Industry Consolidation to Alter the Competitive Landscape in Architectural Coatings Market

Market to see surge in demand for sustainable water-based technologies over high VOC solvent-based products, finds Frost & Sullivan's Visionary Science team

LONDON, March 7, 2017 /PRNewswire/ -- The current robust year-on-year growth in residential construction in the United States points to a growing market for interior and exterior architectural coatings. The European Union also is experiencing a surge in construction activity, making it imperative for architecture coating manufacturers to identify potential areas of growth in the residential and commercial segments. While the North American market is highly consolidated, Europe is fragmented with a large number of regionally strong manufacturers across countries. This provides an opportunity for larger companies to merge with or acquire regional players to expand their customer base or acquire new technology solutions.

"The inflow of refugees, especially in Germany, Norway and Austria, is likely to spur residential construction activity and, eventually, demand for architectural coatings in Europe," said Frost & Sullivan Visionary Science Senior Research Analyst . "Interestingly, customer preference for coatings varies widely across Western and Eastern Europe. While consumers in Western Europe demand product quality and service, Eastern European customers are keen on cost effectiveness."

North American and European Architectural Coatings Market, Forecast to 2023, a part of Frost & Sullivan's Growth Partnership Service programme, finds that Eastern Europe markets like Poland, the Czech Republic and Slovakia are potential high-growth markets, whereas the Western Europe market is a more saturated market. Within Eastern Europe, Poland will continue to be the largest market in terms of volume, with , , and among the prominent manufacturers present in the country. Coating manufacturers in Western Europe can attempt to revive market interest by developing innovative interior coating products such as paint-and-primer-in-one, one-coat-hide, and high energy efficient coating technologies.

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Increasing consumer demand for shorter installation time and labor savings have stoked the growth potential of paint-and-primer-in-one and one-coat-hide products. There is already a substantial opportunity for product technologies like PPG Pittsburgh Paints REGENCY® Interior/Exterior Latex Paint, which is a paint-and-primer-in-one formula that offers excellent coverage, durability and stain resistance.

Such new technologies could also effectively combat the challenge posed by substitutes such as wallpapers, house-wraps as well as decorative concrete and exposed brick/stone masonry. While these alternatives are likely to affect volume of shipment, the high commoditization of wall paints in the interior segment also restrains market revenues.

"Nevertheless, the need to comply with stringent regulations to reduce volatile organic compounds (VOC) in solvent-borne architectural paints and coating products will shore up consumer demand and subsequently, revenues for architectural coatings," observed Venkatesan. "Coating manufacturers could make the most of this demand by establishing strong relations with professional customers and do-it-yourself consumers to understand their specific needs and deliver cost-effective, low-solvent, high-solid or waterborne products."

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North American and European Architectural Coatings Market, Forecast to 2023
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