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Contents
Contents
Scope of the Study Structure of the Study Sample Pages Overview 1 Executive Summary 2 Economic Indicators 3 Regulations Transport 4 Automotive OEM 5 Automotive Refinish 6 Motorcycles 7 Trucks, Buses and Other Vehicles 8 Rail 9 Aircraft 10 Marine Coatings Construction & Infrastructure 11 Protective Coatings 12 Industrial Wood Coatings 13 Agriculture, Construction and Earthmoving 14 Pre-coated Metal Sheet Packaging & General Industrial 15 Metal Packaging Coatings 16 General Industrial Coatings 17 Coatings for Plastics
3 4 5 5 9 9 14 18 22 26 30 34 38 42 46 50 54 58 62 66
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The Global Industrial Coatings Markets 2006-2020 study provided a unique source of data and insights on this 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 prerecession market, trend data is provided for the period 2005 to 2009. To ensure consistency across chapters scheduled for later release, our forecast includes commentary on market developments for 2010 and beyond, accompanied by the latest available data. 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 annual projections of coatings demand for the next five years to complement our 2020 outlook. This makes the Global Industrial Coatings Markets 2010-2020 study our most ambitious and comprehensive industry review to date. It is an invaluable tool to improve understanding of the end-user coatings markets and to support strategic decision making.
Geographic Regions For the purposes of this study, unless otherwise stated, we have adopted the following geographic regions for reporting purposes:
Europe EU 27 plus Norway and Switzerland CIS & ROE Former Soviet Union and Rest of Europe 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
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Where appropriate the content of a chapter of the study follows a standard pattern.
1 Executive Summary Introduction Market Definition Macro Drivers Impact of Economic Downturn Technology Current Technology Technology Systems Markets Global Market Drivers and Trends Global Market Size and Growth Suppliers Suppliers Global Position Outlook Forecast Commentary Forecast Data Glossary Terms and Conditions Developments since 2009 and summaries of key trends expected to drive future coatings demand Comprehensive forecasts to 2020 by segment, technology and region. Definitions of terms used in the text. Who are the key suppliers, globally and regionally? A detailed review of important influencing factors and how they affect enduser markets. An overview of resulting coatings demand by region and segment. A detailed assessment of demand for coatings within each market segment. A review of the technologies used in this market. A description of the technology systems used, both established and novel. A section on each market segment with details of its specific technologies. A detailed description of how we have defined the market and its segments. The underlying factors that drive this coatings market. Highlights the most significant impacts of the global recession on this coatings market. A succinct overview of the market's definition, size, value, technologies and drivers. Forecasts to 2015 and the outlook to 2020 are included.
Overview 1 Executive Summary 2 Economic Indicators 3 Regulations Transport 4 Automotive OEM 5 Automotive Refinish 6 Motorcycles 7 Trucks, Buses and Other Vehicles 8 Rail 9 Aircraft 10 Marine Coatings Construction & Infrastructure 11 Protective Coatings 12 Industrial Wood Coatings 13 Agriculture, Construction and Earthmoving 14 Pre-coated Metal Sheet Packaging & General Industrial 15 Metal Packaging Coatings 16 General Industrial Coatings 17 Coatings for Plastics
2 2.1 2.2 2.3 3 3.1 3.2 4 4.1 4.2 5 5.1 6 6.1 6.2 7 8
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Executive Summary
Chapter Contents
Introduction Global Summary Automotive OEM Automotive Refinish Motorcycles Trucks, Buses and Other Vehicles Rail Aircraft Marine Coatings Protective Coatings Industrial Wood Coatings Agriculture, Construction and Earthmoving Pre-coated Metal Sheet Metal Packaging Coatings General Industrial Coatings Plastic Coatings Terms and Conditions
PRA 2011
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Overview
Executive Summary
PRA 2011
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Overview
Executive Summary
Protective Coatings
AkzoNobel (Netherlands) Jotun (Norway) Hempel (Denmark) PPG (United States) Sherwin-Williams (United States) Carboline (United States) Part of RPM
Overview
Executive Summary
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 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.
