, and has plans to build a third facility in 2013 with capacity for 1.2 million vehicles. A new facility is► Royal Enfield expected to start manufacturing in 2011 with an annual production capacity of 600,000 units, which will double► TVS Motor in March 2012. These new facilities will supply the domestic market and export to Latin America. Bajaj Auto was the second largest two-wheeler manufacturer in India before the dissolution of Hero Honda. The market is likely to see increased competition over the next few years as a result, particularly in the luxuryMotorcycle Manufacturing Output: India motorbikes segment, including premium sports bikes. With over 285,000 estimated millionaire households atmillion units the end of 2011, India is expected to have the largest growth in total millionaire wealth of the emerging economies to 2020 and the luxury motorbike segment is expected to be the fastest growing domestic market. Harley Davidson, Ducati, Hyosung and BMW have all announced intentions to compete on the Indian market for premium motorcycles. Royal Enfield, Bajaj Auto, Suzuki, HMSI and Mahindra are also planning to introduce new products. While Ducati plans to bring premium motorcycles into India, Harley Davidson and South Koreas S&T Motors have already established plants to assemble their vehicles within the country as government tax policies make domestically produced motorcycles far more attractive. One feature of the Indian market is the large three-wheeler segment, where the vehicles are used for passengers and freight to cope with urban congestion. Three-wheeler production has grown by over 9% CAGR over the period 2005 to 2009 to reach around 620,000 units. Bajaj Auto is the largest domestic player in the three-wheeler segment, accounting for 95% of exports in 2010. The company export markets include: Sri Lanka, Egypt, Nepal and Bangladesh. Piaggio Vehicles, of Italy, leads in terms of volume sales and recently launched its 1.3 tonne three-wheeler Ape in India. Mahindra & Mahindra also recently launched its three- wheeler passenger vehicle Alpha Passenger. Force Motors, a joint venture between Bajaj Tempo and MAN, is a leading player in the goods carrier segment. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 6-16
  • 22. Transport Motorcycles Markets Grupo Elektra is the largest domestic producer or motorcycles through its Italika brand, and has had salesMotorcycle Production 2009: Americas growth since 2005, claiming a share of 55% in 2009. The company produced 61,000 motorcycles in 2008,(000 units) rising to 123,000 in 2009. Export markets are: Honduras, Peru, Guatemala, and Brazil. International players like Honda, Yamaha, Suzuki and Harley Davidson are all present. In 2010, Polaris Industries announced the opening of a new plant in Mexico. Polaris is the parent company of Victory Motorcycles in the US. The United States suffered a collapse in production output of 40% during 2009. The production volume contracted by 19.5% negative CAGR over the period 2006 to 2009, falling from 1.1 million units to 0.6 million. Sales were also recorded at low levels, showing a declining trend for the past four years. The US is also the largest market for All Terrain Vehicles (ATVs) in the world, where they are used for sport and hunting. According to the Motorcycle Industry Council, domestic sales declined by over 14% in 2009 to less than half of their 2006 level. Sales of highway motorcycles were 383,000 units in 2009 compared to 660,000 and 724,000 units sold in 2008 and 2007 respectively. While the recession affected all geographical markets, the US market was worst affected as the motorcycle is mainly used for sports and recreation. There are a number of motorcycle manufacturers producing low-volume custom-made, unique and expensive models to this market. As consumers curtailed discretionary spending, the industry suffered and in 2009, Texas-based American IronHorse filed for bankruptcy. Another US manufacturer of high-style, custom vehicles, Big Dog Motorcycles, closed in April 2011. The most important domestic producer in the US is Harley Davidson, which experienced a significant fall inMotorcycle Production Trends 2005–2010: revenues due to the recession. Production numbers for Harley Davidson also indicate the pressures in theAmericas domestic market as the proportion of units destined for export has continued to increase from 21.8% in 2006 to 37.5% in 2010. Argentina experienced a dramatic increase of 58% in 2006 but has slowed to an average annual growth rate of between 7% and 8% since. After a 5.5% drop in production in 2008, the industry recovered with positive growth of over 7% in 2009 and 8% in 2010 to pass pre-crisis production levels. Peru is another market with potential for growth. Production increased by 15% in 2007 and 16% in 2008 before declining by 3.2% in 2009. The industry showed signs of recovery in 2010 when output increased by 3.2% to reach 5,000 units of annual production. According to the National Census of Manufacturing Establishments, there are 78 motorcycle assembly facilities in Peru, one third of which is based in the capital Lima and Callao, the most important port in Peru. The most popular brands are: Honda, RTM, Bajbaj and Wanxin. In 2009, over 81% of imported motorcycles came from China, 14.8% from India, 2.4% from Brazil and less than 1% from Japan. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 6-21
  • 23. Scope and Samples Trucks, Buses and Other Vehicles Chapter Contents7. Transport — Trucks, Buses and Other Vehicles 1 Executive Summary 4 Markets 5 Suppliers 2 Introduction 4.1 Global Market Drivers and Trends 5.1 Suppliers Global Position A Performance of the Global Economy 2.1 Market Definition 6 Outlook B Freight Trends 2.2 Macro Drivers C Urbanisation 6.1 Forecast Commentary 2.3 Impact of Economic Downturn 4.2 Production of Trucks, Buses and Other 6.2 Forecast Data Vehicles 3 Technology 7 Glossary A Truck Manufacturing 3.1 Current Technology B Trailer Production 8 Terms and Conditions C Bus and Coach Production 3.2 Technology Systems D Other Vehicles Production A Solventborne and Waterborne Liquid Coatings 4.3 Principal Truck and Buses Producers B Electrocoat A Isuzu Motors C Powder Coatings B Daimler AG D Other Coating Systems C Tata Motors D Volvo Group 3.3 Truck Coatings A Chassis 4.4 Global Market Size and Growth B Cabins A Truck and Bus Coatings Demand in Asia C Bodies and Trailers Pacific B Truck and Bus Coatings Demand in the 3.4 Bus and Coach Coatings Americas A Chassis C Truck and Bus Coatings Demand in B Bodies Europe, Middle East and Africa 3.5 Other Vehicles 3.6 New Developments and Standards A New Developments in Vinyl and Decal Technologies B Standards Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-22
  • 24. Transport Trucks, Buses and Other Vehicles Technology Use of Plastics and CompositesUse of Plastics and Composites in a Typical Truck Whilst the majority of truck and bus components are manufactured from metal, there is a rapidly developing trend for greater use of composite and plastic parts, particularly in North America and Europe. These materials offer the potential for vehicle weight reduction, reduced fuel consumption and a wider range of styling options. Plastic body parts allow OEMs to offer differentiated products with operational advantages and strong visual impact. Composite and plastic materials generally have better resistance to climate and adverse environments, but have relatively low resistance to impact and buckling when compared to metal substrates. Consequently, they tend to be used for non-structural components and where impact absorption, rather than those where impact resistance, is required. Despite these material constraints, the coatings industry can expect a progressive change from metals towards plastic and ‘smart’ materials over the next ten years. Currently, it is estimated that plastic parts account for up to 40% of the total coatings consumption for a typical cabin, depending on the design. Adoption is expected to increase as plastics find wider adoption in the emerging industries. Many countries in the developing world still manufacture truck bodies and cabs almost entirely in metal. In some parts of India, China and Africa, large truck bodies are still produced using wooden components mounted onto a modern vehicle chassis. The pace of adoption for modern materials is also likely to be faster in these markets, where producers benefit from technology transfer from joint ventures and partnerships with established OEMs. The comparative costs of metal versus plastic components will be weighed against the benefits to lower running costs, which are achieved from the reduced overall vehicle weight. Luxury coaches and special buses produced in low volumes often have the entire front and rear ends manufactured from GRP, which allows the manufacturers to produce more aerodynamic and aesthetic designs. In contrast to the Automotive OEM industry, where the plastic components are supplied by the Tier 1 suppliers fully finished, these main truck and bus components are normally coated by the OEMs on the same paint lines as the metal components. As a result, the coating technologies and the volume demand are included in this chapter. Further information on the coatings used for the smaller plastic components, used in cabin interiors by truck and bus manufacturers, are included within the figures for Chapter 17: Coatings for Plastics. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 7-7
