Market for Decorative Coating is Poised for Growth on the Back of Growing Residential and Commercial Building and Infrastructure
The decorative coatings industry is sensitive to Gross Domestic Product (GDP) growth and tends to grow at 1.5 to 2 times that of Southeast Asia’s GDP. The decorative coating market in Southeast Asia is expected to fare well due to the impressive growth in the construction industry, a result of the development of residential and commercial buildings as well as infrastructure. The optimistic economic conditions anticipated in most Southeast Asian countries, especially Indonesia and Thailand, are expected to cause these sectors to witness buoyant growth, thereby influencing the decorative coating market.
Indonesia accounted for the largest share-25.4%-with a revenue of $1.22 billion in 2017, followed by the Philippines, Vietnam, and Thailand. Much of the focus is now shifting toward emerging markets-mainly Indonesia, Vietnam, and the Philippines-as volume is the name of the game; these countries host large populations of 251 million, 91 million, and 99 million, respectively.
Economic growth rebound in Indonesia and Thailand will increase the consumption of decorative coatings. Southeast Asia is poised for a growth rebound in 2018. Aggregate growth is likely to rebound to 5.0% in 2015 and 2016, as recovery in Indonesia and Thailand leads the way and most of the subregion trends up and benefits from rising exports and lower inflation.
Inflation is forecast to subside to 3.1% in the next 2 years from 3.2% in 2017, in line with global oil and commodity prices. The decorative coating market in Southeast Asia is expected to fare well due to impressive growth in the construction industry-a result of the development of residential and commercial buildings as well as infrastructure. The optimistic economic conditions anticipated in most Southeast Asian countries, especially Indonesia and Thailand, are expected to cause these segments to witness buoyant growth, thereby influencing the coating market.
Rising urbanization contributes to robust construction and infrastructure spending growth. Massive construction and infrastructure spending in SEA in 2016, 2017, and beyond as a result of rising urbanization is expected to drive the demand for coatings. In addition, due to rapid urbanization, the ASEAN-5 is seeing increases in construction spending activities.
However, fluctuating raw material costs are expected to restrain market growth, as they severely affect margins in this price-sensitive market. Titanium dioxide is a key raw material in the coatings space. An increase in its price, due to supply shortages, is a major concern for decorative coatings companies. Profit margins will remain under constant pressure if price hikes continue. Suppliers will also be under constant pressure to develop coatings with an optimum price to affordability ratio.
Key Issues Addressed
- At what stage of lifecycle is the decorative coating market in and how is it expected to grow?
- What are the key drivers and restraints for the decorative coatings market?
- What is the revenue forecast for the coatings market?
- What are the dynamics influencing the growth of the different market segments?
- Who are the leading market participants?
- What is the coating technology trends used to meet customer needs?
Table of Contents
Companies Mentioned (Partial List)
A selection of companies mentioned in this report includes, but is not limited to:
- 4 Oranges
- AkzoNobel
- Atlantic Ocean
- Avian
- Bauhinia Paint
- Berger
- Camel Paint
- China Paint
- Dana Paint
- Davies (Charter Chemical)
- Dutchboy
- Jotun
- KOVA
- Mowilex
- Nippon Paint
- Pacific Paint
- Propan Raya
- Rajawali Hiyoto
- SKK
- TOA Paint
- Valspar
- Wellcoat
- Yung Chi