2009 tonne 2009 tonne Share % . . . . Share % . . . CAGR % . . . . . . . . CAGR % (.) (.) . . . . . . . . 2015 tonne 2015 tonne Outlook Outlook
Total
Technology Solventborne Medium Solids Solventborne High Solids Waterborne Powder
Total
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Chapter Contents
Economic Indicators
1 2 Introduction Key Economic Indicators
A B C D E Economic Trends Consumer Activity Industrial Activity Agriculture Trends Construction Trends
Regulations
1 2 Introduction Regulation Categories
2.1 Chemicals Management A Europe B North America 2.2 Volatile Organic Compounds (VOC) Emissions A Europe B Americas C Asia Pacific 2.3 Classification and Labelling A Globally Harmonized System of Classification and Labelling of Chemicals (GHS) B Classification, Labelling and Packaging (CLP) Regulation 2.4 Industry Related Regulations by Sector
3 4
3 4
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Overview
Consumer Confidence Index
Economic Indicators
Consumer Activity
The Global Consumer Confidence Index provides a comparative measure of global confidence. Economic indicators relating to retail spending levels, employment, private consumption and investment all provide useful indicators of consumer activity. In line with economic performance, consumer confidence levels appear higher in the emerging economies than for their advanced counterparts.
The index finished 2010 at 90 points having peaked at 93 points in Q2 2010. Latin America was the worlds most optimistic region at 100 points, followed by Asia Pacific at 97 points, reflecting strong growth prospects in emerging economies. The highest index score was India at 131 points. Conversely, Europe exhibited the lowest levels of consumer confidence at 78 index points and North America at 83 points. According to the IMF, private consumption recovered strongly in emerging economies but the advanced economies have lagged. Investment excluding construction experienced a return to growth in advanced economies, suggesting longer-term considerations are driving activity. This is encouraging for employment and consumption levels in the medium to long-term.
Retail Spending
Data from the IMF suggests that retail sales, which declined considerably in response to the recession, have recovered globally in 2010. Emerging economies exhibited stronger growth in retail spending than the advanced economies, and contributed to growth in retail sales around the globe. However, the loss of consumer confidence in the latter part of the year resulted in downward trends for all economies. Low consumer confidence, high unemployment, and reduced disposable incomes are constraining spending in the advanced economies. Global Industrial Coatings Markets 2010 2020 PRA 2011 Page 2-6
Source: IMF
Overview
Economic Indicators
Construction in Europe
Total EU construction activity was worth 1,173 billion in 2009 with Germany, Spain and France leading the region. The largest share of activity was attributed to non-residential construction (31%) followed by maintenance (29%), infrastructure construction (22%) and residential construction (18%). Germany is the largest construction market in Europe by market size. In 2009 construction output in Germany was 245 billion accounting for 21% of the European market and nearly 11% of the countrys GDP. The recession was only felt in Germany from the beginning of 2009 when industry turnover and construction orders dropped sharply. The volume of residential construction investment fell dramatically in the UK and Spain in 2009, 27% and 24.5% respectively. The construction market in Spain and France totalled at 163 billion and 161 billion respectively in 2009. New house starts in each countrys market began to decline in 2007 reaching the bottom by 2009 with Spains house starts declining by nearly 60% in 2008 and 2009. Non-residential construction declined sharply in all European markets by an average 17% to18% year-on-year in 2009.
Changes in Investment for Residential Construction (2005 2012) (% Change) France Germany Italy Spain UK 2005 5.8 -3.7 5.3 6.1 -3.6 2006 6.2 6.2 4.1 6.2 9.0 2007 4.8 -1.7 0.5 2.5 0.2 2008 -2.3 -1.8 -3.1 -10.7 -23.4 2009 -8.1 -1.0 -9.3 -24.5 -27.0 2010 -2.5 3.5 -3.4 -16.6 7.9 2011 1.3 1.6 0.5 -3.6 8.6 2012 2.4 2.0 1.8 -0.3 3.3
Source: FIEC
Changes in Investment for Non Residential Construction (2005 2012) (% Change) France Germany Italy Spain
Source: OECD
UK
Source: OECD
Page 2-20
Overview
Regulations
Regulation Categories
Where a refinish operation uses more than 500 kg solvent per year, it comes under the regulation of the Solvent Emissions Directive (SED). The full definition of these terms as outlined in the Directive, are shown in the glossary to this chapter.