  • 25. Transport Trucks, Buses and Other Vehicles Markets GermanyTruck Production Output: Germany Germany is the largest market for trucks in Europe. Road haulage accounts for 95% of the total freight industry(000 vehicles) in value terms. After a relatively stable growth in truck production, which is attributed to increased levels of freight transportation, the annual output of trucks dropped in 2009. According to the VDA, German manufacturers reduced production by an average of 52% in response to falling orders, which resulted in overall reported output falling by 65% in 2009 to 89,000 trucks. Prior to the 2009 collapse, industry output had exceeded 200,000 units per year, and peaked at 257,000 units in 2008. There were signs of recovery in 2010, when new registrations of heavy trucks increased by 13.4% to reach 39,209 units. Reported output reached 134,000 units, but return to pre-recession levels is not expected before 2015. There is an industry concentration around Bavaria and Baden-Württemberg in the south of Germany. Germany is home to the world’s largest truck manufacturer Daimler, based in Stuttgart. The company represented over 55% of industry output in 2009, producing over 49,000 trucks from its German plants. Trucks are sold in Europe under the Mercedes-Benz brand. Due to rising demand in the emerging markets, Daimler Trucks received increased orders in 2010 and the company’s plants were operating at almost full capacity. This is welcome news following a fall in sales of 45% in 2009. Daimler also produces trucks in Portugal and Turkey. MAN experienced a decrease of 30% in 2009 sales, but reported an increase in new orders for commercial vehicles of 68% in 2010 due to improved conditions in Europe and continuing expansion in Brazil. The company produced just fewer than 15,000 vehicles in Germany during 2009, representing almost 17% of the industry’s output. Europe remains MAN’s most important region, generating 56% of all orders, where the main markets are Germany, the UK, France and Russia. The Americas represent 27% of sales and the remainder coming fromDomestic Truck Producers: Germany Asia Pacific. The main production facilities are in Augsburg (Bavaria) in the south and Ruhr (North Rhine-► Daimler Westphalia) in the northwest of the country.► MAN German manufacturers produce about 27% of trucks domestically and 73% at their foreign facilities. The most important locations for German manufacturers abroad are China and Brazil. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 7-49
  • 26. Transport Trucks, Buses and Other Vehicles Markets A Truck and Bus Coatings Demand in Asia Pacific In common with the Automotive OEM coatings market, the Asia Pacific region generates the highest demand for Asia Pacific region generates associated coatings in terms of estimated quantities consumed. In 2009 just over •••,••• tonnes the highest demand for (••• million litres) of coatings were used for Trucks, Buses and Other Vehicles. associated coatings... just over Not only does the Asia Pacific account for over 65% of worldwide demand, but it was the only region to •••,••• tonnes generate positive growth throughout the recessionary period. The estimated market demonstrated growth of 5.3% CAGR over the period 2006 to 2009, reaching a value of over €442 million. Coatings Demand for Asia Pacific 2005 – 2009 (tonne) 2005 2006 2007 2008 2009 Truck •• ••• •• ••• •• ••• •• ••• •• ••• Trailer •• ••• •• ••• •• ••• •• ••• •• ••• Bus •• ••• •• ••• •• ••• •• ••• •• •••Truck and Bus Coatings Demand: Asia Pacific Other Vehicles ••• ••• ••• ••• • •••(000 tonne) Total •• ••• ••• ••• ••• ••• ••• ••• ••• ••• % Change ••.• •.• •.• •.• The coatings demand in the Truck segment returned modest growth of 2% in 2009 over the previous year, following strong growth in each of the previous periods, to reach almost •• thousand tonnes (•• million litres). This represents over 62% of the regional coatings demand. The majority of this is generated by the leading truck production industry in China. Demand in this segment exhibited a 10.2% CAGR over the period 2006 to 2009, making it the best performing segment along with Trailers. Trailers demand is closely correlated to that of heavy trucks, as the units require the tractor unit for movement. Consequently, this segment exhibited similar growth pattern to that of Truck coatings demand, and reached ••,••• tonnes (•• million litres) in ••••. Bus coatings’ demand was artificially inflated in the early part of the review period due to Chinese investment in transit systems prior to the 2008 Olympics. This resulted in some degree of market re-balancing in 2008, but demand is still increasing largely thanks to the development of affordable urban transport and public transport infrastructure in Asia Pacific, particularly in China and India. The decline of 41% in 2008 contributed to an 11.1% negative CAGR for the period 2006 to 2009. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 7-80
  • 27. Scope and Samples Rail Chapter Contents8. Transport — Rail 1 Executive Summary 4 Markets 4.5 Rail Coatings Market in Americas 2 Introduction 4.1 Global Market Drivers and Trends A Market Drivers A Passenger Industry and Rail Freight B Market Dynamics, Size and Growth 2.1 Market Definition Performance 4.6 Rail Coatings Market in Asia Pacific 2.2 Macro Drivers B Urbanisation C Growing Environmental Awareness A Market Drivers 2.3 Impact of Economic Downturn B Market Dynamics, Size and Growth D Availability of Finance 3 Technology 4.2 New Build Rolling Stock 5 Suppliers 3.1 Current Technology A Rolling Stock Manufacturing and Trends in 6 Outlook Europe, Middle East and Africa 3.2 Technology Systems B Rolling Stock Manufacturing and Trends in 6.1 Forecast Commentary A One-Component (1K) Coatings the Americas B Two-Component (2K) Coatings 6.2 Forecast Data C Rolling Stock Manufacturing and Trends in C Fillers Asia Pacific 7 Glossary D Rail Refurbishment 3.3 Coatings Technology by Application 8 Terms and Conditions A Passenger Carriages and Multiple Units 4.3 Global Market Size and Growth B Locomotives A Freight Rolling Stock Coatings C Freight B Passenger Rolling Stock Coatings D Refurbishment C Locomotive Rolling Stock Coatings D Rolling Stock ‘Below the Solebar’ Coatings 3.4 General Coating Technology Trends A Passenger Carriages and Locomotives 4.4 Rail Coatings Market in Europe, Middle East B Freight Cars and Africa A Market Drivers B Market Dynamics, Size and Growth Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-26
