Transcript The Changing State of the

The Changing State of the
Global Marine Coatings Industry
Global Marine Coatings Forum
Goodwood Park Hotel
Singapore
November 8, 2012
Prepared by:
Scott Detiveaux
Orr & Boss, Inc.
Corporate Headquarters
33900 Harper Avenue, Suite 103
Clinton Township, Michigan 48035
U.S.A.
Presentation Agenda
 Global Coatings Market
 Geographic Shifts
 Market Forecasts
 Final Thoughts
2

An international management consulting firm.

Focused on the specialty chemicals, coatings,
adhesives & sealants, and related industries.

Headquartered in Detroit, Michigan USA.

Offices & Staff -- Americas, Europe and Asia.

Consulting services focused on the following three
areas for our clients:
 Growing revenues and market share.
 Reducing cost & complexity of the business.
 Improving profits and cash flow.
3
Representative List of Clients
Paint & Coatings
Ace Hardware Corporation
Ameron International
AkzoNobel
BASF Corporation
Beckers Industrial
Behr Process Corporation
Benjamin Moore & Company
CIN
Consorcio Comex S.A.
DAW / Caparol
DuPont Performance Coatings
Dyrup
Ferro Corporation
Helios
Hempel
ICI Paints
Inversiones Mundial (Pintuco)
Materis Paints
Nippon Paint
Pinturas Condor
PPG Industries, Inc.
Professional Paint, Inc.
RPM – Carboline Company
RPM, Inc. - StonCor Group
RPM -- Rust-Oleum Corporation
Samuel Cabot Incorporated
Sherwin-Williams Company
Sigma-Kalon
Tambour Paints
True Value Corporation
Valspar Corporation
Van Wijhe
Adhesives, Sealants & Films
Ashland Adhesives
ADCO Products
Avery Dennison
Casco/Akzo Nobel
Dow Corning
Franklin International
ITW Fibre Glass-Evercoat
Lord Corporation
Reichhold
Roman Adhesives
3M Company
Tremco, Inc.
TruSeal Technologies
Watson Standard
Inks
Ashland Specialty Chemicals
BASF
BF Goodrich / Noveon
Toyo Inks
Chemicals / Raw Materials
Arkema Emulsions
Ashland Chemical
BASF Corporation
Bayer MaterialScience
BF Goodrich
Celanese
Cytec
Evonik Degussa
Dow Coating Materials
DuPont Titanium Technologies
Chemicals / Raw Materials
Eastman Chemical Company
Huntsman
Kemira
Lapinus Fibres
Millennium / Cristal
Reichhold, Inc.
Rohm and Haas Company
Sartomer
Diversified Industries
Alberto Culver
Eli Lilly
Estee Lauder
Ford Motor Company
GenCorp Polymer Products
General Motors Corporation
Hershey Foods Corporation
ITW Ransburg
Lafarge Mortars
McKechnie Plastic Components
Nabisco Brands
Stanley Furniture
US Gypsum Corporation
Private Equity & Investment
Actis Private Investment
Credit Suisse
Dubai Capital
EBRD Investment
KKR Financial Holdings
Permira Advisors, LLC
Riverside Investment
4
We Wrote the Book on Paint
IPPIC’s Global Paint & Coatings Industry Market Analysis Report has
become the industry benchmark for reliable market data.
Next edition due to be published in December 2012.
Thank you to IPPIC and
ACA for allowing us to
share some of these
findings today.
Global Coatings Market Analysis
1st Edition: (2007 – 2012)
2nd Edition: (2009 – 2014)
3rd Edition: (2011 – 2016)
5
Presentation Agenda
 Global Coatings Market
 Geographic Shifts
 Market Forecasts
 Final Thoughts
6
Five Geographic Segments
North
America
Europe
Rest
of World
Asia
Pacific
Latin
America
7
11 Major Markets Segments
1. Decorative Coatings
- Professional Painters
- Do-It-Yourself (DIY)
7. Packaging Finishes
- Metal Container & Closures
- Paper, Paperboard, Film & Foil
2. Auto OEM Coatings
- Passenger Cars
- Lights Trucks
- SUVs
3. Other Transportation
Automotive, Light Truck, Vans
- Heavy Duty Truck & Bus
- Aerospace
- Other Land Transportation
-
8. General Industrial Finishes
-
Non-Wood Furniture & Fixtures
Heavy Machinery & Equipment
Home Appliances
Other Industrial Products
9. Automotive Refinish
10. IM & Protective Coatings
4. Wood Finishes
- Wood Furniture, Cabinets, etc.
- Flat Stock
5. Powder Coatings
6. Coil Coatings
- Coil
- Sheet and Strip
- Extrusion
11. Marine Coatings
- Coatings for vessels and
structures in marine and fresh
water operations for protection
and appearance.
- Antifouling coatings for ships.
- Ballast tank lining
- Tank linings for cargo
containers.
8
Geographic Segmentation
2011 Global Coatings Industry
Volume by Region
33 Billion Liters
2011 Global Coatings Industry
Value by Region
$106 Billion USD
9
Global Market Segments
For comparison purposes, powder coatings have
been converted to liquid equivalents at the rate of
1.5 liters of liquid paint per kilogram of powder
coatings.
10
Marine Market Segments
