Environmental legislation is having an impact on the industrial coatings market.

Photo courtesy of AkzoNobel

The industrial coatings market is sizable, especially considering the range of segments, including wood coatings, coil, packaging and much more. Estimates place the market at $100 billion annually, and it is growing.

Jim Kavanagh, managing director of AkzoNobel’s Industrial Coatings business, said that within the industrial coatings market, the coil and packaging segments improved after a tough first half of 2023, while the market for wood coatings remained depressed.

“The wood coatings market in particular was impacted by lower activity in residential housing in North America and Europe,” Kavanagh said. “The coil coatings market rebounded in Europe after energy prices stabilized, while China returned to growth, driven by market activity and market share gains. In packaging coatings, the impact of destocking was largely contained to the first half of the year, with sequentially improving volumes during the full-year, indicating a normalization in customer inventories.”

Rasmus Vestergaard, head of marketing communications at Hempel A/S, said that between 2022 and 2023, the global general coatings market remained rather flat in terms of volume.

“The market value of the coatings market increased slightly by 3%. For industrial coatings (defined as general coatings market excluding marine and decorative,) the market value increased by 3% as well,” Vestergaard added.

M？der Group CEO Julien Molina noted that once again, 2023 was a complex year for industrial paint markets.

“Like other industries, it was impacted by the economic and geopolitical situation,” Molina observed. “The scarcity of raw materials and their inherent price hikes, unprecedented rises in energy costs and interest rates, and inflation in general have weighed on our businesses. Nevertheless, against this difficult backdrop, our performance was positive compared with previous years, and we were able to win market share especially on our core businesses and strategic segments thanks to the commitment of our teams and a stronger sales drive.

“Moreover, the year 2023 once again demonstrated the urgent need to transform our business model, a transformation to which the M？der Group has been resolutely committed for several years in particular in focusing our innovation forces on measuring and improving our impacts on health and environment through solutions geared to the constant search for efficiency and decarbonization,” Molina added. “These major concerns have always been part of our DNA, but today we sense a clear acceleration in the markets’ desire to be part of a more reasonable and sustainable industry.”

Key Growth Markets

There are sectors within industrial coatings that are doing particularly well. Kavanagh noted that the packaging sector is experiencing strong growth worldwide, and additionally, the coil industry is witnessing expansion, particularly in the Asia Pacific region.

“Industrial coatings markets exhibit conservative growth rates overall, with the strongest growth observed in the global beverage packaging sector,” Kavanagh said. “This growth is driven by a preference for sustainable and recyclable packaging material.”

Molina pointed to mobility markets, in particular automotive and rail, as markets where M？der Group has a very significant market share in Europe.

“Growth in these markets was driven by the development of new projects, after some difficult years, but also by new challenges and the need to move towards more environmentally-friendly solutions,” Molina reported. “Electrification and energy transition trends have also driven these markets. On the other hand, general industrial markets suffered, particularly in Germany, due to an overall slowdown in industrial activity. Similarly, the coil coating market suffered from the sharp slowdown in new building projects.”

Molina added that in recent years, M？der Group has seen a geographical shift in industrial markets.

“In Europe, historically strong industrial zones are moving towards Eastern Europe in particular, to the detriment of German industry for example,” Molina said. “Similarly, in Asia, markets are increasingly shifting from China to India, and emerging countries are gaining in strength. What’s more, we’re beginning to see a number of projects initially based in China being relocated to Europe, and Eastern Europe in particular.”

Vestergaard said that some of the strongest growth markets for coatings in general include marine (10-11%), auto OEM (11%) – especially in China and aerospace (10%).

“The fastest growing areas within coatings overall (value market size) are Middle East (6%), Latin America (5%), Africa (5%) and Asia (3%),” said Vestergaard. “However, Asia is the largest region for coatings, representing roughly 50% of the total coatings market.”

Looking for Improved Performance

Industrial paint executives note that customers are looking for improved performance from their industrial coatings.

“At Hempel, our customers across a variety of industries are looking for a wide range of functional benefits of our high-performance coating solutions, including resistance to corrosion, abrasion, impact and humidity; improved energy efficiency; protection from environmental elements; increased resilience; passive fire protection; thermal insulation and energy conservation, among many more,” Vestergaard said.

Molina said that markets continue, as in the past, to demand safe, robust and competitive products, but today demands are also shifting to other trends.

“Efficiency and energy consumption gains, waste management and the fine-tuning of carbon footprints and product life cycle analysis are becoming clearly identified challenges,” Molina said. “First of all, markets are increasingly moving towards products that are cleaner for the environment. In this context, measuring and participating in the overall reduction of the carbon footprint of our entire ecosystem is a central focus. Our research efforts are therefore focused on replacing the most polluting raw materials with those that have a lesser impact on our carbon footprint and the environment. The required systems need also to be cleaner for humans. Therefore, the substitution of sensitive molecules remains a priority.

“The other trend we are seeing in the market is a demand for greater efficiency in our customers’ processes,” added Molina. “Reducing the drying time of the coating, the number of layers and the process time are important customer requirements. This search for efficiency also includes the proposal of full paint systems, but also paints and composites, which represents a very strong element of differentiation for M？der on its markets.”

Kavanagh said that AkzoNobel’s customers want consistently high-quality products that allow for innovation. They value sustainable offerings, technical expertise and outstanding service, all of which contribute to their business success.

