Summit, NJ, US
London, UK
San Francisco, CA, US
Beijing, China
CEE Market Development Markets, Trends & Opportunities
Prague, 26th September 2013
New Delhi, India
Agenda • IRL Overview • Economic Development • Market Metrics • Growth Regions and Countries • Key Trends and Opportunities
Global Reach San Francisco, CA West Coast clients
Summit, NJ
London, UK
East Coast clients
European clients
New Delhi, India
Korea, China & Japan Presence
Providing information to US & EU teams
Providing information to US & EU teams
European HQ North American HQ Satellite Offices
IRL’s global footprint (London; Summit, NJ; San Francisco, CA; Beijing; New Delhi) allows our clients to benefit from a local account management team, combined with geography-specific sector knowledge and linguistic capabilities.
IRL Database IRL has recently completed its global coatings database and intends to update it as a live platform to monitor the industry. 9 End-Use Industries: • • • • • • • • •
Architectural Automotive OEM Auto Refinish General Industrial Wood Coatings Marine Plastic Powder Protective
IRL Paints & Coatings Database
Data Split by Chemistry: • • • • • • •
Epoxy Polyurethane Vinyl Acrylic Polyester Alkyd Nitrocellulose
102 Countries Across: • • • • • • • •
Asia-Pacific Middle East Africa Eastern Europe Western Europe Central Europe Latin America Central America & Caribbean
Application Technology: • • •
Solvent-Based Water-Based Radiation-Curable
4
How Can We Help You? Ad-Hoc Consulting The IRL coatings database provides a fantastic platform to help coating companies evaluate their strategies, identify opportunities and grow their business.
Market Entry & Expansion
IRL is keen to leverage the data platform and dive deeper to help companies enter new markets and expand their activities and clients. Need to know the protective coatings market size and competitive landscape in Turkey or another region of strategic focus to you? Why not give us a call and see what we can do for you….
Market Mapping
Monitoring & Forecasting
Due Diligence
Market Opportunity Analysis
Strategy Exercises
Business Model Analysis
Benchmarking
Customer Satisfaction
CEE Growth 15,0
Annual Growth (%)
10,0
5,0 2007 2008
0,0
2009 2010 -5,0
2011 2012
-10,0
-15,0
-20,0
Source: OECD
CEE Target Countries 4.000
Real GDP Billion $
3.500
Russian Federation
3.000 2.500 2.000 1.500
Turkey
1.000
Poland
500 Greece 0 -8,0
-6,0
Hungary Slovenia -4,0
-2,0
Czech Republic
Slovak Republic Estonia
0,0
Annual Growth 2012 (%)
2,0
4,0
Potential Paint Market Growth
Global Coatings Markets Paints & Coatings Consumption (Tonnes)
North American market estimated to be around 6.4 million tonnes.
Global Coatings Market Growth Paints & Coatings Consumption (Tonnes) Region
2012
2017
Growth Rate
1,230,530
1,539,655
4.6%
19,053,780
25,133,060
5.7%
204,505
244,510
3.6%
Central America
1,155,880
1,412,760
4.1%
Eastern Europe
4,453,380
5,656,694
4.9%
Middle East
2,019,400
2,498,332
4.3%
South America
2,982,072
3,934,490
5.7%
Western Europe
5,645,182
6,305,860
2.2%
36,744,729
46,725,361
4.9%
Africa Asia Caribbean
Grand Total
Eastern Europe is the star performer in Europe. Good growth of domestic markets and the shift of paint production from Western Europe has helped the market develop.
Coatings Usage Paints & Coatings Consumption by End-Use Industry in CEE, 2012 Plastic Coatings 1% Marine 1% Industrial Wood 8%
General Industrial 16%
Automotive Refinish 1% Automotive OEM 2%
Powder 4%
Protective 5%
Architectural 62%
Resin Usage Acrylic 23%
Vinyl/Styrene 25%
Unsaturated Polyesters 4% Polyurethane 5% Alkyds 22%
Others 9% Nitrocellulose 1%
Epoxy 11%
Total Central & Eastern European coatings market size in 2012 is estimated at 4,450,000 tonnes.
Market Sizes Paint & Coating Market Size, 2012 (Tonnes) 1800000 1600000 1400000 1200000 1000000 800000 600000 400000 200000 0
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CEE Market Metrics
• • •
Russian market demand and growth is driven mainly by bridge building and building and refurbishment of social housing. Oil and gas sector is showing around 3% growth, whereas infrastructure growth has been as high as 20% in some areas. Turkey is another high growth area, as are Croatia and Lithuania.
CEE Market Metrics Country
Architectural
Industrial
Total
BELARUS
78,400
52,490
130,890
CROATIA
26,300
9,480
35,780
100,600
77,230
177,830
78,400
72,540
150,940
102,000
30,940
132,940
9,000
3,780
12,780
12,700
9,180
21,880
387,300
208,400
595,700
93,500
60,550
154,050
RUSSIA
903,100
641,100
1,544,200
TURKEY
451,000
352,200
803,200
UKRAINE
195,100
46,210
241,310
Others
319,900
131,980
451,880
Total
2,757,300
1,696,080
4,453,380
CZECH REPUBLIC HUNGARY KAZAKHSTAN LATVIA LITHUANIA POLAND ROMANIA
Drivers & Restraints Economic crisis Price pressure Alternative finishing technologies to paints More durable coatings (Forth Bridge) Alternative materials to metals
Government construction projects Social housing programmes Building improvements and upgrades Population growth New technologies (better coatings) Sports Events (Sochi) Alternative energy
Per Capita Paint Consumption Per Capita Paint Consumption, 2012 18 16 14
Kg/Head
12 10 8 6 4 2 0
Focus Countries Turkey • • • • • • •
Ideal to supply Asia and Europe Furniture coatings growing very fast Gas pipelines from Caspian into Europe Accession into EU 7.8% growth expected TSE (Turkish standards) into the CEN 10.2 kg/head
Russia • • • • • •
Ukraine • • • • • • •
80% market is decorative Stabilisation of energy supply Investments from EU Large industry (steel and mining) Furniture and industry now growing 5.8% growth expected 5.0 kg/head – large growth potential
Large infrastructure improvements Rail and bridges Sochi Growing automotive industry Renovation of housing blocks 10.3 kg/head Poland
• • • • •
No recession during 2008/2009 Large supply of paint from Germany 62K 3.1% growth expected High competition: 150+ paint companies 15.4 kg/head
Potential Paint Market Growth
CEE Coatings Market Analysis Weaknesses Strengths
WE is a mature market so export growth limited
Good growth - Waterbourne
Lack of innovation and research institutions
Government projects have sustained demand Innovative market
Increasing raw material costs Regulation
Allows manufacturers to differentiate their offering
Price pressure
Intensifying trading relationships with Western European countries and growth in foreign investments into the Ukrainian economy
Consumers need educating about environmental issues of paint (solvents, pigments etc)
SWOT Opportunities Government investment in infrastructure
Threats
Population growth
Global economic crisis (fear to invest)
Social housing programmes
High raw material prices
New technologies (water-based and powder)
New technologies such as films
New product development opportunities Architectural
Changes in manufacturing materials that may not need coating
Repair of old facilities, in heavy industry
General economy dependency on the economic situations of trading partners.
Utilisation the advantage of domestic products Cheapness
Growing competition with imported products
Thank You
Robert Outram Associate Director
[email protected] +44 (0)208 832 7750 www.informationresearch.co.uk