  • 28. Transport Rail IntroductionRegional Share of Global Freight Carried by 2.3 Impact of Economic DownturnVolume The characteristics of the global rail supply markets remain North America, Asia Pacific and Europe. The impact of the economic crisis varied across these regions, and is evident in four areas: Freight volumes Business restructuring New orders Economic stimulus support Freight volumes declined. As trade volumes declined, global freight volumes fell by 15%. In the important Americas market, railroad operations declined by 10% to13% and in North America by as much as 18%. The resulting fall from the peak in 2008 retuned the industry to 2005 levels. In Europe, after several years of upward trends the recession resulted in declines in rail freight transportation during 2008 and 2009, falling by 2% and 17% respectively. Reduced freight volumes in these regions generated overcapacity and a large number of locomotives and freightNew Orders for Railroad Equipment Placed cars were left idle. By contrast, the Asia Pacific performed well during the same period and experienced growthwith Leading Suppliers of 6% in 2008, a slowdown of just 2% on the previous year. Moderate growth of 2% in rail freight volumes wasBillion € maintained in 2009. There were signs of recovery in 2010, as the global rail freight sector expanded by over 7% to reach a volume of nearly ten billion freight tonne kilometres. However, a return to 2008 levels is not expected until beyond 2012. New orders declined. The leading manufacturers experienced a decline in new order values of around 10% in 2009 as a result of the recession. This offset growth experienced in new orders during the previous year. However, new orders increased in value terms by over 41% in 2007, which contributed to 8.4% compound annual growth rate (CAGR) over the period 2005 to 2010. Therefore, impact of the economic downturn on the train manufacturing industry was less pronounced that other sectors and 2010 saw approximately €35.5 billion in 2010 in new orders. The industry expects continued order momentum in 2011and 2012. UNIFE, the Association of the European Rail Supply Industry, suggests that 44% of the global rolling stock manufacturing segment is attributed to replacement orders. Replacement orders are expected to be the main drivers for overall growth in rolling stock production to 2020. Asia is expected to contribute to growth though network expansion in line with urbanisation and linking main population centres. The Middle East and Africa region is also contributing to orders for new rolling stock for both European and Asian manufacturers. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 8-4
  • 29. Transport Rail Technology 3.3 Coatings Technology by Application A Passenger Carriages and Multiple UnitsTechnology Shares of Global Passenger Carriage Rolling stock designed for carrying passengers has four distinct areas in which the coatings are required to offerand Multiple Unit Coatings different performance properties. These are: Exterior sides Interior Roofs Below the solebar – chassis members, bogies, traction bars, etc. Exterior Side Coatings The sides of the carriages are the most visual parts of the rolling stock, and are finished in a variety of different colour schemes to reflect the livery of the operating company. The key performance requirements for exterior carriage body coatings are: High gloss and gloss retention Resistance to UV radiation and temperature cycles Chemical resistance, in particular to strong cleaning materials Scratch and chip resistance Rail companies operating urban services will also require the gloss and colour of the coating to be unaffected when graffiti is removed with strong solvents. The most widely used coating The most widely used coating system used in most parts of the world consists of a two component epoxy system used in most parts of the primer followed by a two component polyurethane finish. Some specifications require an intermediate primer world consists of a two surface layer, again based on two component polyurethane. The finish can be either a one coat system or, component epoxy primer where graffiti resistance is required, a coloured base coat followed by a clear coat. followed by a two component Whilst the basic technologies are common globally, the form in which they are used varies from region to polyurethane finish. region. The general trends are: In Europe, waterborne epoxy primers and waterborne polyurethane finishes are almost exclusively used. The clear coat is either waterborne or solventborne, depending on individual preference. The manufacturers of Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 8-10
  • 30. Transport Rail Outlook6 Outlook 6.1 Forecast Commentary Coating Demand Trend in 2010 As the global economy showed signs of recovery and world GDP returned to growth in many markets, improved production of key commodities traditionally transported by rail increased the demand for In 2010, rail coatings reached ... transportation and rolling stock. ••• million litres and a value of New freight cars orders and deliveries showed signs of recovery in the important US market. Freight cars €••• million. scrapped due to end of life contributed to a decrease of inactive rolling stock from 29% of the total rail capacity to about 21% by the beginning 2011, which means that about 30% of idle vehicles returned to operation. This generated estimated growth in rail coatings of around 7% in 2010, bolstered by an 18% increase in the new build coatings category and a 3% increase in refurbishment coatings. In 2010, rail coatings reached an estimated •• million litres (•••,••• tonnes) with a value of around €460 million. Rolling Stock Trends to 2020 The global economic recovery will continue to be unbalanced with GDP in the developed and emerging economies at below 3% and above 8% respectively to 2012. However, we believe that the rail manufacturing industry and demand for associated coatings will not mirror the projected economic growth profile. Looking forward to 2015 and 2020, regional specific factors will shape the growth of the rolling stock market. These include: The level of implemented infrastructure development projects Rolling stock replacement rates Regional levels of rail modernisation National preference for rolling stock types. For example, Russia and the United States need to replace aging freight cars that have been in operation for nearly 30 years. These two countries are also planning to introduce very high-speed trains, but they may not be as committed to this as Western Europe and Asia Pacific. Having already implemented major modernisation projects for their passenger fleet, when locomotive hauled and push-pull trains were replaced by multiple units, the demand for passenger coaches will decline in Western Europe. In Asia Pacific, the recent development of very high-speed (VHS) trains in China will be accelerated by further expansion to 20,000 km by 2015. India has big plans for modernisation of rolling stock and rail infrastructure development will further augment the growth level in China. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 8-61
  • 31. Scope and Samples Aircraft Chapter Contents9. Transport — Aircraft 1 Executive Summary 4 Markets 2 Introduction 4.1 Global Market Drivers and Trends 2.1 Market Definition A Global Aircraft Fleet B New Aircraft Production 2.2 Macro Drivers C Aircraft Size and Substrates 2.3 Impact of Economic Downturn D Maintenance, Repair and Overhaul of Aircraft 3 Technology 4.2 Global Market Size and Growth 3.1 Impact of Coatings on Flight Dynamics A Aircraft Coatings Demand in the Americas A The Dynamics of Flight B Aircraft Coatings Demand in Europe, Middle B Effect of Coatings on Flying Efficiency East and Africa C Aircraft Coatings Demand in Asia Pacific 3.2 Technology Drivers 4.3 Suppliers Global Position A Cost Considerations B Weight Reduction 5 Outlook C Environmental Impact 5.1 Forecast Commentary 3.3 Current Technology 5.2 Forecast Data A Civil Aircraft Coatings B General Aviation Aircraft Coatings 6 Glossary C Helicopter Coatings D Other Aircraft Coatings 7 Terms and Conditions E Maintenance, Repair and Overhaul Coatings 3.4 Standards and New Developments A Standards and Regulations B New Developments Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-30