Coatings for vessels make up
the majority of the market
11
Marine Coatings
The vast majority of Marine
coatings are now applied in
Asia-Pacific.
12
Presentation Agenda
 Global Coatings Market
 Geographic Shifts
 Market Forecasts
 Final Thoughts
13
Geographic Shifts
2006 vs. 2011
3.5% CAGR
CAGR 2006 TO 2011
Volume
Value
North America
-2.9%
-0.8%
Europe
-0.5%
0.3%
Asia - Pacific
7.1%
7.5%
Latin America
4.7%
12.6%
ROW
4.1%
6.1%
Total
2.9%
3.5%
14
Application Types – Commercial / Military
Marine Coatings volume is
fairly evenly split – New
Construction vs. Maintenance
However, Application type
varies widely by region.
15
New Construction - Commercial
Source: IHS "World Fleet Statistics"
Over 93% of all new vessel
construction, in terms of gross
tonnage, occurred in South
Korea, China and Japan in 2011.
16
Military Fleets
The U.S. Military far
outpaces all others in
terms of ship weight.
The U.S. fleet size is
larger than the next ten
fleets combined.
Source: Strategypage.com
17
Pleasure Craft
Note that the vast
majority of all
pleasure craft
owners are in North
America and
Western Europe.
Source: ShowBoats International
18
Offshore Oil & Gas by Region
Source: IFPEN
ROW is the most important
region in terms of offshore
oil & gas activity.
19
Geographic Shifts
2006 vs. 2011
2.7% CAGR
Growth in the Marine coatings market in the past
five years has largely occurred in Asia-Pacific.
20
Presentation Agenda
 Global Coatings Market
 Geographic Shifts
 Market Forecasts
 Final Thoughts
21
Marine New Build Forecasts
New Ship
Construction grew
steadily and
significantly from
2006 to 2011.
Source: IHS 2011 World Shipbuilding Statistics
22
Marine New Build Forecasts
This activity has
drown down the
global order book
for new ship
construction.
Source: IHS 2011 World Shipbuilding Statistics
23
Marine New Build Forecasts
Source: Clarkson’s
The outlook for new
construction based
on the current order
book is pretty bleak
24
Global GDP Growth (2000 – 2016f)
6.5% CAGR
Source: IMF World Economic Outlook, Oct. 2012
25
Global GDP Growth (2000 – 2016f)
4.0% CAGR
6.5% CAGR
Source: IMF World Economic Outlook, Oct. 2012
26
Global GDP Growth (2000 – 2016f)
5.7% CAGR
4.0% CAGR
6.5% CAGR
Source: IMF World Economic Outlook, Oct. 2012
27
Regional GDP Growth (2006 – 2016f)
Source: IMF World Economic Outlook, Oct. 2012
Asia Pacific will
continue to lead the
pack, but at a somewhat
slower pace.
28
Trade Patterns
Seaborne trade is
projected to grow at
a slow rate for the
next five years.
Source: UNCTAD, Orr & Boss Estimates
29
Pleasure Craft Forecast
 Global pleasure craft
market is forecast to
grow to 2016.
– Growth is forecast in
US as well as in
developing markets
such as China
8% CAGR
 Much of the U.S.
growth is recovery
from the steep decline
in 2008 / 2009.
30
Oil & Gas Production
Forecast Growth in Total Liquid Fuel Production
by Region (2011-2016f)
Latin America and
ROW will see the
biggest increases
in production.
Source: US Department of Energy International Energy Outlook,
Orr & Boss, Inc. estimates
31
Global Coatings Forecast
Global coatings volume growth is forecast to be consistent with forecast GDP growth.
32
Marine Coatings Forecast
1.1% CAGR
Marine coatings volume growth is forecast to lag GPD and the overall coatings market.
33
Presentation Agenda
 Global Coatings Market
 Geographic Shifts
 Market Forecasts
 Final Thoughts
34
Final Thoughts
 The marine coatings is a small, but important part of the global coatings
market.
– Significant regional differences in the nature of the market.
 Marine coatings consumption has become increasingly concentrated in
Asia-Pacific.
– This is likely to continue.
 Market volume has been relatively evenly split between new construction
and maintenance.
– However, new builds are forecast to decline significantly over the next
several years.
 Seaborne trade is forecast to grow a modest about over the next five
years.
– This should lead to growth in marine maintenance coatings demand.
 Growth is forecast for the Pleasure Craft and Offshore components.
 Overall, very modest growth is forecast in the marine coatings market to
2016.
35
Questions and Comments?
36
36
The Changing State of the
Global Marine Coatings Industry
Global Marine Coatings Forum
Goodwood Park Hotel
Singapore
November 8, 2012
Prepared by:
Scott Detiveaux
Orr & Boss, Inc.
Corporate Headquarters
33900 Harper Avenue, Suite 103
Clinton Township, Michigan 48035
U.S.A.