Market report: Malaysia and Singapore coatings markets driven by housing demands

With such projects in place, and general strength in the Malaysian and Singaporean economies, the prospects of these two neighbouring countries’ paint market look robust. 

Also, Singaporeans are increasingly purchasing thermal paint, said Stene, in this case to help cool properties. Sales have been encouraged by the Singapore Green Towns Programme as per the country’s Green Plan which aims to build a greener Singapore in the face of climate change [5], the country’s Housing and Development Board (HDB) said in a note. As a result, Singapore’s public housing authority launched a pilot project in August 2021 in which 130 HDB apartment blocks in Tampines, eastern Singapore, were painted with cooling paint. The Green Towns Programme is a 10-year plan that focuses on sustainability and liveability by reducing energy consumption, recycling rainwater and cooling HDB residences. 

Another market researcher, India-based Mordor Intelligence, said in a report that Singapore’s architectural coatings market is consolidated, with the top five companies by sales retaining 84.25% of market share [6]. These are the Netherlands-based major AkzoNobel, Norway’s Jotun, Japan’s Kansai Paint Co Ltd and Nippon Paint Holdings Co Ltd, plus Seamaster Paint (Singapore) Pte Ltd.  

Looking ahead, Mordor said that between 2023 and 2028, Singapore’s architectural coatings sector is expected to grow by a CAGR (compound annual growth rate) of 2.7%.  

Nippon Paint Holdings regards Singapore as a key market, with Singapore’s Wuthelam Group having taken majority control of Nippon Paint Holdings in a 2020 US$11.3bn deal that raised the Singaporean company’s stake to 60% from 39%. 

Malaysia dips but housing projects give positive outlook

In the neighbouring and populous Malaysia, the home paint sector commands significant revenues. These amounted to US$160M in 2020, falling to US$150M in 2021, falling 6.1% through COVID-19 lockdowns and business restrictions that saw renovation projects and home moves postponed: “The severe economic impact of these restrictions, which led to job losses, pay cuts and high levels of uncertainty, also deterred consumers from investing in renovations or redecoration projects, such as painting and even from moving home,” said Stene. Moreover, interest rate hikes and inflationary pressures made Malaysians increasingly cost-conscious in 2022, favouring cheaper do-it-yourself options such as decorating and repainting over more complex renovations, with a pent-up demand for refreshing the home, he said. 

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But the fundamentals of the Malaysian coating sector remain solid, according to a study by US, India and United Arab Emirates-based Verified Market Research, which said that the country’s booming construction industry “is a major factor driving the market.” It added: “Malaysia’s growing demand for protective coatings is expected to boost the market even more.” 

Industrial demand from the country’s diversified industrial base including aerospace, automotive and marine sectors are also driving sales: “With the introduction of electric cars, autonomous vans, and self-driving vehicles and trucks, the automotive industry is poised to experience a seismic change in the future, with increased production rates,” it added. 

Companies performing strongly in the Malaysian market, include Norway’s Jotun, the USA’s PPG Industries, the Netherlands’ AkzoNobel, Malaysia-based Colourland Paints and Sisson Paints, amongst others, said a report from India and USA-based Inkwood Research. 

The economy ministry’s department of statistics said the value of construction work undertaken in the third quarter of 2022 grew by 23.2% compared to the same quarter of 2021. Out of Malaysian Ringgit MYR32bn (US$7bn) of work undertaken in the fourth quarter of 2022, 37.9% was in civil engineering, followed by non-residential buildings with a share of 30.1% [7].  

Despite this and reflecting Euromonitor’s comments, another leading industry player, Nippon Paint Malaysia, expects growth for the Malaysian construction sector to slow this year (2023) through labour supply issues and increased operational costs.  

Nippon Paint Malaysia Group Managing Director Yaw Seng Heng said the country’s construction and property sector may focus on maintenance as a result: “As it is imperative for companies to adapt, we suggest market players consider all options for a smooth sailing year. We always must be on our toes and be alert to changes in consumer patterns,” said Yaw in a corporate statement to Malaysian media in January.  

The company has been diversifying its output through acquisitions. It bought Malaysia’s CMI Construction Material Industry Sdn Bhd (CMI) and CMI Marketing Sdn Bhd (CMIM) in February 2022 “to diversify its product portfolio in cementitious dry-mixed pre-packed additives, skim coat, plasters, tile adhesives, waterproofing and technical mortars”. In a statement, Nippon Paint Malaysia said the purchase had strengthened NPM’s positioning as a “total coatings and construction solutions (TCCS) provider, providing compatible solutions from the floor up to the roof.” 

Nippon Paint Malaysia General Manager Tay Sze Tuck told Malaysian newswire Bernama in April that through TCCS, developers and contractors can deal with its own corporate services for coatings purchases and applications, simplifying projects: “It gives them peace of mind as they do not have to worry about the extra cost they need to incur,” said Tay.  

Yaw also foresees growth opportunities in providing services to government infrastructure projects, which are being targeted by the new Malaysian government of Prime Minister Anwar Ibrahim, which took power last November (2022), including a priority of building low-cost housing for lower income groups in the capital Kuala Lumpur [8].  

Malaysia’s government has allocated MYR5bn (US$1bn) in its 2023 budget for subsidising such housing projects and funding accommodation incentives such as the The People’s Housing Program (PPR) and the Rumah Mesra Rakyat scheme and Malaysian Public Housing Projects, which will see more 35,000 new houses built for lower-income Malaysians and 7,000 for the armed forces. 

With such projects in place, and general strength in the Malaysian and Singaporean economies, the prospects of these two neighbouring countries’ paint market look robust. 

For more information, please contact: Keith Nuthall, International News Services:

Tel: +44 (0) 207 193 4888; Email: [email protected]

REFERENCES

1 – https://data.worldbank.org/country/MY 

2 – https://www.mof.gov.my/portal/en/news/press-citations/strong-8-7-gdp-growth-for-2022-shows-restored-confidence-in-national-economy-anwar#:~:text=Malaysia’s%20economy%20recorded%20an%20encouraging,economic%20growth%20achieved%20in%202021.  

3 –https://data.worldbank.org/country/SG 

4 – https://www.mti.gov.sg/Newsroom/Press-Releases/2023/01/Singapore-GDP-Grew-by-2_2-Per-Cent-in-the-Fourth-Quarter-of-2022-and-by-3_8-Per-Cent-in-2022 https://data.worldbank.org/country/SG 

5 – https://www.greenplan.gov.sg/#:~:text=What%20Does%20The%20Green%20Plan,zero%20emissions%20aspiration%20by%202050  

6 – https://www.mordorintelligence.com/industry-reports/singapore-architectural-coatings-market 

7 – https://www.dosm.gov.my/portal-main/release-content/c4c44586-8b7d-11ed-96a6-1866daa77ef9 

8 – https://www.malaysianow.com/news/2023/06/06/affordable-housing-projects-in-kl-to-be-made-mandatory-says-anwar