Industry News, Coatings
It’s time again for PCI’s annual ranking of the top 10 global and top 25 paint and coating manufacturers. The ranking is based on 2016 coatings sales. Sales of other noncoating products are not included.
Coatings Sales (Net): Approx. $14.3 billion
PPG’s global coatings businesses comprise coatings for the aerospace, architectural, automotive OEM, automotive refinish, industrial, packaging, protective and marine, and specialty markets, along with coatings services. The company serves customers in markets and aftermarkets for transportation, industrial, consumer products and construction.
In 2016, PPG delivered full-year adjusted earnings per diluted share from continuing operations of $5.82, up about 7% year-over-year. Coatings represented about 97% of PPG’s 2016 total net sales from continuing operations of $14.8 billion, consistent with the prior year. Of this total, the company’s Performance Coatings segment (aerospace, architectural coatings – Americas and Asia Pacific; architectural coatings – EMEA (Europe, Middle East and Africa); automotive refinish, and protective and marine coatings businesses) saw about $8.55 billion in total net sales, and its Industrial Coatings segment (automotive OEM coatings, coatings services, industrial coatings, packaging coatings, and specialty coatings and materials businesses) saw about $5.75 billion.
The company’s results remained consistent year-over-year in 2016, despite a more challenging global economic environment and growing geopolitical uncertainty in many of the regions where it operates, and thanks to earnings-accretive cash deployment and a strong focus on costs. Sales increased by about 3% in local currencies.
PPG continued to execute on strategic objectives through the year, with accretive expansion of its coatings portfolio through the completion of four acquisitions, as well as the continued transformation of its overall portfolio with the divestitures of its flat glass and European fiberglass businesses as well as its ownership interest in two Asian fiberglass joint ventures. The company deployed nearly $350 million in cash for its 2016 acquisitions, notably the acquisition of coatings-services company MetoKote in July.
To continue driving organic growth, the company invested to expand and upgrade operations in locations such as Allison Park, Pennsylvania; Zhangjiagang, China; Tianjin, China; Oak Creek, Wisconsin; and Delfzijl, Netherlands.
Source: 2016 Annual Report, company website, company contact
Notes: Michael H. McGarry became PPG’s Chairman, in addition to being Chief Executive Officer, in September 2016.
In April 2017, PPG purchased the remaining 50% ownership interest in its Asian joint venture comprising IVC (Malaysia) Sdn Bhd and IVC-OPS (Singapore) Pte. Ltd. from its joint-venture partner, Omni-Plus System Pte. Ltd. Also this year, the company acquired certain assets of automotive refinish coatings company Futian Xinshi, a privately owned automotive refinish company based in the Guangdong province of China. In January, the company announced it had completed its acquisition of DEUTEK S.A., a leading Romanian paint and architectural coatings manufacturer.
Coatings Sales: $10 billion (€9.5 billion)
AkzoNobel is a global leader in the manufacture of paints and coatings, as well as a major specialty chemicals producer. With operations in more than 80 countries, AkzoNobel employs 46,000 people around the world with over 200 production sites.
AkzoNobel is organized into three business units: Decorative Paints, Performance Coatings and Specialty Chemicals. In 2016, the company recorded revenue of €14.2 billion, with Decorative Paints representing 27% (€3.835 billion), Performance Coatings representing 40% (€5.665 billion) and Specialty Chemicals accounting for 33% (€4.783 billion) of sales. Main business operations within the Decorative Paints business unit include: Decorative Paints Europe, Middle East and Africa; Decorative Paints Asia; and Decorative Paints Latin America. Brands for this business unit include Coral, Dulux, Flexa, Hammerite, Sadolin and Sikkens. Main business operations within the Performance Coatings business unit include Automotive and Specialty Coatings, Marine and Protective Coatings, and Industrial and Powder Coatings. Brands include Awlgrip, International, Interpon and Sikkens.