  • 32. Transport Aircraft Technology B Effect of Coatings on Flying Efficiency The key factor with drag is air flowing over the airframe. Consequently, the critical consideration for aircraft The critical consideration for coatings is the smoothness of surface finish achieved by the topcoat. The effect can be considerable and led to aircraft coatings is the Boeing’s decision, for example, to use only one paint colour on the engine nacelle inlet of the latest 787 smoothness of surface finish Dreamliner. achieved by the topcoat Boeing found that the tiny edge created where one colour is laid over another affected airflow to such an extent that using only one paint colour could save as much as 22,000 gallons (more than 100,000 litres) of fuel per year. If that is accrued over the expected lifetime of the aircraft it creates savings of 880,000 gallons (or 4 million litres) per aircraft. The accumulated weight of coatings can also be significant. For example, the coatings dry-weight on the exterior of the Airbus A380 is approximately 1,600 pounds (725 kgs) compared to the exterior coatings dry-weight on a Boeing 747 of approximately 1,060 pounds (480 kgs). Typically, the exterior coatings on these aircraft consist of an epoxy primer, high solids topcoat, separate wing coating and a small quantity of area-specific coatings. The interior structural coatings can add a further 1,600 pounds (725 kgs). This gives a total coatings dry-weight on the aircraft of around 4,260 lbs (1,930 kgs) that has to be overcome by lift. Any reduction in weight that does not affect coating functionality will have an accumulating cost benefit. As a general guide, every kilogramme of weight removed from a commercial jet aircraft will save around 25 gallons of fuel per annum. New developments in nano-coatings offer an alternative to the traditional convention of smooth finish. Tiny dimples around the area of high drag forms a thin layer of slightly turbulent air between the surface skin and the boundary layer of the airflow over the surface. This layer has the effect of insulating the aircraft from some of the worst affects of local drag thereby reducing the overall drag coefficient to improve overall performance. Whether this high-end technology will be cost effective for widespread adoption by civil airline operators remains to be seen, but EasyJet are already trialling nano-coatings supplied by tripleO claimed to reduce carbon emissions by up to 2% and deliver fuel efficiencies. Gliders also trade height for speed and range. Anything that can increase speed for an equivalent loss of height will be of interest to the serious, competitive glider pilot. Increased speed will also extend the competitive range of a glider, so the premium cost of such a surface may be justifiable. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 9-6
  • 33. Transport Aircraft MarketsLeading Civil Aircraft Manufacturers by Output in 2010: B New Aircraft ProductionWorld North America has traditionally been the main producer of aircraft. This position was challenged with the► Airbus (France) emergence of Airbus during the 1970’s. Deregulation of the US market resulted in ‘legacy carriers’ facing stiff► Boeing (United States) competition from new entrants based on the low-cost airline model.► Bombardier (Canada) The emergence and success of low-cost carriers has changed the demand profile for aircraft producers. Demand is expected to diversify over the next five years with almost 50% of global demand generated in developing► Embraer (Brazil) countries. The increased demand for aircraft in the MEA and Asia Pacific regions, coupled with attractive labour costs, has resulted in manufacturing operations shifting to South America and Asia, particularly China where the aerospace industry has experienced significant growth. Large Civil Aircraft There are two major OEMs for large civil aircraft. These are:Airbus Deliveries and 2010 Order Book Airbus Industries The Boeing Company The industry is traditionally very competitive and consolidation has resulted in the two major manufacturers essentially creating a duopoly for the new large civil aircraft market. The recession severely affected the demand for new aircraft and this led to even sharper competition. Airbus Industries had forward orders for 644 aircraft at the end of 2010, with over 500 delivered in the same period. The manufacturing locations are: United Kingdom – two wing and pylon assembly centres located in Broughton and Filton France – the structures for the wing box are produced in Nantes Spain – the empennage and composite materials are manufactured in Getafe and Illescas Germany – the final assembly plant is located in Hamburg. The order backlog and lead times to manufacture have protected manufacturing output as measured by reported deliveries, which maintained an annual average growth rate of 4% over the period 2006 to 2010. The rate of delivery increases did slow from 6.6% in 2008 to 3.1% and 2.4% in 2009 and 2010 respectively. Coatings and livery are applied at the final assembly plant in Germany. Air France Industrie and SabenaSource: SpeedNews Technics are the two main approved MRO applicators. Interior coatings are mainly supplied by Mankiewicz. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 9-30
  • 34. Transport Aircraft Markets New aircraft production generates an estimated coatings demand of over • million litres (>•••• tonnes) per year. The largest segment of the OEM Aircraft Coatings market is civil aircraft, represented by Airbus and Boeing, generating demand for over •.• million litres (>•,••• tonnes) per year. Estimated coatings demand... The sheer volume of smaller aircraft in the general aviation segment generates significant demand for Aircraft •.• million litres with a value of Coatings, which peaked at just over •.• million litres (•,••• tonnes) in 2008 before the recession resulted in a around €70 million sharp decline in production output and associated coatings consumption, which fell to just under •••,••• litres (•••• tonnes) in 2009. The majority of this was within the North American market, which in 2009 represented almost 60% of all turboprop and piston general aviation aircraft manufactured worldwide and almost 50% of total business jet output. World Consumption of Coatings for Aircraft by Segment 2005 – 2009 (000 litres) 2005 2006 2007 2008 2009 Civil Aircraft • ••• • ••• • ••• • ••• • ••• General Aviation Aircraft ••• ••• • ••• • ••• ••• Rotorcraft ••• ••• ••• ••• ••• Others ••• ••• ••• ••• ••• Maintenance, Repair and Overhaul (MRO) • ••• • ••• • ••• • ••• • ••• Total • ••• • ••• • ••• • ••• • ••• Although using less coatings per aircraft than OEMs, the sheer volume of operational fleets and repaint frequencies results in the majority of coatings demand being for MRO operations. The fastest growing markets for MRO activities are in Asia Pacific (where Singapore is the established hub), the Middle East and South America. The recession resulted in consolidation in the airline industry. As some operators merged, a number of aircraft in the combined fleets required new paint schemes to reflect the new brand. This helped to reduce the impact on MRO coatings demand. Airline operators also use their fleet branding to gain an advantage in an increasingly competitive environment and to create consumer “trust” in the airline, which creates further demand for Aircraft Coatings. Although OEM coatings are typicaly applied during final assembly, the application of coatings to airframes and structural components can take place at paint shops throughout the supply chain, making it difficult to provide market details at the country level within the scope of this study. Regional demand is discussed. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 9-40
  • 35. Scope and Samples Marine Chapter Contents10. Transport — Marine 1 Executive Summary 4 Markets 2 Introduction 4.1 Global Market Drivers and Trends A The Global Fleet 2.1 Market Definition B Shipbuilding 2.2 Macro Drivers C Ship Repair and Maintenance D Seaborne Trade 2.3 Impact of the Economic Downturn E The Global Supply Chain 3 Technology F Ship Construction Finance 3.1 Deep Sea and Coastal 4.2 Global Market Size and Growth A Shop Primers 4.3 Market Segmentation: Size, Drivers and Key B Antifouling Coatings Features C Cargo Hold Coatings A Deep Sea D Tank Coatings B Coastal E Topside and External Superstructure C Offshore Supply Vessels F Ship Interiors and Engine Room D Leisure Craft: Yachts and Super-Yachts 3.2 Yachts and Super-Yachts E Containers A Yachts 4.4 Suppliers and Global Position B Super-Yachts 5 Outlook 3.3 Containers 5.1 Forecast Commentary 3.4 Standards and New Developments 5.2 Forecast Data 6 Glossary 7 Terms and Conditions Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-34
