SPECIALTY COATINGS APRIL 2008 HIGH-PERFORMANCE ANTICORROSION COATINGS by Eric Linak and Akihiro Kishi and Vivien Wang 2008 SPECIALTY CHEMICALS • SRI CONSULTING HIGH-PERFORMANCE ANTICORROSION COATINGS SPECIALTY COATINGS APRIL 2008 2 The information provided in this publication has been obtained from a variety of sources, which SRI Consulting believes to be reliable. SRI Consulting makes no warranties as to the accuracy, completeness or correctness of the information in this publication. Consequently, SRI Consulting will not be liable for any technical inaccuracies, typographical errors or omissions contained in this publication. This publication is provided without warranties of any kind, either express or implied, including but not limited to, implied warranties of merchantability, fitness for a particular purpose, or non-infringement. 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SRI Consulting makes no warranties as to the accuracy of any such listing, description or designation, nor to the validity or ownership of any trademark. 2008 SPECIALTY CHEMICALS • SRI CONSULTING HIGH-PERFORMANCE ANTICORROSION COATINGS SPECIALTY COATINGS APRIL 2008 3 TABLE OF CONTENTS Summary.................................................................................................................................................. 4 Introduction.............................................................................................................................................. 12 Products ................................................................................................................................................... 15 Raw Materials ...................................................................................................................................... 15 Coatings ............................................................................................................................................... 15 Technology .............................................................................................................................................. 19 Production of Coatings ........................................................................................................................ 19 Application of Coatings....................................................................................................................... 19 Overview of the Industry......................................................................................................................... 21 Structure of the Industry ...................................................................................................................... 21 United States.................................................................................................................................... 22 RPM............................................................................................................................................. 23 Sherwin-Williams........................................................................................................................ 25 PPG .............................................................................................................................................. 27 Tnemec......................................................................................................................................... 30 Western Europe................................................................................................................................ 30 Akzo Nobel .................................................................................................................................. 31 PPG (SigmaKalon) ...................................................................................................................... 35 Jotun Protective Coatings ............................................................................................................ 37 Hempel A/S ................................................................................................................................. 41 Sika (formerly DuPont Protective Coatings)............................................................................... 44 Japan ................................................................................................................................................ 45 Chugoku Marine Paints................................................................................................................ 47 Nippon Paint ................................................................................................................................ 47 Dai Nippon Toryo........................................................................................................................ 48 Kansai Paint................................................................................................................................. 49 China................................................................................................................................................ 50 Republic of Korea............................................................................................................................ 52 Rest of Asia/Middle East................................................................................................................. 53 Mergers and Acquisitions.................................................................................................................... 57 Operating Characteristics..................................................................................................................... 59 Research and Development ............................................................................................................. 59 Manufacturing.................................................................................................................................. 61 Marketing......................................................................................................................................... 62 Cost Structure and Profitability ....................................................................................................... 66 Manufacturing.............................................................................................................................. 66 Application .................................................................................................................................. 68 Government Regulations ..................................................................................................................... 74 Trends and Opportunities..................................................................................................................... 85 Critical Factors for Success ................................................................................................................. 90 2008 SPECIALTY CHEMICALS • SRI CONSULTING HIGH-PERFORMANCE ANTICORROSION COATINGS SPECIALTY COATINGS APRIL 2008 4 TABLE OF CONTENTS (concluded) Consumption and Markets....................................................................................................................... 92 Consumption by Coating Type............................................................................................................ 92 Acrylic Coatings .............................................................................................................................. 94 Alkyd Coatings ................................................................................................................................ 95 Epoxy Coatings...............................................................................................................................