“Building and construction customers prioritize long-lasting installations that maintain their appearance over time,” Kavanagh noted. “To achieve this, they opt for coatings that offer both durability and weather resistance. In addition, they’re looking for coatings with functional and aesthetic features that set their products apart and ultimately protect their reputations. In packaging, our customers have different needs and demands, from trusted epoxy coatings to high-performance bisphenol-free coatings.”

Kavanagh pointed out that in the wood market, customers have three key focus areas: added value to the end consumer, such as improved aesthetics as well as stain and scratch resistance; reduction in their total cost of ownership; and long durability of exterior products to reduce maintenance needs.

Environmental Issues

Environmental legislation is having an impact on the industrial coatings market, and coating executives noted some of these trends, such as a move from solvent-based coatings to using more water-based coatings or energy-curable coatings.

Kavanagh said that environmental legislation has significantly influenced the industrial coatings market, and as a result, there has been a notable shift away from solvent-based coatings toward more sustainable alternatives. According to Kavanagh, these include water-based coatings, acrylic and alkyd.

“Due to regulations and growing environmental awareness, many manufacturers and customers now prefer water-based coatings,” said Kavanagh. “These formulations have lower volatile organic compound (VOC) emissions and are considered more sustainable.”

Kavanagh also pointed to energy-curable coatings.

“Another trend is the adoption of energy-curable coatings,” Kavanagh continued. “These coatings cure rapidly under ultraviolet (UV) or electron beam (EB) radiation, reducing the need for solvents and enhancing overall efficiency. In addition, this allows our customers to take advantage of grid decarbonization.”

Kavanagh noted that for metal can packaging, the industry continues to face challenges in 2024 and beyond, following the release of the highly anticipated draft that reflects the EU Commission’s legislative translation of the EFSA opinion (April 19, 2023) on the safe threshold of bisphenol A in food contact materials.

“However, we know we can move away from not only BPA, but all bisphenols for food and beverage contact materials,” Kavanagh reported. “Bisphenols – of any kind – are no longer required to create safe coatings for metal can packaging. As regulations tighten in the next year or two, manufacturers will need to make the transition. Can-makers will be working with their trusted coatings partners over the coming months to speed up migration towards a bisphenol-free world.”

“We have always seen regulatory changes as opportunities for development, not as constraints or even threats,” said Molina. “Again this year, some 100 of the raw materials we use were classified as CMR, requiring our R&D teams to work hard to replace them. On this point, our commitment is clear and uncompromising: to remove from our product portfolio all products that have an impact on human health.”

Molina noted that Mader Group has long been proposing solutions that are more respectful of people and the environment.

“For example, we were the first to offer a waterborne paint system in China, and we are working on high-solid content solutions,” Molina added. “Today, we sense a real willingness on the part of industrial markets to adopt these solutions, even in segments traditionally oriented towards solvent-based paints. The major players in industrial markets are committed to reducing their carbon footprint, and we are joining in this dynamic through the ranges we are developing.”

New Products

As a result, industrial coatings manufacturers are developing new products to help their customers meet their needs.
Kavanagh said that during 2023, AkzoNobel launched next-generation coatings technology which will help the beverage can industry move to products free from materials of concern.

“Our Packaging Coatings business launched the first two products in its new Accelstyle range,” said Kavanagh. “Designed for the exterior of conventional two-piece aluminum beverage cans, both are free from intentionally added bisphenols. They follow on from the May 2023 launch of Accelshield 700 – the first BPx-NI* (*free of intentionally added bisphenols) internal coating for beverage can ends – which complies with US Food and Drug Administration (FDA) and EU regulations. We’re also building a production plant in Spain at our Vilafranca site, which will produce the new coatings for the metal packaging industry in Europe, Middle East and Africa.”

“The product ranges we are currently developing and proposing to our customers are absolutely in line with the orientations we have just mentioned: reduced carbon footprint combined with increased efficiency, elimination of substances harmful to humans,” Molina said. “Our strategy of vertical integration by developing our own resins enables us to serve these new product ranges. In addition, the challenge of supporting our customers is clear: offering a comprehensive full system to meet all customer needs in its coatings and composites process.”

Vestergaard said that in response to the energy sector’s evolving needs and global sustainability goals, Hempel has launched innovative products to enhance energy asset durability, efficiency, and sustainability. These include:

• HEET Dynamic: In today’s fast-paced construction industry, adopting advanced technological solutions can significantly enhance both operational efficiency and safety standards. Hempel’s HEET Dynamic software is designed specifically for fire safety applications, streamlining the estimation process for intumescent coatings and incorporating seamless Building Information Modeling (BIM) integration.

• Hempablade Solution: Hempablade is a comprehensive blade coating system for wind turbine blades, featuring both overall blade protection and leading edge protection. It meets industry standards with benefits including reduced material use, minimized application time, and superior erosion protection against environmental elements.

• Hempaprime Strength 530: Designed for aggressive corrosive environments, Hempaprime Strength 530 extends offshore wind structure lifespans with robust corrosion resistance, particularly in splash zones.

• Hempatherm IC System: Hempatherm IC advances thermal insulation solutions, optimizing application time with the highest film build capability. It provides exceptional thermal insulation, energy conservation, and long-term protection against moisture ingress.

• Hempatop Repel 800: Hempatop Repel 800 offers advanced water-repellent properties to protect offshore assets, reducing maintenance costs and frequency while ensuring comprehensive environmental protection.