Pigments market panel discussion

Coatings World, Jan, 2009 by Tim Wright

For this year's annual pigments market update, Coatings World asked a panel of experts to address key issues facing the market including the economy, new technology and strategies for moving forward in 2009. The panel is made up of individuals from some of the world's largest and most diverse pigment suppliers including BASF, Ciba, Clariant, Heucotech, Sun Chemical and Toyo Ink.

Coatings World (CW): How did the pigments market perform in 2008? How does this compare to 2007 and what are your predictions for 2009?

Thierry Chevrier, director of performance chemicals----coating, plastics and specialties--for BASF in North America: The second half of 2008 was difficult as the economic situation began to impact consumers, especially in the automobile and housing sectors. For 2009, pigment suppliers will have to continue to offer value-added solutions that take into account the "total cost" mindset of coatings producers. The ability to innovate and bring cost-effective solutions to the industry will be the key to success going forward.

Bernadette Corujo, director of NAFTA marketing, coatings, Ciba Corporation: The pigments market tracks the coatings market overall. 2008 was a difficult year for several segments of the coatings market and by extension the pigments market. Pigment growth slowed in 2008 versus 2007 mainly due to the slowdown in coatings demand in the fourth quarter of the year. 2009 will likely remain challenging through the first half of the year.

Falko Orlowski, coatings business manager, North America, Clariant Corporation: Clariant experienced the first three quarters of 2008 flat against 2007 year. A significant downturn was seen in the fourth quarter, which we expect to continue into 2009.

Don McBride, COO, Heucotech Ltd.: Globally, the first half of 2008 fared much better than expected despite challenges related to escalations of energy and raw material costs. Industrial applications in the area of corrosion protection continued at the brisk growth pace of 2007 while all markets related to the building industry were down more than ten percent in Southern Europe and NAFTA. This obviously had a negative effect on pigment sales to the related decorative coatings, construction and plastic applications. Specialty areas, such as powder, ceil and high performance coatings, continued to grow in the eastern regions of the world, however at a slower pace than the prior year. The last two months of 2008 based on the present economic climate have affected us globally, with NAFTA slower than other regions for 2008.

Mehran Yazdani, vice president, marketing, performance pigments, Sun Chemical: While there continues to be positive strong trends toward the usage of high performance and effect pigments, overall 2008 was a challenging year for the pigments market worldwide. The U.S. is currently one of the most challenging regions of the world for the pigments market thanks primarily to a struggling automotive market and housing slump that has led to a decline in automotive sales, home building and therefore paint use. Similar challenges in the automotive and architectural markets can be found in Europe and Asia as well.

Chris Whiston, marketing manager, pigments, Toyo Ink Mfg. America: Toyo Ink Mfg. America did not increase pigment prices to coatings manufacturers in North America in 2008 nor add fuel surcharges. We are watching 2009 carefully and it is difficult to make forecasts but we believe price volatility will be high and currency exchange rates may be important.

CW: What are the major trends and challenges influencing the global pigments market today?

Chevrier, BASF: One of the key trends in the market is the increasing demand for heat management solutions. BASF has a broad portfolio of pigments and additives that provide solar energy management solutions, including near-infrared (NIR) reflective pigments, NIR transparent organic pigments, and stir-in pigment dispersions and additives for transparent applications. Another trend is the need for universal high performance pigments that are compatible in broad applications.

Corujo, Ciba: A major challenge for the pigments market today is the continued slowdown in the economy depressing demand for durable goods that require coatings during manufacture. The decline in the U.S. housing market also impacted pigment demand. Additionally, in a down economy consumers and businesses will delay non-essential expenditures like coatings. This decreased demand in addition to the unprecedented increases in raw material costs we saw in 2008 has impacted every level of the value chain for pigments. Likewise currency fluctuations have advantaged some suppliers and disadvantaged other suppliers of pigments. This has led to both consolidation and new entrants in the pigments market as suppliers try to predict the future. Pigment manufacturers that have a global footprint have the best ability to weather these dynamic conditions. The changing landscape of pigment suppliers will likely continue in 2009.