In terms of regional sales, North America accounted for 17% of sales in 2016, Mature Europe accounted for 36%, Emerging Europe accounted for 7%, Asia-Pacific accounted for 27%, Latin America accounted for 9%, and other regions made up 4% of sales.
Source: AkzoNobel Annual Report 2016, press releases
Notes: In July 2016, AkzoNobel announced that it had raised its stake in Akzo Nobel Powder Coatings SAE in Egypt from 60% to 100%. The transaction forms part of the company’s accelerated growth strategy for Egypt and the wider North Africa region.
In December 2016, the company finalized the acquisition of BASF’s global Industrial Coatings business, which supplies a range of products for industries including construction, domestic appliances, wind energy and commercial transport. The transaction includes relevant technologies, patents and trademarks, as well as two manufacturing plants in the United Kingdom and South Africa.
In February 2017, the company announced a €12.6 million investment in a new innovation hub in the UK. Located in Felling, the facility will be home to teams of scientists and technical experts who will work on developing protective coatings for the energy, mining, infrastructure, and oil and gas industries. The main focus will be on delivering cutting-edge innovations and efficiencies for protecting steel and concrete structures from damage caused by corrosion, abrasion and fire.
In April, in response to an attempt by PPG to purchase the company, AkzoNobel announced plans to spin off its chemicals business.
3. The Sherwin-Williams Co.
Coatings Sales: Approx. $8.90 billion
The Sherwin-Williams Co. manufactures and sells coatings and related products to professional, industrial, commercial and retail customers primarily in North and South America. The company operates 4,180 paint stores in the United States, Canada, and the Caribbean. It has 339 stores and 21 facilities in Latin America. Founded in 1866 by Henry Sherwin and Edward Williams, the company marked its 150th anniversary in 2016.
The company has four operating segments: Paint Stores Group, Consumer Group, Latin America Coatings Group and Global Finishes Group. The company’s Paint Stores Group operates exclusive outlets for the company’s paints and stains, as well as supplies, equipment and floor coverings. This group covers the United States, Canada and the Caribbean. The Latin America Coatings Group manufactures and sells architectural and industrial coatings and related products in Latin America. The Consumer Group sells a portfolio of branded and private-label products in North America and parts of Europe and Latin America. This group also operates a global supply chain for coatings and related products. The Global Finishes Group manufactures and sells OEM finishes, protective and marine coatings, and automotive finishes. It has a customer base in more than 100 countries.
Sherwin-Williams reported total consolidated sales for 2016 of approximately $11.86 billion, a 4.6% increase over 2015. It is estimated that between 70 to 75% of sales, or about $8.90 billion, represents coatings sales, with the remainder being related products, including wallcoverings, floor coverings and application supplies. The company’s Paint Stores Group reported nets sales of $7.79 billion for 2016, which represents an increase of 8.1% compared to 2015. Comparable store sales, sales of stores open more than 12 months, increased 5.3% during 2016. The company opened 94 net new locations in this group in 2016.
The Latin America Coatings Group posted net sales of $586.9 million in 2016, a decrease of 7% compared to 2015, due in part to unfavorable currency exchange rates in many Latin American countries. The company reported a net increase in company-operated stores in this group of 48 locations.
The Consumer Group posted sales of $1.58 billion in 2016, a decrease of 0.4% compared to 2015. The company attributed the decrease to unfavorable currency translations and weak demand for stains and sealer products in Europe.
The Global Finishes Group has net sales of $1.89 billion in 2016, a decrease of 1.4%, due to foreign currency devaluation that decreased sales by 2.6%. The group posted growth in profit of 18.4% in 2016.
Sherwin-Williams manufactures and sells coatings such as Sherwin-Williams®, Dutch Boy®, HGTV HOME® by Sherwin-Williams, Krylon®, Minwax®, and Thompson’s® Water Seal, plus private-label brands to independent dealers, mass merchandisers and home-improvement centers. Sherwin-Williams produces coatings for original equipment manufacturers in a number of industries, and special-purpose coatings for the automotive-aftermarket, industrial-maintenance and traffic-paint markets.
