BCF blog- World Coatings Council meets the Coatings Summit in Paris

Tom Bowtell 

I spent all of last week in Paris, which sounds glamorous, but I’m now exhausted having not really had a minute to myself all week.  There are so many important networking opportunities at events like this, so you just have to keep going!

So what news to report back?  Firstly, at the beginning of the week, the coatings associations from around the world met up to discuss the key regulatory challenges facing our industry.  Ellen and Wayne were also there, and we were asked lots of questions about Brexit, and where it’s heading.  I still feel hopeful we will either get a deal done or extend the process until we can resolve things, rather than face a cliff edge Brexit with no transition period.  But we have no clarity on this, which is very frustrating for all of us. 

Something to note is that IPPIC (International Paint and Printing Ink Council) is now called the World Coatings Council.  This new name will give us better recognition, as its clear what we do in the name, but our core remit will remain the same (note the Council will still represent global issues for the printing ink sector at the UN, its just been removed from the name, as only the European associations also represent printing inks – the others only support coatings)

Sustainability was the topic of the workshop on Monday attended by Wayne – a new project is planned, to look at the UN’s 17 global sustainability goals, and see how coatings can contribute to them.  This will be published and used in discussions with the UN, NGOs and other stakeholders, to show the positive impact our industry has in many areas. 

By the end of our 2-day meeting, we have finalised and agreed our key global projects for 2019 as :

• Anti-microbial / biocides defence
• Contribute the debate on microplastics in paints and coatings
• Take part in the Responsible Mica initiative
• Fight against the TiO2 classification in Europe
• Support the UN in the Lead Paint Alliance, to get legislation passed in over 100 countries that still allow lead in decorative paint
• Work on global transport/packaging & labelling issues, and global standards
• Support the global marine and antifouling groups

Later in the week, we were joined by over 100 senior executives from the coatings industry and raw material suppliers around the world at the Coatings Summit.  The CEOs of companies such as Axalta and AkzoNobel, Dow, Dulux (Australia) and Nippon Paints made presentations, as well as other regional players, such as ICP in the USA, Teknos from Finland, Titan from Spain and Vitex from Greece.  David Beckford was there from Pronto Paints, in his role as BCF President (a first I think?), as well as Anthony Davey, the new CEO at Farrow and Ball. 

It’s interesting that despite all the consolidation and acquisitions we have seen in the last 15 years, the top 9 paint companies still have a similar share of the $135 billion global coatings market, at 45%.  Coatings remains a profitable, growing sector, with earnings above many other sectors.

Everything was, is and will be about China.  Axalta’s Chairman Charlie Shaver said that Saturday and Sunday were for thinking about M&A activity.  The rest of the week you should be thinking about China.  When you look at the statistics, its clear why. The coatings market there has tripled in volume since 2008, from 6.5 billion litres to 20 billion litres today (that’s an annual growth rate of 14%!!).  That’s 25 times bigger than the UK market.  There are 10,000 SME companies in China, and 2,000 large paint companies.    By 2021, 60% of all the coatings sold globally will be in Asia.  By 2030, this will be 70%.  I remember when Asia was the same sized market as Western Europe and North America.  Now these regions start to look dwarfed by Asia.   However, Chinese growth is slowing.  Its only going to be about 6% per year in the next few years, and the market is becoming more mature, with several global paint companies now operating 100% without JV partners.  70% of the sales in China are from Chinese companies, and 30% from overseas companies, mainly multinationals. 

All this talk of growth in China did make me think about Brexit, and our prospects for the future.  Obviously, China is huge, but it’s also a long way away, with 10,000 local SMEs for our members to compete with.   You’ve probably heard me say that with paints, coatings and printing inks, proximity matters, and I still think Europe, and other markets within easier reach will be our key export markets for several years to come.  But if we can work out how to be successful in China, that’s the key to really growing our exports.  Europe is still a good market – it a large market, but not growing much, so with each year that passes, it becomes less of a focus of our industry’s global leaders.

As you would expect in Paris, we ate lots of amazing food, and I had too many late nights, and have completely failed with my new year’s resolution to have 3 dry nights a week!

Now I’m back home, and back into the Brexit debate.  I’m speaking at an event in London tomorrow, along with Steve Elliott from CIA, several key Government officials and also two politicians we know very well – Angela Smith MP, who is SW/Ronseal’s MP in Sheffield, and Julie Girling MEP, who is speaking at our Conference event on 9th May.  Let’s hope we get some sanity soon.