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Environmental regulations, rising consumer awareness regarding health and the environment, and focus on sustainability have driven the Asia-Pacific water-based coatings market. Higher domestic consumption and investments in infrastructure across most Asia-Pacific countries will sustain this growth till 2016.
New analysis from Frost & Sullivan Analysis of the Asia-Pacific Water-based Coatings Market, finds that the market earned revenues of more than US$11.86 billion in 2012 and estimates this to reach US$16.71 billion in 2016.
Robust economic growth in China, India, Indonesia and Vietnam will, in turn, boost the Asia-Pacific water-based coatings market. Environmental regulations that aim to protect the environment and the health of citizens from potentially hazardous substances further spur the adoption of water-based coatings, particularly in China, Japan, Taiwan, South Korea and Singapore.
"Manufacturers are looking to develop economical coatings with low volatile organic compounds,” said Frost & Sullivan Chemicals, Materials and Food Consultant Lim Jin Han. "Hence, water-based coatings are growing popular in the region as paint manufacturing costs reduce when conventional solvents are replaced with water.”
However, this cost advantage has been curbed to an extent owing to rising raw material and fluctuating crude oil prices. Supply shortages have escalated the cost of titanium dioxide, affecting manufacturers’ margins in this price-sensitive market. In contrast, traditional solvent-based coatings are proving to be a profitable option as they offer better performance properties than water-based coatings.
Therefore, responding to global mega trends and delivering affordable, high-quality products with value-added functionalities are crucial. Forming strategic partnerships with local companies and suppliers will help coating vendors access new technology, enhance equity value, establish local presence, and widen their reach.
"Aggressive marketing and branding campaigns at industry exhibitions and seminars as well as advertising in trade magazines will add to market scope in Asia-Pacific,” noted Jin Han. "Investments in distribution channels, especially in high-growth markets such as China, India and Vietnam, will decrease costs and enable suppliers to respond rapidly to the diverse needs of customers.”
Japan is expected to witness a significant increase in the demand for water-based decorative coatings as earthquake reconstruction efforts gain momentum. In mature markets such as Australia and Singapore, manufacturers are focusing on product differentiation to gain an edge over the competition.