Source: 2016 Annual Report, company website, press releases
Notes: At the end of 2016, Chris Connor retired from his position as Executive Chairman, following a 34-year career with the company. The company’s board of directors elected John. G. Morikis to assume the additional role of Chairman, effective January 1, 2017.
In June 2017, the company announced it had completed its purchase of The Valspar Corp. for $113 per share in an all-cash transaction. In April of this year, Sherwin-Williams and Valspar announced an agreement to sell Valspar’s North American Industrial Wood Coatings business to Axalta Coating Systems in a deal worth $420 million.
4. RPM International Inc.
Coatings Sales: $4.81 billion for fiscal year ended May 31, 2016
RPM owns subsidiaries that are world leaders in specialty coatings, sealants, building materials and related services across three segments. RPM’s industrial products include roofing systems, sealants, corrosion-control coatings, flooring coatings and other construction chemicals. Industrial companies include Stonhard, Tremco, illbruck, Carboline, Flowcrete, Euclid Chemical and RPM Belgium Vandex. Professionals and do-it-yourselfers for home maintenance and improvement, as well as hobbyists, use RPM’s consumer products. Consumer brands include Rust-Oleum, DAP, Zinsser, Varathane and Testors. RPM’s specialty products include industrial cleaners, colorants, exterior finishes, specialty OEM coatings, edible coatings, restoration services equipment, and specialty glazes for the pharmaceutical and food industries. Specialty segment companies include Day-Glo, Dryvit, RPM Wood Finishes, Mantrose-Haeuser, Legend Brands, Kop-Coat and TCI.
Subsidiaries: A/D Fire, Alteco Technik, API, Ascoat Contracting, Betumat, Carboline, Chemtec Chemicals, Citadel Restoration and Repair, Dane Color, DAP, DAP Canada, Day-Glo, Dryvit, Euclid Chemical, Eucomex, Expanko, FEMA, Fibergrate, Fibregrid, Flowcrete, Grupo P&V, HiChem, Hummervoll, Increte Systems, Kirker, Kop-Coat, Krud Kutter, Legend Brands, Mantrose-Haeuser, Martin Mathys, Modern Masters, New Parks, Paramount Technical, Pettit, Productos Cave, Productos de DAP, Radiant Color, Republic Powdered Metals, RPM Belgium Vandex, RPM Wood Finishes Group, Rust-Oleum, Rust-Oleum Argentina, Rust-Oleum Canada, Rust-Oleum Japan, Rust-Oleum Netherlands, Specialty Polymer Coatings, Spraymate, SPS Group, Stonhard, TCI, Testors, Tor Coatings, Toxement, Tremco Barrier Solutions, Tremco illbruck, Tremco Inc., Universal Sealants, ValvTect, Vandex, Viapol, Watco, Weatherproofing Technologies, Wolman and Zinsser.
Parent Company: RPM International Inc.
Source: Company contact, 2016 Annual Report, press releases
Notes: Recent transactions include the acquisitions of Duram Industries, an Australian manufacturer of commercial waterproofing products; Applied Polymerics, a specialist civil engineering and construction organization; Specialty Polymer Coatings, a Canadian manufacturer of coatings for the global oil and gas pipeline market; Adhere Industrial Tapes, a producer of foam tapes used in construction and industrial applications; SPS Group, a Dutch decorative and specialty coatings company; the foam division of Clayton Corp., best known for its Touch ‘n Foam brand; Prochem, a manufacturer of equipment and specialty chemicals for cleaning and restoring flooring surfaces; Arnette Polymers, a manufacturer of resins, hardeners, curing agents and other intermediaries; and Prime Resins, a manufacturer of specialty chemicals and equipment for infrastructure. RPM increased its cash dividend for the 43rd consecutive year in October 2016.
5. Nippon Paint Holdings Co.
Coatings Sales: $4.3 billion
Since its inception in 1881, Nippon Paint has experienced over 135 years of growth through innovation and has become one of the world’s major automotive and decorative paint suppliers. It produces coatings for the automotive and marine markets, as well as for industrial products. It also makes paints for residential and commercial buildings, and for the DIY market. Nippon Paint is also a leader in the surface treatment market with a wide range of products that provide coating improvements in the areas of anticorrosion, film adhesion and durability.