All of the major refinish suppliers have invested significantly in training their customers to use the new compliant products
The industry was given plenty of warning that the new limits were going to come into force so the coatings manufacturers were able to develop compliant coatings in preparation for the implementation of the Directive. Many of the European body shops were using the compliant coatings well before the 1 January 2007 deadline. All of the major refinish suppliers have invested significantly in training their customers to use the new compliant products, so the transition to the new coatings was very smooth. The application properties are very similar to the older solventborne coatings, if not better, and the new application equipment gives better productivity. The cost of the compliant coatings is 15% to 20% higher than the older products, but they require less volume to achieve the required finish and so overall coating cost is the same. This need for lower volumes has negatively affected the volume growth in this market over the last five years, but the value has remained static. Some growth in refinish has occurred in the commercial transport sector and offsets lower volumes in passenger cars.
Page 3-29
Overview
Regulations
Regulation Categories
B
ISO 12944 Categories of Atmospheric and Immersive Service Conditions
Corrosion risk C1 C2 C3 Atmospheric C4 C5-I C5-M Im 1 Immersion Im 2 Im 3 Very low Low Medium High Very high (Industrial environment) Very high (Marine environment) Immersion in fresh water i.e. freshwater lakes Immersion in sea or brackish water Buried in soil
C4
C5-I
C5-M
Page 3-40
Automotive OEM
Chapter Contents
2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn
Technology
7 8
4.2 Principal Automotive Producers 3.2 The Body Coating Process A Toyota 3.3 Current Technology B General Motors (GM) C Volkswagen AG (VW) A Electrocoat Layer D Renault-Nissan Group B Primer Surfacer Layer E Ford Motor Company C Basecoat Layer F Hyundai Motor Company D Clearcoat Layer G Fiat-Chrysler Group E Single Finish Coat Layer H Honda Motor Company F Comparative Layer Costs and Economics of Supply I PSA Peugeot-Citron 3.4 New Developments and Standards J Suzuki Motor Corporation A New Developments in Coating Processes 4.3 Global Market Size and Growth B Other Developments A Automotive OEM Coatings Demand in Asia Pacific C Standards B Automotive OEM Coatings Demand in Europe, Middle East and Africa C Automotive OEM Coatings Demand in the Americas
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Transport
Automotive OEM
Technology
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. Automation of coating lines is growing and external body surfaces are increasingly spray-painted by robots. Automotive OEMs are starting to use robots for the internal surfaces to further reduce operating costs, but still with a manual touch-in facility to coat difficult areas that provides an additional on-line quality inspection stage. Each of the separate coating layers are cured at temperatures exceeding 135C (275F) 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.
The top coat can be either one coat of a solid colour top coat; or one colour basecoat followed by a clearcoat
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Transport Global Vehicle Manufacturing by Major Country Producer in 2006 and 2009 (million units)
Automotive OEM
Markets
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 redistribution 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
Transport
Automotive OEM
Outlook
Forecast World Coatings Demand by Technology 2010-2020 (million tonne) Forecast Coatings Demand by Technology 2010-2020 (million litres)
2010 Solventborne Waterborne Powder coatings Electrocoat Overall Coatings Demand . . . . . 2011 . . . . . 2012 . . . . . 2013 . . . . . 2014 . . . . 2015 . . . . . 2020 . . . . .
