Decorative Coatings Market

Updated on : April 05, 2024

Decorative Coatings Market

The global decorative coatings market was valued at USD 82.0 billion in 2022 and is projected to reach USD 98.9 billion by 2027, growing at 3.8% cagr from 2022 to 2027. The chemicals that are currently used to manufacture coatings are better than solvent-borne coatings. Products are currently sold with multi-year guarantees against corrosion, mostly due to improvements in the performance of coatings.

Decorative coatings can protect the exteriors of the buildings from heavy rainfall, strong wind, and snowfall. These coatings offer several benefits: durability, high flexibility, crack-bridging ability, waterproofing & weatherproofing, and resistance to dirt, mildew, and chemicals. In addition, producers are continuously introducing new products that are eco-friendly. The improved durability of coatings leads to the painting of window frames and doors less often, thus reducing the costs incurred by the end users. The enhanced scratch resistance allows parquet floors to be renovated less often. Apart from these, their water repellence and hydrophobic nature protect buildings from internal damage, help in maintaining the aesthetic appeal of buildings, and ensure a long life. These properties are increasing the demand for decorative coatings in various construction activities.

Attractive Opportunities in Decorative Coatings Market

Source: Interviews with Experts, Secondary Research, and MarketsandMarkets Analysis

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Market Dynamics

Driver: Growth of construction industry

According to the Global Construction Perspectives and Oxford Economics, the global construction output will grow by 85% to reach USD 15.5 trillion by 2030. China, the US, and India will contribute up to 57% to this overall growth of the industry. This growth is attributed to the economic recovery in these major economies.

Factors such as globalization, urbanization, rising standard of living, increasing purchase power parity (PPP), infrastructural development, and the rapidly increasing need to construct megacities in emerging economies are fuelling the construction industry worldwide; therefore, positively influencing the demand for decorative coatings. The construction industry accounts for about 5% of GDP in developed countries and 8% in developing economies. It is expected that there will be a large infrastructure demand in the emerging economies in the next two decades. By 2040, global infrastructure investment is estimated to be USD 3.7 trillion per year.

COVID-19 has impacted every region, country, and industry worldwide. Lockdowns and slowdowns have been the norm for months. However, the crisis has gradually returned to normalcy, and businesses are bouncing back to usual. A construction boom is expected in the Asia Pacific region, based on infrastructure projects, increasing urbanization, and increased interest in technology implementation and business model remodelling. Sustainability trends such as prefabricated construction, sustainable construction, and green building technology are likely to revolutionize the conventional way of business in the construction sector.

In Asia Pacific, China and India are the most important economies which create high growth opportunities in the construction sector in the region. In 2019, the average consumption of paints and coatings for the region stood at 4.7 kg, while India accounted for 4.1 kg, whereas in developed countries in the region, the average consumption was 9.7 kg. According to the annual report of Berger Paints, there is a gradual shift from unorganized to organized players, and per capita paint consumption in India is expected to boost the paint & coatings industry. This increased consumption is supported by measures taken by major players such as AkzoNobel N.V., PPG Industries Inc., and Asian Paints Limited to create awareness about repainting and renovation of residential and non-residential buildings for a longer lifespan. Improvement in the standard of living, rise in disposable income, and growing trends in interior decoration also drive the per capita paint consumption. These factors are positively influencing the growth of the decorative coatings market.

Restraint: Stringent regulatory policies and time-consuming approvals

Regulatory policies have a significant impact on the paints & coatings industry. Potential changes in regulations can create uncertainty throughout the value chain. This uncertainty refers to the time taken by the manufacturers at each node to accept the new regulation and adopt new technology. Different time-consuming regulatory changes in different regions can affect the raw material producers, formulators, channel partners, and end users. With the increasing number of governments implementing stringent regulatory policies, decorative coatings producers must constantly evolve their processes to comply with the new policies and reduce VOC emissions.

For instance, in the UK and the US, the requirement for reduction in VOC emissions is effective under the Varnishes and Vehicle Refinishing Products Regulations 2005. The Environmental Protection Agency (EPA) has also enacted its policies in accordance with the Clean Air Act amendments of 1977 in the US. Products that fail to meet the legal requirements are not commercialized in the Western European market.