  • 36. Transport Marine Coatings Introduction 2.2 Macro DriversThe Relative Economics of Shipbuilding to Ship Repair The major demand driver of the marine industry is the level of economic activity and global trade in commodities and raw materials. Seaborne trade is closely linked to Gross Domestic Product (GDP) where the percentage increase is generally a multiple of 2.5 to 2.7 of GDP growth.Shipbuilding The major supply drivers of the industry are: The capacity of shipbuilding yards, as the time to construct a vessel means that supply is unable to react quickly to demand The cost of construction where higher raw material inputs will reduce demand due to higher vessel prices Access to vessel financing, the economic life of vessels. The more complex the vessel, the less sensitive the market is to labour cost. In 2006 the global shipbuilding industry was operating at full capacity with most yards sold out until at least 2009. The market growth in 2006 to mid 2008 was due to: huge demand for freight capacity driven by China, low financing costs and investors reacting to market trends. The principal drivers for 2010 onwards for shipbuilding are:Ship Repair An increase of consumer confidence in Europe and North America, Chinese demand for imports of raw materials and exports of consumer goods Increase of demand within the Chinese domestic market. The 12th Chinese Annual Plan for 2011 to 2014 is forecasting approximately 8% GDP growth Increased availability of funds for investment in new vessels, which can then be built at a profit. Ship repair activity depends on: The level of shipping activity. One consequence of the crisis has been the extension of maintenance intervals The emergence of lower cost repair yards and availability of skills The number of retired vessels. Ships that have been taken out of service will either be scrapped or put back into service. Those returning to service will require overhaul, including complete replacement of the antifouling coating. Global Industrial Coatings Markets 2010 – 2020 © PRA 2010 Page 10-7
  • 37. Transport Marine Coatings Markets 4.2 Global Market Size and GrowthGlobal Consumption of Marine Coatings (2009) Coatings Demand by Region and Activity The shipbuilding industry has seen a dramatic decline of order intake in 2009 as new orders placed fell from approximately 170 million GT in 2007 to just over 86 million GT in 2008 and 18 million GT in 2009. However, due to the average time taken to build a new vessel the demand for marine coatings has been protected from the full effects of the recession and there was an estimated 6% growth in new build coatings demand in 2009. In addition, demand for coatings from commercial shipbuilding experienced a surge in 2007 due to the impact of regulations for ballast tank coatings. This resulted in the approximate split of 1:1 between shipbuilding to maintenance, repair and overhaul (MRO) shifting to approximately 2:1. Global commercial shipbuilding coatings demand experienced a compound annual growth rate (CAGR) of 14% with an estimated consumption of over ••• million litres (•••,000 tonnes) in 2009. It should be noted that we have expanded our fleet analysis from commercial vessels of over 100,000 GT in the previous study to vessels of over 2,000 GT to provide a more comprehensive review of coatings demand. This results in an upward revision on trend data of around ••• million litres. The revised figures for 2005 and 2006 are included below. The Global Market for Commercial New-Build Marine Coatings (000 litres) 2005-2009 2005 2006 2007 2008 2009 Europe & MEA •• ••• •• ••• •• ••• •• ••• •• ••• Americas •• ••• •• ••• •• ••• •• ••• •• ••• Asia Pacific ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Rest of World •• ••• •• ••• •• ••• •• ••• •• ••• Total Commercial Coatings ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• % change •• •• •• •• Global Industrial Coatings Markets 2010 – 2020 © PRA 2010 Page 10-58
  • 38. Transport Marine Coatings Markets E ContainersContainer Output In 2006, the global production of containers was 3 million TEU and 185,000 reefer containers. China produced000 TEU about 90% of the world’s containers but relied on imports for more than half of the steel plate (of less than two millimetres thick) used. The production of containers increased significantly in 2007 reflecting the boom in exports from China. In 2008 the impact of the recession resulted in significant cost cutting measures. The reduction in seaborne trade in 2009 negatively impacted on container demand as containership operators adopted conservative ordering strategies. Although China remained the major producer of new containers, a number of factories were closed. This resulted in a considerable fall in output down 36% in 2008 and a further 89% in 2009. Total coatings demand in this segment (including demand from both new build and refurbishment activity) is estimated to be around •.• million litres (••,000 tonnes) of marine coatings, representing a fall of 40% CAGR over the period 2005-2009. Estimated Coatings Demand for Containers 2005-2009 2005 2006 2007 2008 2009 Litres (000) ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Tonnes ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• % change •• •• •• •• As operators divested idle containers in 2009 for recycling, the growth in seaborne trade and signs of recovery in 2010 led to container shortages. This has led to an upsurge in container demand and associated coatings demand of over ••% year-on-year from 2009 to 2010 We expect this to decelerate in 2011 and, taking into account new containerships coming online in 2013-2014, expected rates of global GDP growth and aggregated analyst forecasts, we expect container output to return to peak levels around 2015. Global Industrial Coatings Markets 2010 – 2020 © PRA 2010 Page 10-72
  • 39. Scope and Samples Protective Coatings Chapter Contents11. Construction & Infrastructure — Protective Coatings 1 Executive Summary 3 Technology 4 Markets 2 Introduction 3.1 Steel Protection 4.1 Global Market Drivers and Trends A Prefabrication or Shop Primers A Infrastructure 2.1 Market Definition B Primer Coatings B Oil and Gas 2.2 Macro Drivers C Intermediate Coatings C Petrochemicals and Refining D Top Coats D Industrial and Other Processing 2.3 Impact of Economic Downturn A Government Funding 3.2 Concrete Protection 4.2 Global Market Size and Growth B Oil and Commodity Prices A Coating Types 4.3 Market Segmentation: Size, Drivers and Key 3.3 Coatings Technology by Application Features A Bridges A Transportation and Coastal Infrastructure B Water Treatment B Water and Wastewater Treatment C Power Stations (excluding Wind Turbines) Infrastructure D Wind Turbines C Public Power Generation and Transmission E Oil Refineries and Chemical plants Infrastructure F Offshore Oil and Gas D Oil Refineries, Petrochemical Plants and Storage G Pipelines E Oil and Gas Exploration and Production H Food Processing F Manufacturing and Other Processing I Mining G Intumescent Coatings J Pulp and Paper 4.4 Suppliers and Global Position 3.4 Standards and Developments 5 Outlook A Standards and Regulations B New Developments 5.1 Forecast Commentary 5.2 Forecast Data 6 Glossary 7 Terms and Conditions Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-38
  • 40. Construction and Infrastructure Protective Coatings TechnologyEstimated Share of Generic Coatings Systems Applied to 3.3 Coatings Technology by ApplicationSteel for Bridges A Bridges The principle factors that determine the level of corrosion risk are: Exposure to moisture: the level of corrosion risk will depend heavily on the local microclimate due to winds and weather conditions Exposure to a marine environment: based on the distance from the sea and on the microclimate Expose to salt: used in de-icing chemicals Airborne industrial pollution: older bridges may be at risk having been built at a time when the level of air quality was much less than it is today. Air quality still presents a serious problem in countries such as Russia, China and India The rate of corrosion can be assessed using ISO 9223 and the overall environment using ISO 12944. The choice of coating will depend on whether it is for a new build or for maintenance.Estimated Share of Generic Coatings Systems Applied toConcrete for Bridges New Build Coatings The selection of coating system for a new bridge is defined by the local specifications and regional environment. It is possible to make some generalisations. The time to first maintenance of a newly applied coating is now between 20 and 25 years. A general system used for the Protective Coating is: Primer Intermediate coat Top coat Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 11-31