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Automotive Refinish
Chapter Contents
2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn
Technology
3.1 Current Technology A Body Fillers and Putties B Primers and Primer Surfacers C One-Coat Topcoats D Basecoats E Clearcoats 3.2 Regional Coating Technology A Coatings Technology in Europe, Middle East and Africa B Coatings Technology in the Americas C Coatings Technology in Asia Pacific 3.3 Standards and New Developments A Regulations B UV Curable Refinish Products C Colour Matching
Outlook
6 7
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Transport
Automotive Refinish
Technology
C
Regional Variations in Colour Preferences: World
Colour Matching
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
Colour Silver Black Grey Blue Red Light brown / Beige White Green Others Global % 26 24 16 5 6 3 16 2 2 Europe % 17 24 19 9 7 5 14 1 4 US % 17 18 15 9 11 5 21 2 2 Japan % 24 22 5 10 3 3 28 1 4 South America % 33 23 13 3 9 3 13 3 0 China % 33 31 18 2 4 1 9 1 1 South Korea % 33 26 14 3 4 1 18 1 0
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Transport
Automotive Refinish
Markets
Consumption of Coatings for Automotive Refinish by Category: Asia Pacific (million litre)
The market for Automotive Refinish coatings in Asia Pacific is estimated to be over million litres (, 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 Filler Primers Basecoat / colour coat Clearcoat Total % change 2006 .% 2007 .% 2008 .% 2009 .%
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. 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 in these countries. However, there is a growing environmental awareness and use of low-VOC compliant technology, both high solids and waterborne basecoats in both these countries and across the Asia Pacific region. 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 and the mature market of Japan is the large number of first-time buyers.
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Transport
Automotive Refinish
Markets
AkzoNobel has significantly boosted its presence in the Chinese automotive market after acquiring Changzhou Prime Automotive Paint Co. Based in Jiangsu province, Prime is one of Chinas largest vehicle refinish suppliers 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. AkzoNobels Refinishes business has focused mainly on Chinas 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 use by automotive OEMs as well as the technology for an integrated coating process, which yields more costefficient 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 countrys 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.
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Motorcycles
Chapter Contents
6. Transport Motorcycles
1 2 Executive Summary Introduction 4 Markets 5 6 Suppliers Outlook
4.1 Global Market Drivers and Trends A Motorcycle Production B Performance of the Global Economy C Household Disposable Income D Population and Urbanisation Growth E Growing Environmental Awareness F Availability of Finance 4.2 Principal Motorcycle Producers A BMW Motorrad B Bajaj Auto C Harley Davidson D Honda E Kawasaki F Piaggio Group G Suzuki H Yamaha 4.3 Global Market Size and Growth A Motorcycle Coatings Demand in Asia Pacific B Motorcycle Coatings Demand in the Americas C Motorcycle Coatings Demand in Europe, Middle East and Africa 5.1 Suppliers Global Position
2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn
Technology
7 8
3.1 Current Technology A Liquid Coatings: Solventborne and Waterborne B Powder Coatings C Electrocoat D UV Coatings 3.2 Coatings Technology by Application A Metal Components B Plastic Components C In-Mould Coating
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Transport
Motorcycles
Technology
A
Motorcycle Colour Preferences: World
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 being 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, onecomponent coating processes and when a two-component coating clearcoat is used.
Base coats and colour coats are increasingly important as OEMs use more complex pigments and increase their range of colour bases
Solventborne, oven-cured base coats can be based on acrylic, polyester or acrylic/polyester combinations, depending on the coating supplier, with CAB being incorporated into metallic colour formulations to provide 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. 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 twocomponent 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
Transport
Motorcycles
Markets
Bajaj Auto Escorts Group Hero Group Honda Motorcycle & Scooter India (HMSI) Ideal Jawa Kinetic Engineering Lohia Machinery Mopeds India Royal Enfield TVS Motor
India is still the second largest producer with the output exceeding 11 million units, accounting for over 20% of 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. Motorbikes account for over 80% of the total market. A number of factors have influenced consumer preferences: motorbikes have replaced scooters as the preferred means of individual transport due to their 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. The Indian industry landscape changed in late 2010 when market leader Hero Honda, the long-standing joint venture between Hero Group and Honda Motor Company, was dissolved. Hero Group bought Hondas 26% stake and has plans for re-branding in order to target both the domestic and highly competitive international 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 expected to start manufacturing in 2011 with an annual production capacity of 600,000 units, which will double 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 luxury motorbikes segment, including premium sports bikes. With over 285,000 estimated millionaire households at 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 Korea's 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 threewheeler passenger vehicle Alpha Passenger. Force Motors, a joint venture between Bajaj Tempo and MAN, is a leading player in the goods carrier segment.