In China, many regulations are being implemented to reduce VOC emissions from decorative coatings by monitoring the boiling points of ingredients (similar to European regulations) and indoor air quality standards. In 2015, the US witnessed two major regulatory developments, namely, the globally harmonized system (GHS)—which necessitated the proper classification and labeling of products indicating the VOC emission and hazard levels of the products—and the adoption of new VOC-free tinting bases for use in architectural base colors in Southern California.

As of September 30, 2019, 73 countries, or 38% of all countries, have legally binding measures in place to limit the manufacturing, import, and sale of lead paints. In many countries, using lead paint in homes and schools is not restricted, posing a major danger of lead poisoning to children. The most effective way to reduce lead exposure from paints is to enact national laws that prohibit the use of lead additives in paints, including legislation, rules, and/or legally binding standards where necessary. Countries that have not yet done so are asked to develop and implement appropriate national laws, rules, and/or standards that will, at the very least, prohibit the manufacturing, importation, and sale of domestic decorative lead paints.

Opportunity: Investments in emerging markets

Emerging economies are investing in large-scale infrastructure development projects. The markets in these economies are witnessing higher growth than those in North America and Europe. This is attributed to the leading companies investing heavily in these regions as there is a tremendous opportunity. Asia Pacific, especially China and India, provides remarkable growth opportunities for decorative coatings manufacturers. Rapid urbanization, a stable economy, and a growing construction industry have fueled the demand for decorative coatings in some Asia Pacific countries. More residential buildings are being constructed in the region to meet the needs of the growing population in major cities of Indonesia, Malaysia, Thailand, Vietnam, and other countries.

The increasing income and purchasing power in the emerging economies of TiO2, the Middle East & Africa, and South America prompt higher investment in construction. Thus, decorative coating manufacturers have opportunities to capitalize on the growth of emerging markets, such as China, India, Russia, and Brazil.

Challenge: Adoption of new technologies

A major barrier to adopting new technologies is the risk of exposure because of the unknowns presented by a new material or process. There is a need for extensive long-term testing that simulates real-world conditions and converging stressors to reduce the risk. Substantial beta-testing programs are also needed before transitioning to full commercial deployment. Another major barrier is the testing standards required for any given industry.

The challenge of achieving an extensive adoption of a technology that may alter how one formulates is a bit more complex and treads on issues related to perception and tradition. This means what the manufacturer offers must be either transformative or help make the application of a new coating successful. Collaborations in the coating technology space between coating manufacturers and raw material suppliers will be necessary to bring forward the next generation of coating technologies. The company or the manufacturer need to show their customers that they (manufacturers) are knowledgeable in their field and can respond to their needs with viable solutions, not only on the pigment side but through a wide range of consultancy. The community and some stakeholders must write and publish success stories. The industry is still very conservative and reluctant to take new forms of cooperation such as open innovation.

The powder coatings segment is expected to register the highest CAGR during the forecast period.

The powder coating technology uses dry resin powders for coating substrates with thermoplastic or thermoset films. The coating is formed after a layer of powder is applied with a powder spray gun or fluidized bed tank to the substrate and heated, thereby melting the powder. A key driver of the powder coatings segment is increasingly stringent environmental regulations on VOC emission.

The powder-based technology uses dry resin powders for coating substrates with thermoplastic or thermoset films. The coating is formed after a layer of powder is applied with a powder spray gun or fluidized bed tank to the substrate and then heated, thereby melting the powder. A key driving force in the growth of the powder-based segment is increasingly stringent environmental regulations for zero or non-VOC coatings. Powder-based technology is eco-friendly and expected to witness rapid growth due to its unique features, such as high corrosion resistance, chipping, high-quality finish, and abrasion. It also offers protection from moisture, heat, and chemicals. These power coatings emit only a small number of VOCs.

The polyurethane segment is expected to be the fastest-growing segment, by resin type, in the decorative coatings market during the forecast period.

Polyurethane resins are made from reacting polyalcohol and organic di-isocyanate. Polyurethane resin paints possess properties such as high durability, toughness, and high gloss and are easy to clean. Owing to these properties, polyurethane resin paints are used in various applications worldwide. Polyurethane resin is a polymer material that is often used in decorative coatings. This resin can provide a variety of benefits, including durability, abrasion resistance, and scratch resistance. It can also provide UV protection, which can help to protect the surface from fading. Because of these benefits, polyurethane resin is often used in both exterior and interior coatings. Popular uses for polyurethane resin in decorative coatings include deck flooring, window frames, and wall panels. Polyurethane resin can also be used in a variety of colorants to create a variety of colors and textures.

