Coating market – demand for industrial coating on the rise

15 Feb

By: B&Company Vietnam

Reports & Publications

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In Vietnam, there are about 600 coating manufacturers, among which, there are a total of 30 foreign-invested companies accounting for 65% of the market share, such as Akzo Nobel (Dutch company with biggest share in the global market), PPG Coatings (US corporate with second biggest global market share), Kansai Paint and Nippon Paint (Japanese companies with 9th and 12th global market share), Jotun (Norwich), Hempel (Danish).
In 2013, 500 million liters of coating (about 1.2 billion US dollars) was manufactured, with the growth rate reaching 10%. As predicted by the Ministry of Industry and Trade, in 2020, this rate will be at 13% on average. Coating is categorized into construction coatings used as house or building coatings; and industrial paints used to coat ships, wooden materials, metal coils, vehicles, etc.

According to the current production value, construction coatings takes up a large proportion of 54%, while industrial coating, though operated later but has been in the increasing demand because of the industrialization. Especially, in 2014, the trading volume of wood used for furniture domestically and abroad reached about 3 million meter cube, which accordingly pulled up the demand for coatings of this timber volume.

Moreover, the shipbuilding industry with 120 enterprises is manufacturing 1 million dead-weight-ton /year of ships and vessels per year, at the CAGR of 5-10%. In addition, with the steel output quantity of 12 million tons (increased by 15% compared to 2013), 4 million motorcycles (increased by 2% compared to 2013) and 0.2 million cars to be manufactured (increased by 4.4% compared to 2013), the demand for industrial coatings in 2014 is predicted to experience a significant increase, the market size will be about 600 million USD, the growth rate reaches about 10%.

Along with the anticipated increasing demand, the foreign investment is also on the rise. Preferential policies such as promoting the transfer of foreign technology, the development of ancillary industries, simplifying investment procedures for foreign investors are also enhanced. In 2012, Akzo Nobel has constructed a new wood coatings factory, and at the same time expanded the scale of its current factories. In 2013, Jotun invested 8 million USD into warehouse facilities in Binh Duong province, along with the distribution of wood coatings. Recently, in May 2014, Nippon Paint has established its third plant in Vietnam, focusing on manufacturing industrial coatings for heavy industry, shipbuilding, auto-making industry, etc.

Besides, there are still other business opportunities apart from the pursuit of market demand. Raw materials depend mostly on imports from foreign countries such as Japan, Europe, Thailand, Singapore, etc. In 2013, raw materials imported to Vietnam reached up to 5.5 billion USD. The development of the chemical industry supplying raw materials is very important in order to increase the competitive strength for Vietnamese coatings as an ancillary industry.

B&Company Vietnam