Paint is Everywhere!
Paint is a coloured substance commonly used to preserve, decorate surfaces and protect them from damage.
Paints can be used in a wide variety of applications such as interior and exterior building painting, planes, toys, furniture, cars, wood, metal and many other things where protection and appeal are needed.
Traditional solvent-borne paints comprise of three main components: the pigment, the binder, and the solvent. Additives are also used in small quantities to enhance the paint’s properties and performance in various ways. For example, additives can be used to provide mold resistance, scuff resistant and help with brushing and drying.
Water-borne paints, which have dominated the marketplace in recent years, have similar components to solvent-borne paints. However, they differ as they use water as the primary solvent to disperse the resin added to it.
The Paints and Coatings Industry
As an overview, the paints and coatings industry is one of the most heavily regulated industries in the world.
The sector consists of manufacturers of paints, varnishes, lacquers, shellacs, stains and a variety of other specialty coatings. It can be divided into three major groups which are:
- Architectural segment
- Industrial paints and coatings segment
- Major appliances, industrial equipment, and specialty paints and coatings.
What’s Driving the Growth in the Market?
According to a report by ResearchAndMarkets.com, in the next five years, the global paints and coatings market is set to experience extensive growth. The market is projected to reach USD 223.89 billion by the end of 2023, growing at a CAGR of 4.46% during the forecast period 2018-2023.
This growth is largely being fuelled by factors such as increasing strength in the building and construction markets, widespread urbanisation, rising household expenditure, and surging economic growth.
At the same time, increasing demand from the construction sector in the Asia-Pacific region is also expected to boost the growth during the forecast period.
Challenges Facing Paint and Coatings Manufacturers
Despite the positive outlook for the industry, the sector continues to face numerous challenges, which pose a considerable risk to the profitability of paint and coatings manufacturers.
Some of the challenges include continuously rising raw material costs and stringent environmental regulations due to the presence of volatile organic compounds (VOCs) in paints and coatings products.
However, this blog article is focusing on the rising raw material costs and how paint and coatings manufacturers can respond to this challenge. For information about the paints and coatings industry and VOC environmental regulations, then check out the following blog articles:
- A Glossy Future for Paints and Coatings Manufacturers
- Contamination and Cross-Contamination in Paint Manufacturers
Raw Material Costs Having an Impact on Prices
One of the biggest issues currently facing the paints and coatings industry is volatile raw material prices.
The reason for the volatility is due to the unexpected high demand in regions such as Asia as well as uncertainty in Western Europe and North America. The closure of some production plants in The USA, Europe, and Asia, due to failures, maintenance work and accidents, have also resulted in the prices of raw materials increasing.
In turn, these factors have resulted in the raw material supply markets gradually tightening, which has impacted raw material pricing.
Solvents Most Affected in the UK
In the UK, higher prices have been most common for solvents, with most products increasing by 20% to 30%. For instance, Xylene prices are roughly 22% more expensive than they were a year ago. Toluene and SBP prices are also more expensive (by more than 20%).
At the same time, Epoxy Resin prices have also surged by 25% in the past 12 months along with pigments, extenders and packaging prices. Titanium Dioxide (TiO2), a pigment used for producing white paint, is also facing price hikes. In fact, TiO2 prices reached £2,500 per tonne in 2017, which is 50% more than the average for 2016.
What are Paints and Coatings Manufacturers Doing about the Price Hikes?
Commodity costs are extremely important for paint and coatings manufacturers. This is because more than half of operating costs are allocated to raw materials. Therefore, it is inevitable that these commodity price hikes will have a major impact on the profitability and the resilience of paint and coatings companies.
While in the past few years, paint and coatings companies have been absorbing the increasing cost of raw materials, there is a limit to how much can be absorbed.
So, it comes as no surprise that many large paint manufacturers, in a bid to offset some of the increasing costs, recently announced price increases.
Paint Manufacturers Implementing Cost-Reduction Technologies and Strategies
As well as increasing prices, many manufacturers are implementing cost reduction strategies and innovative technologies that significantly impact their bottom line. One of these technologies is liquid product recovery (also known as ‘pigging’).
Pigging systems recover residual product from process system pipelines, that would otherwise be wasted. Pigging systems (well HPS ones anyway!) are bespoke and tailored around the exact requirements of each customer.
Typically, pigging equipment consists of a specialist projectile (the ‘pig), components to launch and receive the pig, pig tracking devices and software to control the system (as most systems tend to be automated). Here’s how to find out about the different types of pigging systems.
Recouping Some Costs by Pigging
Because pigging recovers nearly all of the product remaining in the line after transfer, this significantly increases yields and provides major cost savings. Quite simply, higher yields from pigging mean reduced waste, more efficiency, better productivity and increased profits which all improve a company’s bottom line.
What’s more, because pigging systems tend to be automated, in most cases they nearly always pay for themselves in less than 12 months as a result of reduced labour costs, more efficient changeovers and maintenance, and less downtime.
As well as using pigging, some paint companies use liquid transfer technology such as the HPS Automatrix. The technology improves efficiency, speeds up processing, enhances safety and minimises risks.
Paints and Coatings Companies and Reducing Contamination Risks
Because the HPS process pig has extremely high recovery rates (up to 99.5%), this also helps reduce the risks of bacterial contamination.
In paints and coatings manufacture, a warm and wet environment encourages bacterial growth. Therefore, one of the keys to the prevention of bacterial contamination is by providing a hygienic and dry environment.
HPS systems are fully sanitary (and in wide use in food and beverage processing). Because they remove the residual product from the pipelines, this helps prevent the accumulation of paint residue on the internal wall of the pipelines. In turn, this reduces the risks of bacterial contamination. At the same time, it also limits the chances of spoiled products reaching the customer, which would be detrimental and could result in significant economic loss to the manufacturer.
Find Out More
HPS Product Recovery Solutions is the world’s leading specialist in liquid product recovery, transfer, and hygienic and sanitary pigging systems for paints and coatings manufacturers. HPS’s other key industries include food, beverage, confectionery, pet food, personal care, cosmetics, and home care.
For help or advice on increasing profits, increasing yields and reducing costs by using product recovery and pigging products, please get in touch.