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Transport
Motorcycles
Markets
Grupo Elektra is the largest domestic producer or motorcycles through its Italika brand, and has had sales growth since 2005, claiming a share of 55% in 2009. The company produced 61,000 motorcycles in 2008, 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 in revenues due to the recession. Production numbers for Harley Davidson also indicate the pressures in the 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
Chapter Contents
2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn
Technology
7 8
3.1 Current Technology 3.2 Technology Systems A Solventborne and Waterborne Liquid Coatings B Electrocoat C Powder Coatings D Other Coating Systems 3.3 Truck Coatings A Chassis B Cabins C Bodies and Trailers 3.4 Bus and Coach Coatings A Chassis B Bodies 3.5 Other Vehicles 3.6 New Developments and Standards A New Developments in Vinyl and Decal Technologies B Standards
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Transport
Technology
PRA 2011
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Transport
Markets
Germany
Truck Production Output: Germany (000 vehicles) Germany is the largest market for trucks in Europe. Road haulage accounts for 95% of the total freight industry 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-Wrttemberg in the south of Germany. Germany is home to the worlds 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 companys 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 industrys output. Europe remains MANs 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 from Asia Pacific. The main production facilities are in Augsburg (Bavaria) in the south and Ruhr (North RhineWestphalia) in the northwest of the country. 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.
Daimler MAN
PRA 2011
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Transport
Markets
A
Asia Pacific region generates the highest demand for associated coatings... just over , tonnes
In common with the Automotive OEM coatings market, the Asia Pacific region generates the highest demand for associated coatings in terms of estimated quantities consumed. In 2009 just over , tonnes ( million litres) of coatings were used for Trucks, Buses and Other Vehicles. Not only does the Asia Pacific account for over 65% of worldwide demand, but it was the only region to 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 Truck Trailer Bus Other Vehicles Total % Change 2006 . 2007 . 2008 . 2009 .
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.
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Rail
Chapter Contents
8. Transport Rail
1 2 Executive Summary Introduction 4 Markets
4.1 Global Market Drivers and Trends A Passenger Industry and Rail Freight Performance B Urbanisation C Growing Environmental Awareness D Availability of Finance 4.2 New Build Rolling Stock A Rolling Stock Manufacturing and Trends in Europe, Middle East and Africa B Rolling Stock Manufacturing and Trends in the Americas C Rolling Stock Manufacturing and Trends in Asia Pacific D Rail Refurbishment 4.3 Global Market Size and Growth A Freight Rolling Stock Coatings B Passenger Rolling Stock Coatings C Locomotive Rolling Stock Coatings D Rolling Stock Below the Solebar Coatings 4.4 Rail Coatings Market in Europe, Middle East and Africa A Market Drivers B Market Dynamics, Size and Growth 4.5 Rail Coatings Market in Americas A Market Drivers B Market Dynamics, Size and Growth 4.6 Rail Coatings Market in Asia Pacific A Market Drivers B Market Dynamics, Size and Growth
2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn
Technology
5 6
Suppliers Outlook
3.1 Current Technology 3.2 Technology Systems A One-Component (1K) Coatings B Two-Component (2K) Coatings C Fillers 3.3 Coatings Technology by Application A Passenger Carriages and Multiple Units B Locomotives C Freight D Refurbishment 3.4 General Coating Technology Trends A Passenger Carriages and Locomotives B Freight Cars
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Transport
Rail
Introduction
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. New Orders for Railroad Equipment Placed with Leading Suppliers Billion Reduced freight volumes in these regions generated overcapacity and a large number of locomotives and freight cars were left idle. By contrast, the Asia Pacific performed well during the same period and experienced growth of 6% in 2008, a slowdown of just 2% on the previous year. Moderate growth of 2% in rail freight volumes was 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
Transport
Rail
Technology
Rolling stock designed for carrying passengers has four distinct areas in which the coatings are required to offer different performance properties. These are: Exterior sides Interior Roofs Below the solebar chassis members, bogies, traction bars, etc.
