Recently, Eric Fernandez, PhD and Director of Business Development for EP Minerals joined a leadership panel of global experts at the Western Coatings Symposium in Las Vegas, NV, to discuss key trends, innovations and economics in the coatings industry today. EP Minerals diatomaceous earth is used as a functional additive in paint and other coatings. Organized by the Western Coating Societies, the conference serves the people, companies, clients and customers of the coatings industry. Eric's panel, "Let's Talk About Money," focused on the current economic climate in coatings, and included Vince Anderson from the Horn Company, John Gilbert from Behr, Sheryl Southwell of Specialty Polymers and Wilhelm Wessels of BYK Chemie. Coatings World Magazine covered the event and panel discussion in their December issue (link attached).http://www.coatingsworld.com/issues/1213/view_features/western-coatings-symposium-review/
Here's an overview of Eric's Q&A session on the coatings industry today:
Q: Which segments or markets of the chemical industry will drive growth for the next 5 years?Biochemicals, Biofuels, Oil & Gas, Construction (Paint and Coatings), mining.
A: The architectural market is the leading outlet for paint and coatings and will grow at an above average pace through the forecast period. The residential segment will offer the best opportunities for growth as the country recovers from the housing crisis that greatly reduced demand for residential architectural paint, particularly for new housing. Demand for interior paint will grow faster than demand for exterior paint. Increasing environmental awareness and greater consumer concern regarding indoor air quality will spur demand for low- or no-volatile organic compound (VOC) products, especially those that are marketed as having low odor or being odor-free.
Global demand for the paints and coatings market is expected to rise by approximately 5 percent annually and this is mainly fuelled by the Asia-Pacific region. The growing construction industry in China and India is the major market share holder in the Asia-Pacific region.
Demand for disinfectant and antimicrobial chemicals in the U.S. is forecast to rise 6.1 percent annually to $1.6 billion in 2017. A rebound in building construction activity, in conjunction with an improving U.S. economy, will drive strong increases in industrial markets such as paint and coatings and plastics. In institutional and consumer applications, anxieties about disease -- foodborne, health care-associated (HAI), and antibiotic-resistant -- will lead to gains amid increasing regulatory scrutiny and intensifying cleaning regimens. Rising public concern about microbial pathogens will also support growth in some industrial markets as disinfectant and antimicrobial additives are incorporated into a broader array of products.
Current worth of the global Green Solvents and Bio Solvents market (2012) is $4.0 billion and is estimated to reach $6.5 billion by 2018. The high demand across the industries such as cleaners, paints and coatings and printing inks will increase overall materials consumption for the following chemicals Lactate Esters, Alcohols, Glycols, Diols, D-Limonene, & Methyl Soyate.
Q: What are some of the chemical markets that are moving away from North America? A: I’ve seen companies increase their exports from the US to a point where they can justify a new facility overseas. So we see may see decreases in the US in certain markets (e.g. Fuel Additives), but it is not because the business is moving away. Rather it is because business that was supplied by the US is now being supplied locally. The market in the US remains the same.
Q: What are the major challenges for business development your company is facing in the current economic climate? A: Mature market conditions in the US. Most markets are generally flat or growing along with GDP. Where markets are growing faster (China, Brazil, etc.), logistics can be challenging.
Q: What do you see as the strengths and weaknesses for the North American chemical industry as a whole? A: Strengths are educated, hard-working workforce and low/steady natural gas prices. The industry is faced with too much regulation that is based on unscientific data. This weakens the industry compared to other parts of the world. Shale gas is a definitely strength in the US. It is estimated that lower feedstock and energy costs may help US manufacturers reduce natural gas expenses by as much as 11.6 billion annually through 2025. US manufacturing companies may employ approximately 1 million more workers by 2025 due to the benefits of affordable energy and demand for products to extract the gas.
Other strengths are: Innovation and size, since large corporations are able to negotiate better raw material prices, invest more in R&D, etc., as well as market diversification, access to natural resources, strong balance sheets.
The weaknesses of the chemical industry are: Pollution, health effects that cause regulatory concerns, heavy handed government policies, mature markets focus, excess capacity, old equipment with inefficient processes (lack of investment) and high fixed costs.
Q: What does the North American chemical industry need to do to improve our weaknesses to continue to grow this industry?
A: We need to improve our infrastructure to capitalize on the shale gas oil (instead of gas burning) and make ethylene or produce energy.