  • 41. Construction and Infrastructure Protective Coatings Markets Despite maturing shallow water areas, Gulf of Mexico oil production is projected to reach 1.8 million bpd by 2013, with growth resulting from successful exploration and development of reserves in the deeper. Deepwater production now accounts for 70% of all Gulf of Mexico oil production and 36% of gas production. Whilst the deep and ultra-deep water production is more expensive and risky, requiring floating platforms, the Gulf of Mexico is a well-established area with a large number of shallow fields requiring platforms that are fixed o the seabed. The EIA projects that US crude production volumes will increase to 2035. The majority is expected to come from deepwater offshore fields. A number of fields, such as Great White, Norman, Tahiti, Gomez, Cascade, and Chinook, either started producing in 2009 or are expected to start producing in the next few years. Most are in the Central Gulf of Mexico. Mexico is the second area after the North Sea where oil production is projected to decline by 2035. According to EIA, oil production in Mexico including offshore (80%) and onshore (20%) is expected to decline to approximately 1.4 million barrels per day by 2025. Most of Mexico’s oil production occurs in the Gulf of Campeche, located off the south-eastern coast of the country. The two main production centres in the area include Cantarell and Ku-Maloob-Zaap (KMZ), with smaller volumes also coming from the fields off the coast of Tabasco state. In 2009 Cantarell and KMZ © Laoma | Dreamstime.com represented 57% of Mexico’s total crude oil production. Mexico has 222 fixed structures with an order book showing an additional 19 units.Leading Operators in North America Mexican laws restrict foreign ownership of hydrocarbon resources and its resource policies have kept back► Shell Offshore overseas and domestic investment which results in production levels slowing down. It is assumed that these political barriers will not exist after 2015.► Anadarko Petroleum Corporation PEMEX is a state-owned company and is the only petroleum operator in Mexico, holding a monopolistic► Chevron Corporation position on natural gas exploration and production in the country. It is one of the largest oil and natural gas► ATP Oil & Gas Corporation companies in the world.► Eni SPA Canada has three oil projects off its Atlantic coastline, all located in the Jeanne d’Arc Basin. The basin has seen an► Marathon Oil Corporation increase in investment in recent years, with both White Rose and Hibernia announcing plans to expand production by incorporating satellite fields. Outside of the Jeanne d’Arc Basin, StatoilHydro announced in 2009► Noble Energy Inc. that it had discovered commercial quantities of crude oil at its Mizzen field in the Flemish Pass basin. In 2009,► Statoil ExxonMobil submitted its proposed Hebron project for regulatory approval, which could come on stream as soon as 2017 and reach a peak production rate of 176,000 bbl/d. Operators at the Atlantic oil fields must contend with harsh natural conditions, including rough seas, seasonal icebergs, and extreme temperatures. These factors will require the application of high performance protective coatings with long life expectancy. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 11-97
  • 42. Construction and Infrastructure Protective Coatings Markets D Oil Refineries, Petrochemical Plants and StorageRegional Share of Protective Coatings for Oil Representing around 20% of overall protective coatings consumption, Oil Refineries, Petrochemical Plants andRefineries, Petrochemical Plants and Storage Storage is the largest single industrial category. The coatings used to protect oil refineries and chemical plants are applied to storage tanks, containment areas, process units, and structural steel, high temperature areas (reactors, process plant and chimneys), pipelines, power generation plant and onsite water treatment facilities. The most significant areas to be coated in a refinery are the storage tanks; tank capacity is directly proportional to the processing capacity of the facility and coatings demand has been estimated based mainly on plant output as an indicator of size. The economic crisis had little effect on the demand for protective coatings in this industry segment as assets need to be maintained irrespective of volume throughput due to the harsh operating conditions and the industry health and safety regime. All companies have established maintenance schedules (including defined painting intervals) that results in a stable demand profile. Over the period 2006-2009, protective coatings consumption had 2% CAGR. This resulted in an estimated market of almost ••• million litres (•••,000 tonnes) in 2009 with an associated value of €••• million and At 20% of overall protective representing growth of almost 1.9% on the previous year. coatings consumption, Oil Refineries, Petrochemical Plants Protective Coatings Demand for Oil Refineries, Petrochemical Plant and Storage (2005-2009) and Storage is the largest single 2005 2006 2007 2008 2009 industrial category ... with an Litres (million) ••• ••• ••• ••• ••• associated value of €••• million. Tonnes (000) ••• ••• ••• ••• ••• % Change •.• •.• •.• •.• There have been only minor additions to refining capacity during the review period. The exception is China (from 7 million barrels per day to 8.6 million) and India (from 2.9 million to 3.8 million) contributing to strong regional growth that resulted in Asia Pacific taking 29% of protective coatings in volume terms. Only North America has a larger share with 30% of the market volume in 2009. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 11-127
  • 43. Scope and Samples Pages from Global Industrial Coatings Markets 2006 – 202012. Construction & Infrastructure — Industrial Wood CoatingsThe market for Industrial Wood is defined as furniture, joinery (millwork) and flooring. Thefocus of this chapter is on factory coated wooden products, both for commercial andhousehold use. It does not include wooden garden furniture, fencing and decking, which areregarded as decorative or architectural applications.A detailed break-down of end-user markets is presented by segment, before consideringcoatings demand. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-42
  • 44. Scope and Samples Agriculture, Construction and Earthmoving Chapter Contents13. Construction & Infrastructure — Agriculture, Construction and Earthmoving 1 Executive Summary 4 Markets 2 Introduction 4.1 Global Market Drivers and Trends A Agriculture Trends 2.1 Market Definition B Construction Trends 2.2 Macro Drivers 4.2 Global Market Size and Growth 2.3 Impact of Economic Downturn 4.3 Agriculture Equipment 3 Technology A Market Drivers B Market Dynamics, Size and Growth 3.1 Current Technology 4.4 Construction, Earthmoving and Mining Equipment 3.2 Technology Systems A Market Drivers A Solventborne and Waterborne Liquid B Market Dynamics, Size and Growth Coatings B Powder Coatings 4.5 Materials Handling Equipment C Electrocoat A Market Drivers D Pigments B Market Dynamics, Size and Growth 3.3 Coatings Technology by Application 4.6 Suppliers Global Position A Agricultural Equipment B Construction, Earthmoving and Mining 5 Outlook Equipment 5.1 Forecast Commentary C Materials Handling Equipment 5.2 Forecast Data D Repair and Maintenance 3.4 General Technology Trends 6 Glossary 3.5 Regulations and Developments 7 Terms and Conditions Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-43
