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Taking paint company Valspar as an example, its sales increased by 11.1% in the first quarter of this year, but net income declined by 36%. This result reflects that although the paint company's sales revenue increased, the sharp increase in raw material costs has a greater negative impact on profitability.
At the same time, consumer demand in the global paint market continues to grow. Chemark Consulting Group predicts that global paint consumption growth in 2005 is expected to reach 4.7%. The growth rate in North America is about 3.1%, Europe is about 3.4%, Asia is about 5.5%, and the rest of the world is about 4.5%. Asia, especially China, has become the fastest growing paint market in the world. .
The current paint consumer market is divided into architectural coatings, industrial OEM (original equipment manufacturers) coatings and special coatings. Among them, the average growth rate of Bone Boilers is the same as that of Bone Boilers, while in China, Brazil and the former Eastern European countries, it is growing at a double-digit rate. According to estimates from the Chemark Consulting Group, total global architectural coatings sales this year were approximately 31 billion U.S. dollars.
In contrast to architectural coatings, this year's global OEM coatings market is not performing well. Industry insiders expect an annual growth rate of only 0.5%. Despite strong growth in certain areas such as UV/EB solidification, the overall market is relatively weak, especially in the developed countries. As OEM coatings markets in China, Brazil, Eastern Europe, India, and some countries in the Asia Pacific region are rapidly developing, OEM coating production is shifting to these regions in recent years.
According to Chemquest experts, the largest application market for global OEM coatings is automotive OEM coatings, accounting for approximately 33% of the global OEM coatings market. In addition, 24% of general metals, 11% of coils, 10% of mechanical equipment, 6% of metal building materials, 4% of transportation, and 12% of other uses.
Special coatings include coatings for industrial maintenance, automotive repairs, ships, roofing, wood products, and transportation. Global sales of this type of special paint are expected to be 15 billion U.S. dollars this year, with an annual growth rate of approximately 2.7%.
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The raw material costs in the consumer market are rising steadily
One of the major problems faced by paint manufacturers this year is the high cost of raw materials. Factors such as tight energy supply and increased costs lead to rising costs of solvents, epoxy resins and acrylic resins, which directly affect the cost of paint production. Market analysts expect that the coating raw materials such as acrylic acid will continue to be in tight supply in 006, and the demand will exceed new capacity, with an annual growth rate of about 3% to 5%.
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