The decorative coatings market in Asia Pacific is expected to register the highest CAGR during the forecast period.

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Asia Pacific is a fast expanding market with several potential for industry participants. The majority of the major companies in North America and Europe intend to relocate their manufacturing bases to this area because to the availability of low-cost raw materials, cheap production costs, and the desire to better service local customers. The region's desire for luxury items is expanding as the middle-class population grows. Government measures are also assisting the building and construction industry's expansion. These factors are projected to have a significant impact on the decorative coatings industry.

According to the IMF, the Russia-Ukraine war has had a broad impact on the Asian economy in terms of trade and financial market uncertainty, as well as inflation, and the risk of fragmentation in the area is substantial. Falling foreign demand is one of its significant effects on Asia. The second focuses on food and commodity costs, which have risen dramatically since the conflict. The epidemic has already harmed the Asian economy, which has further exacerbated in the setting of conflict and caused economic uncertainty. Conflicts in commerce between many nations existed prior to the epidemic and war, particularly between China and the United States. As a result, trade concerns have grown dramatically.

North America shows tremendous growth during the forecast period.

The decorative coatings market in North America, comprising the US, Mexico, and Canada, accounted for a share of 20.6%, in terms of value, of the global market in 2021. However, it is highly regulated by the Environment Protection Agency (EPA), which is expected to reduce the market for the solvent-borne technology segment as it emits VOCs during the formulation and coating stage. Technological advancements in the manufacturing sector are driving the market in this region. The US accounted for the largest share of the North American decorative coatings market in 2021.

Most of the leading decorative coating manufacturers, such as PPG Industries, Inc., the Sherwin-Williams Company, Masco Corporation, and RPM International Inc., are present in this region.

Key Market Players

The Sherwin-Williams Company (US), PPG Industries, Inc (US), AkzoNobel N.V. (The Netherlands), BASF Coating GMBH (Germany), Jotun A/s (Norway), Asian Paints Limited (India), Kansai Paint Co., Ltd (Japan), Nippon Paint Holding Co., Ltd (Japan), RPM International, Inc (US), Masco Corporation (US) are the key players operating in the global market.

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Scope of the Report

This research report categorizes the decorative coatings market based on resin type, technology, coating type, color type, product type, user type, application, and region.

Based on resin type, the decorative coatings market has been segmented as follows:

• Acrylic
• Alkyd
• Vinyl
• Polyurethane
• Others

Based on technology, the decorative coatings market has been segmented as follows:

• Waterborne
• Solventborne
• Powder coatings

Based on application, the decorative coatings market has been segmented as follows:

• Residential
  • New construction
  • Remodel and repaint
• Non-residential
  • Commercial
  • Industrial
  • Infrastructure

Based on coating type, the decorative coatings market has been segmented as follows:

• Interior
• Exterior

Based on user type, the decorative coatings market has been segmented as follows:

• DIY
• Professional

Based on color type, the decorative coatings market has been segmented as follows:

• White
• Others

Based on product type, the decorative coatings market has been segmented as follows:

• Emulsions
• Wood Coatings
  • Varnishes
  • Stains
• Enamels
• Others

Based on the region, the decorative coating market has been segmented as follows:

• North America
• Europe
• Asia Pacific
• Middle East & Africa
• South America

Recent Developments

• In June 2021, AkzoNobel N.V. expanded its business in South and Central America after reaching an agreement to acquire Colombia- based paints and coatings company Grupo Orbis. Grupo Orbis is present in 10 countries in South America and Central America and The Antilles. This is a grow & deliver strategy.
• In June 2021, PPG acquired Tikkurila. This is expected to help the company to expand paint and coating options that are expected to now include Tikkurila’s environment-friendly decorative products and high-quality industrial coatings.
• In June 2019, Jotun planned to invest about USD 80 million in its new factory in Vietnam. This new factory is expected to be its third plant operating in Vietnam and is also the largest single investment abroad by the company. The company has completed the construction of its new water-based and powder coatings factory, which is expected to commence operations in the Hiep Phuoc Industrial Park, Ho Chi Minh City.

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