  • 45. Construction & Infrastructure Agriculture, Construction and Earthmoving Technology B Construction, Earthmoving and Mining EquipmentTechnology Use in Coatings for Construction, Construction equipment can be broadly classified as:Earthmoving and Mining Equipment: World 1. Heavy and medium equipment: large capital items 2. Light equipment: smaller machinery items, trucks and tooling manufactured by small specialist companies Light equipment is often used in conjunction with the heavier capital equipment and operating environments result in similar coatings requirements for both. The surface finish quality must be excellent as the equipment is exposed to demanding operating conditions. The components that need to be coated range from large forged steel components to metal sheet and small plastic parts. It can be an expensive and time consuming process to get a coating system approved by OEMs. The items coated include: The chassis Engine Cabin Wheels or track Other parts: including the excavator arms and bulldozer blades etc.Technology Use in Coatings for Construction, Technology Use in Coatigns for Construction Equipment Coatings Technology by RegionEarthmoving and Mining Equipment: Regional Solventborne Waterborne Powder coating E-coat Europe and Middle East Africa 70 8 14 9 North America 62 10 18 10 South America 85 0 10 5 Asia Pacific 80 0 10 10 Construction equipment can be used in a wide range of climatic conditions, from the high temperatures of the deserts of the Middle East to the low temperatures in northern Canada or Siberia. Each OEM has its own performance specifications against which coatings must be approved. The coatings must be capable of meeting these specifications over the full range of working environments. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 13-18
  • 46. Construction & Infrastructure Agriculture, Construction and Earthmoving Markets A Agriculture Trends Environment and Climate The regional climate is a major determinant of agricultural output and crop yields are heavily influenced by variations in the weather. This has created a cyclical demand for related equipment; April to July is the principalWorld Food Prices period for agricultural output in the Northern Hemisphere and September to January in the Southern(Index, 2002-04 = 100) Hemisphere. Consequently, the peak selling season for agricultural equipment in the Northern Hemisphere, for example, is March to June and to ensure stock availability, dealers place their orders during the autumn and winter months. The impact of adverse weather patterns on agricultural output is well recognised. Recent adverse impacts, such as droughts, have been attributed to climatic change. These impacts are expected to become more prominent. As weather patterns become less predictable, crop yields fall placing pressure on farming industries. To counter the effects of regional weather cycles on demand for agricultural equipment, suppliers have established global supply markets. Localised manufacturing operations have been established to meet the local requirements for specialist equipment. Food Production and Prices Farming is a cyclical industry but a combination of factors has resulted in dramatic variances in recent years leading to volatility in both farm input and output prices. The markets for grain, for example, experienced poor global harvests in 2007 leading to low stocks, which in turn pushed up prices. The 2008 global harvest was much better and so prices fell accordingly. In 2006, prices of the world’s most popular food staples including wheat, corn, soya and rice began rising. In 2007 and 2008 world food prices experienced a dramatic increase, especially cereals, oils and dairy products.Source: FAO The United Nation’s Food and Agriculture Organisation (FAO) reported 56% increase in the world food price index from 2006 to 2008. The factors that contribute to price volatility include: Droughts, which negatively affected grain producing nations Falling world food stockpiles and grain reserves Rising oil prices Increased planting of crops for bio fuels Changing diet and strong rise of per capita meat consumption in developing countries. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 13-28
  • 47. Construction & Infrastructure Agriculture, Construction and Earthmoving MarketsConstruction Output Growth for Key Asia Pacific Construction in Asia PacificMarkets 2005–2010 The Asia Pacific region performed strongest with an average annual growth rate of between 9% and 10% during the global recession. China and India showed the highest growth rate over the period 2005 to 2009. China has replaced Japan as the second largest construction market in the world and is expected to outpace the US around 2016 to become the world’s leading construction market. Total construction output is expected to remain relatively high, although growth will slow in the next two years to approximately 7% or 8% per year. Whilst the housing price level in China has not reached that of the US and UK, the trend is upward and houses have become less affordable. The Chinese government’s ambitious plans to build 36 million affordable homes over 2011to 2015 with €128.7 billion (1.3 trillion Yuan) allocated in 2011 could face financial challenges. The Chinese government requires builders to keep residential construction costs low. However, the rise in commodity and raw material prices, particularly steel, is likely to affect construction prices. The construction industry in India has been growing with an average growth rate of 9% to11% year-on-year and represents between 6% and 8% of the country’s GDP. Construction activity is stimulated by the government’s decision to let 100% Foreign Direct Investment (FDI) into the country’s property market. Construction Output Growth for Key Asia Pacific Markets 2005–2010 2005 2006 2007 2008 2009 2010 China 16.0 17.2 16.2 9.5 18.6 17.5 India 12.9 11.4 11.0 4.7 7.6 10.3 Japan 0.5 -0.1 -6.0 -8.1 -5.2 -6.9 Indonesia 7.5 8.3 8.6 7.4 7.0 6.7 Malaysia -1.5 -0.3 7.3 4.2 5.7 5.9 Philippines -5.8 9.9 20.0 8.0 9.4 9.4 Singapore 0.7 2.5 16.7 20.1 16.2 8.2 South Korea -0.3 2.2 2.6 -2.5 1.9 -0.4 Vietnam 10.9 11.0 12.2 -0.4 11.4 10.1 Australia 6.6 6.7 6.4 5.7 -2.4 5.2 Source: OEF Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 13-36
  • 48. Scope and Samples Pages from Global Industrial Coatings Markets 2006 – 202014. Construction & Infrastructure — Pre-coated Metal SheetIn the previous study, Global Industrial Coatings Markets 2006-2020, Chapter 14 includedcoatings for aluminium extrusions. These are now included in Chapter 16, General IndustrialCoatings, and this chapter focuses on coil coating of steel and aluminium sheet.The principal applications for pre-coated sheet (coil) are discussed, along with coatingstechnologies. Although coil is an intermediate process rather than an end market, it is animportant market for coatings. The chapter also provides information relating to theunderpinning metals markets. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-47
  • 49. Scope and Samples Pages from Global Industrial Coatings Markets 2006 – 202015. Packaging & General Industrial — Metal Packaging CoatingsThis chapter covers drinks cans, food cans, jar lids, bottle caps and aerosol cans used forpersonal care and household cleaners. It also includes collapsible toothpaste tubes and drumsand cans used for industrial products and paint.The underlying steel and aluminium market levels are considered, and industry trends in thefood and drink industry, a major demand driver, are presented. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-48
  • 50. Scope and Samples General Industrial Coatings Chapter Contents16. Packaging & General Industrial — General Industrial Coatings 1 Executive Summary 4 Markets 4.8 Heating, Ventilation and Air Conditioning 4.1 Global Market Drivers and Trends A Segment Definition 2 Introduction B Market Drivers A Economic Trends 2.1 Market Definition C Market Dynamics, Size and Growth B Consumer Activity 2.2 Macro Drivers C Industrial Activity 4.9 Bicycles 2.3 Impact of Economic Downturn 4.2 Global Market Size and Growth A Segment Definition B Market Drivers 3 Technology 4.3 Aluminium Extrusions C Market Dynamics, Size and Growth A Segment Definition 3.1 Current Technology 4.10 Market Segmentation: Other Consumer Products B Market Drivers 3.2 Technology Systems C Market Dynamics, Size and Growth 5 Suppliers A Waterborne and Solventborne 4.4 Metal Furniture, Fixtures and Fittings 5.1 Suppliers Global Position B Powder Coatings A Segment Definition A Europe, Middle East and Africa C Electrocoat B Market Drivers B The Americas 3.3 Coatings Technology by Application C Market Dynamics, Size and Growth C Asia Pacific A Aluminium Extrusions 4.5 Automotive Components D Job or Trade Coaters B Metal Furniture, Fixtures and Fittings A Segment Definition 6 Outlook C Automotive Components B Market Drivers D Specialist Machinery Markets 6.1 Forecast Commentary C Market Dynamics, Size and Growth E Appliances F Heating, Ventilation and Air Conditioning 4.6 Specialist Machinery 6.2 Forecast Data G Other Consumer Products A Segment Definition 7 Glossary H Job or Trade Coaters B Market Drivers 3.4 General Technology Trends C Market Dynamics, Size and Growth 8 Terms and Conditions 4.7 Domestic Appliances A Segment Definition B Market Drivers C Market Dynamics, Size and Growth Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-49