Nippon Paint has four operating companies: automotive paints, industrial-use paints, trade-use paints and surface treatments. This was the result of a consolidation of various joint ventures and it establishes Nippon Paint as the largest paint manufacturer in Asia. While the majority of its 68 production facilities are located in Asia, there are also multiple facilities in Europe, North America and South America.
In the United States, it has three subsidiaries under holding company Nippon Paint (USA) that manufacture and sell coatings: NB Coatings (market leader for coatings for plastic automotive components) and NPA Coatings (automotive pretreatment and body coatings). In March 2017, Nippon Paint completed the purchase of Dunn-Edwards Corp., one of the largest independent manufacturers of architectural, industrial and high-performance paints. This acquisition will contribute to Nippon Paint’s mission of becoming a major player in the global paint market.
Source: Company contact
6. Axalta Coating Systems
Coatings Sales: $4.1 billion
Axalta Coating Systems is a leading global supplier of transportation and performance coatings serving four main sectors. For light-vehicle OEMs, Axalta provides Harmonized Coating Technologies™ including its Eco-Concept, 3-Wet and 2-Wet Monocoat coating systems, and the latest coating formulations such as the company’s Vermeera™ high-chroma technology.
With the Imron® portfolio, Excel® Pro, Rival® and other coating brands, Axalta provides coatings to heavy duty truck, bus, rail and other commercial vehicle OEMs around the globe.
For refinish customers, the company offers its premium flagship global brands, Cromax®, Spies Hecker® and Standox®, as well as mainstream products such as Challenger®, Nason®, Imlar® and Duxone® sold in a number of countries.
Axalta serves a wide variety of industrial customers with a number of leading brands including AquaEC™ electrocoat products, Alesta® and Abcite® powder coatings for architectural and other applications, Nap-Gard® powder coatings for oil and gas pipelines, and Energy Solutions coatings including Voltatex® electrical insulation coatings.
On six continents, Axalta operates 36 manufacturing centers, four major R&D facilities, and 46 Customer Learning and Development centers for refinish technicians.
Parent Company: Public company NYSE: AXTA
Source: Axalta Coating Systems
Notes: In 2015, Axalta Coating Systems announced construction of a Global Innovation Center to be built at The Navy Yard in Philadelphia to serve as the hub of the company’s R&D network. It also announced construction of a new Asia-Pacific innovation center in Shanghai to support product development and customer service across the region. The company opened expanded production facilities in Wuppertal, Germany, for the manufacture of waterborne coatings in Europe, the Middle East and Africa, and announced construction of expanded production facilities and a color development center at the company’s manufacturing center in Savli, Gujarat State, India. Axalta also announced construction of an expanded resin production facility in Tlalnepantla, Mexico, and plans to build a manufacturing center near Buenos Aires, Argentina.
In product news, the company’s Abcite powder coatings received NSF/ANSI 61 certification for use in drinking water system components, and its Voltatex 4204 electrical insulation coatings received UL global certification. Axalta launched a new epoxy primer TRPE35™ for the trailer industry, new Rival products for the economy commercial transportation market, Ganicin® zinc-rich coatings, and a new Corshield® alkyd system in Colombia. The company also introduced the Alesta AR400 innovative color palate.