The most widely used coating system used in most parts of the world consists of a two component epoxy primer followed by a two component polyurethane finish.
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 system used in most parts of the world consists of a two component epoxy primer followed by a two component polyurethane finish. Some specifications require an intermediate primer surface layer, again based on two component polyurethane. The finish can be either a one coat system or, where graffiti resistance is required, a coloured base coat followed by a clear coat. Whilst the basic technologies are common globally, the form in which they are used varies from region to 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
Transport
Rail
Outlook
6 Outlook
In 2010, rail coatings reached ... million litres and a value of million.
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
Aircraft
Chapter Contents
9. Transport Aircraft
1 2 Executive Summary Introduction 4 Markets
2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of Economic Downturn 4.1 Global Market Drivers and Trends A Global Aircraft Fleet B New Aircraft Production C Aircraft Size and Substrates D Maintenance, Repair and Overhaul of Aircraft 4.2 Global Market Size and Growth A Aircraft Coatings Demand in the Americas B Aircraft Coatings Demand in Europe, Middle East and Africa C Aircraft Coatings Demand in Asia Pacific 4.3 Suppliers Global Position
Technology
3.1 Impact of Coatings on Flight Dynamics A The Dynamics of Flight B Effect of Coatings on Flying Efficiency 3.2 Technology Drivers A Cost Considerations B Weight Reduction C Environmental Impact 3.3 Current Technology A Civil Aircraft Coatings B General Aviation Aircraft Coatings C Helicopter Coatings D Other Aircraft Coatings E Maintenance, Repair and Overhaul Coatings 3.4 Standards and New Developments A Standards and Regulations B New Developments
Outlook
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Transport
Aircraft
Technology
B
The critical consideration for aircraft coatings is the smoothness of surface finish achieved by the topcoat
The key factor with drag is air flowing over the airframe. Consequently, the critical consideration for aircraft coatings is the smoothness of surface finish achieved by the topcoat. The effect can be considerable and led to Boeings decision, for example, to use only one paint colour on the engine nacelle inlet of the latest 787 Dreamliner. 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.
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Transport
Aircraft
Markets
North America has traditionally been the main producer of aircraft. This position was challenged with the emergence of Airbus during the 1970s. Deregulation of the US market resulted in legacy carriers facing stiff competition from new entrants based on the low-cost airline model. 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 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.
There are two major OEMs for large civil aircraft. These are: 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.
Source: SpeedNews
Coatings and livery are applied at the final assembly plant in Germany. Air France Industrie and Sabena Technics are the two main approved MRO applicators. Interior coatings are mainly supplied by Mankiewicz.
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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. The sheer volume of smaller aircraft in the general aviation segment generates significant demand for Aircraft Coatings, which peaked at just over . million litres (, tonnes) in 2008 before the recession resulted in a 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 Civil Aircraft General Aviation Aircraft Rotorcraft Others Maintenance, Repair and Overhaul (MRO) Total 2006 2007 2008 2009
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.
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Marine
Chapter Contents
1 2
Markets
2.1 Market Definition 2.2 Macro Drivers 2.3 Impact of the Economic Downturn
Technology
4.1 Global Market Drivers and Trends A The Global Fleet B Shipbuilding C Ship Repair and Maintenance D Seaborne Trade E The Global Supply Chain F Ship Construction Finance 4.2 Global Market Size and Growth 4.3 Market Segmentation: Size, Drivers and Key Features A Deep Sea B Coastal C Offshore Supply Vessels D Leisure Craft: Yachts and Super-Yachts E Containers 4.4 Suppliers and Global Position
3.1 Deep Sea and Coastal A Shop Primers B Antifouling Coatings C Cargo Hold Coatings D Tank Coatings E Topside and External Superstructure F Ship Interiors and Engine Room 3.2 Yachts and Super-Yachts A Yachts B Super-Yachts 3.3 Containers 3.4 Standards and New Developments
Outlook
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Transport
Marine Coatings
Introduction
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. 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.
Shipbuilding
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