  • 51. Packaging & General Industrial General Industrial Coatings Technology B Powder CoatingsApplications for Powder Coatings Thermoset powder coating is a major global technology for the industrial coating of a wide variety of components. Approximately 90% of powder coatings are used within the General Industrial metal coating sector, with the remaining 10% being used in sectors such as Protective, ACE, Motorcycles, Auto OEM and Industrial Wood (all these markets are covered in separate chapters). Powder coatings used for General Industrial metal applications represent around 30% of the total coating demand. The main end applications for powder coatings in the General Industrial metal sector are: Metal Furniture and Fixtures Appliances Automotive Components. The principal resin systems used are: Polyester Polyester powder coatings are the most common and versatile chemistry used in powder coatings. They can beComparative Properties of Polyester Exterior Grades formulated for indoor or outdoor applications. Hybrid: carboxy functional polyester cross-linked with 30–50% epoxy. Used for indoor applications such as appliances, metal furniture etc. Polyester, exterior grades: carboxy functional resins cross linked with a hardener such as TGIC (triglycidyl isocyanurate ) or HAA (ß-hydroxyalkylamides) for powders with good exterior durability. TGIC is used in most regions except Europe where the requirement to label the boxes of powder as being toxic has led to HAA being the main hardener used in this region. Hardeners based on terephthalic acid diglycidyl ester with trimellitic acid triglycidyl ester (Araldites PT910 & 912) are also used in Europe. The hardeners are less reactive than either TGIC or HAA and are mainly used in powder coatings for special applications, such as anti-gassing coatings for galvanised steel. The comparative properties of the three systems are summarised in the figure (left). Polyester, Super-durable: Standard exterior polyester powder coatings, when tested for two years exposure in Florida, lose 50% of their gloss and thereby fail to meet the higher American standard of architectural specifications, which requires five years’ exposure in Florida for AAMA 2604 and 10 years for AAMA 2605. The development by the powder coating industry of super durable coatings has resulted in polyester powder coatings that meet the 5 year Florida exposure test for AAMA 2604. The super durable Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 16-14
  • 52. Packaging & General Industrial General Industrial Coatings Markets C Market Dynamics, Size and GrowthShares of Global Appliance Coatings Demand byRegion 2009 The market is characterised by the presence of a few multinational conglomerates with extensive product ranges. The correlation between the sales of appliances and macro-economic trends resulted in contractions in market demand in 2008 and 2009. Production output is estimated to be over 480 million units in 2010, reflecting signs of recovery and slight growth on the previous year, when output was around 475 million units. Europe and the US are the main manufacturing locations for appliances, but there has been a shift towards relocating manufacturing operations to Asia Pacific, which has contributed to stronger coatings consumption in that region. Coatings demand associated with the production of appliances generated a total demand of around •• million litres (••,000 tonnes) in 2009. After strong growth in 2006 the market slowed in 2007 and declined in 2008 as a result of the recession. Continued growth in Asia Pacific resulted in overall growth of 0.6% in 2009. Industrial Coatings Demand for Appliances by Region 2005-2009 (000 litres) 2005 2006 2007 2008 2009 Europe & MEA •• ••• •• ••• •• ••• •• ••• •• ••• Americas •• ••• •• ••• •• ••• •• ••• •• ••• Asia Pacific •• ••• •• ••• •• ••• •• ••• •• ••• Total •• ••• •• ••• •• ••• •• ••• •• ••• % Change •.• •.• •.• •.• Companies in the United States and Manufacturing companies in the United States and Europe are expected to remain the leaders due to their Europe are expected to remain the technical expertise but production is expected to continue shifting towards Asia Pacific. This has traditionally been leaders ... but production is due to lower labour costs; the relative advantages are likely to be reduced as China labour rates increase, but expected to continue shifting there are still advantages to having local manufacturing in order to increase market penetration into the potentially large markets within Asia Pacific. towards Asia Pacific Leading suppliers of household appliances to Asian markets (Daewoo, Matsushita, Samsung and LG Group) are already facing increasing competition from western producers aggressively targeting the region by establishing subsidiaries, forming joint ventures, and acquiring or merging with local companies. This should result in a reduction in imports for appliances into the key Asia Pacific markets but drive further demand for coatings. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 16-85
  • 53. Packaging & General Industrial General Industrial Coatings Outlook 6.2 Forecast DataForecast Coatings Demand By Region Forecast General Industrial Coatings Demand 2010-2020 (000 litres)(million tonnes) 2010 2011 2012 2013 2014 2015 2020 Aluminium Extrusions ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Metal Furniture ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Auto Components ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Specialist Machinery ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Domestic Appliances ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• HVAC ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Bicycles ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Other ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Total • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• Forecast General Industrial Coatings Demand by Region 2010-2020 (000 litres) 2010 2011 2012 2013 2014 2015 2020 Europe & MEA ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Americas ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Asia Pacific • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• • ••• ••• Forecast General Industrial Coatings Demand by Technology 2010-2020 (000 litres) 2010 2011 2012 2013 2014 2015 2020 Powder ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Solventborne ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Waterborne ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• • ••• ••• Electrocoat ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• ••• Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 16-116
  • 54. Scope and Samples Pages from Global Industrial Coatings Markets 2006 – 202017. Packaging & General Industrial — Plastic CoatingsThis new chapter, introduced in response to feedback from subscribers to the GlobalIndustrial Coatings Markets 2006-2020, covers Plastic Coatings used in consumer electronics,flooring products and packaging. For completeness, plastic components used in the transportindustries are also discussed.By separating this important sector from General Industrial, we are able to explore theimportant country markets in greater detail, and provide a more detailed view of coatingsconsumption.The example pages presented are taken from the original Chapter 16, General IndustrialCoatings. Global Industrial Coatings Markets 2010 – 2020 © PRA 2011 Page 0-53