In July 2016, the company purchased the automotive interior rigid thermoplastics coatings business of Michigan-based United Paint and Chemical Corp.; High Performance Coating Sdn. Bhd., a leader in refinish coatings in Southeast Asia; and Dura Coat Products, a manufacturer of coatings for metal coil and related markets in North America. In August 2016, the company acquired the business of Geeraets Autolak, a distributor of Axalta’s Cromax® refinish coating products in the Netherlands for nearly 40 years. In January 2017, Axalta Coating Systems announced the acquisition of the business of Ellis Paint Co., a manufacturer of industrial and automotive refinish paint in North America. Founded in 1887, Ellis Paint Co. manufactures and distributes a portfolio of coating products for an array of industrial applications and substrates including steel, concrete and wood, shipping vessels and construction equipment, and indoor and outdoor furnishings and fittings. In April of this year, the company announced the planned acquisition of the assets related to Valspar’s North American Industrial Wood Coatings business for $420 million in cash. The business is one of the leading providers of coatings for OEM and aftermarket industrial wood markets, including building products, cabinets, flooring and furniture, in North America. In May 2017, the company announced it had signed an agreement to acquire the Spencer Coatings Group, a manufacturer of high-performance industrial coatings for heavy-duty equipment, general industrial, oil and gas, and glass coatings segments. Established in 1909, Spencer Coatings Group is the largest independent industrial coatings manufacturer in the UK.
7. The Valspar Corp.
Coatings Sales: $4 billion
Valspar operates its coatings-related businesses in two reportable segments: Paints and Coatings. Sales in the Coatings segment were $2.4 billion in 2016, down 4.3% from 2015. Sales in the Paints segment were $1.6 billion, down 5.8% from 2015, for total coatings sales of $4 billion. Valspar’s Paints segment includes consumer paint products in North America, Australia, New Zealand, China and Europe, as well as automotive refinish. Global brands in the Paints segment include Valspar, Huarun, Wattyl, Solver, Cabot, PlastiKote, Guardsman and Devine Color. Auto refinish brands include De Beer and House of Kolor (consumer paints) and Valspar, De Beer, House of Kolor and Octoral (auto refinish). The Coatings segment includes four product lines: packaging, general industrial, coil and wood coatings.
Source: 2016 Annual Report, company website
Notes: In March 2016, Valspar announced an agreement with Sherwin-Williams in which Sherwin-Williams would acquire Valspar for $113 per share in an all-cash transaction. The deal was finalized on June 1, 2017. In April of this year, the company announced, with Sherwin-Williams, an agreement to sell its North American Industrial Wood Coatings business to Axalta Coating Systems in a deal worth $420 million.
8. BASF Coatings
Coatings Sales: Approx. $3.6 billion
BASF Coatings is a division of BASF SE. The Coatings division of BASF is a global expert in the development, production and marketing of innovative and sustainable automotive OEM and refinish coatings, as well as decorative paints. The company operates sites in Europe, North America and South America as well as Asia-Pacific. Within this network, it collaborates closely with customers all over the world. In 2016, BASF’s Coatings division achieved global sales of about €3.2 billion.
Parent Company: BASF SE
Source: Company contact, press releases, company website
Notes: BASF will strengthen its local production capability for waterborne and solventborne coatings in Thailand by building a new manufacturing facility at its Bangpoo site. The new production facility complements the facilities at the new Coatings Technical Competence Center ASEAN, which was opened in September 2015 and includes a laboratory for product development, performance testing, color design, as well as a small-batch production unit. The expansion will better serve the strong demand from the expanding automotive industry in ASEAN.
In June 2016, BASF Shanghai Coatings Co. Ltd. broke ground on a new, world-scale automotive coatings plant at the company’s existing site at the Shanghai Chemical Industry Park in Caojing, Shanghai, China. The new plant represents an investment of around €140 million and is expected to start operation in the fourth quarter of 2017. As the latest investment of the joint venture between BASF and Shanghai Huayi Fine Chemical Co. Ltd., the new plant is an expansion of the automotive coatings plant, which began production in 2014 at the same site.
In September 2016, BASF completed the acquisition of the assets of Guangdong Yinfan Chemistry Co. Ltd. (Yinfan) in China. A new legal entity, named BASF Coatings (Guangdong) Co. Ltd., has been established in Jiangmen, Guangdong Province, to take over and further develop Yinfan’s automotive refinish coatings business. The acquisition enables BASF’s Coatings division to broaden its automotive refinish portfolio in Asia-Pacific by adding the Yinfan line of products to its global brands including Glasurit®, R-M®, baslac® and NORBIN®.
In December 2016, BASF acquired Chemetall, a leading global supplier of applied surface treatments for metal, plastic and glass substrates in a wide range of industries and end markets. With this expansion in its portfolio, BASF becomes a more complete solution provider for coatings.
In December 2016, BASF has completed the sale of its global industrial coatings businesses to AkzoNobel. The transaction includes technologies, patents and trademarks, as well as the transfer of dedicated production sites in Deeside, UK, and Vanderbijlpark, South Africa.
9. Kansai Paint Co. Ltd.
Coatings Sales: Approx. $2.9 billion for fiscal year ended March 31, 2016
Founded in 1918, Kansai Paint Co. Ltd. is one of the largest coatings manufacturers in Japan and Africa, with leading market positions in India, China and Southeast Asia. The company also has operations in Europe, the Americas and the Middle East. Core business areas include automotive coatings, industrial coatings, decorative coatings, and marine and protective coatings. Product sales in the Automotive Coatings business accounted for 38% of sales. The Industrial Coatings business accounted for 25% of sales, the Decorative Coatings business accounted for 25% of sales, and the Marine and Protective Coatings business accounted for 7% of sales.
Source: Annual Report, press releases
Notes: In February 2017, the company announced that its consolidated subsidiary, Kansai Plascon Africa Ltd., purchased shares of the Sadolin Group, which manufactures decorative and industrial coating that are sold in East Africa. In December 2016, Kansai Paint made a deal to purchase Slovenia-based Helios, making it the center of the Kansai operations in Europe. In October 2016, the company announced plans to purchase shares of paint companies in Turkey (Polisan Boya Sanayi ve Ticaret A.S.) and Malaysia (Sancora Paint Industries Sdn Bhd). In August 2016, the company announced the stock purchase of the Saudi Industrial Paint Co., a paint manufacturer that develops anticorrosion paints in Saudi Arabia.
10. Asian Paints Ltd.
Coatings Sales: Approx. $2.16 billion for sales ended March 31, 2017
Founded in 1942, Asian Paints is India’s largest paint company and ranked among the top decorative coatings companies in the world. The company and its subsidiaries have operations in 19 countries across the world with 26 paint manufacturing facilities serving consumers in 65 countries. Subsidiaries include Berger International, SCIB Paints – Egypt, Asian Paints, Apco Coatings, and Taubmans and Kadisco.
Source: 2016-17 Annual Report, company website
THE PCI 25
Following is a ranking of the top 25 North American coatings manufacturers in 2016.
Rankings are based on 2016 coatings sales. Sales of other, noncoating products are not included.
|2||The Sherwin-Williams Co.||$8.9 b|
|3||RPM International Inc.||$4.81b|
|4||Axalta Coating Systems||$4.1 b|
|5||The Valspar Corp.||$4.0 b|
|6||Behr Process Corp.||$1.84 b|
|7||Benjamin Moore & Co.||$1.3 b|
|8||Nippon Paint (USA)||$900 m|
|10||Shawcor Ltd.||$278 m|
|11||Kelly-Moore Paint Co., Inc.||$270 m|
|12||Cloverdale Paint Inc.||$231 m|
|13||Innovative Chemical Products (ICP) Group||$220 m|
|14||Diamond Vogel Paint Inc.||$168 m|
|15||Yenkin-Majestic Paint Corp.||$150 m|
|16||Tnemec Company Inc.||$118 m|
|17/18||ELANTAS PDG Inc.||$100 m|
|17/18||True Value Company||$100 m|
|19||Vista Paints||$90-110 m|
|20||Hentzen Coatings Inc.||$90-100 m|
|21||IGER Drylac U.S.A. Inc.||$63.4 m|
|22||Gemini Industries||$60 m|
|23||Suncoatings Inc.||$57 m|
|24||Farrell-Calhoun Inc.||$38.8 m|
|25||Lanco Paints & Coatings||$21 m|