Page 196 - CW E-Magazine (26-9-2023)

Special Report

an exception. It is a fragmented market,
with top-5 players accounting for only
~30% of market share.

One reason for the fragmented
nature of the powder coatings markets
is the diversity in the end-markets and
how the customers in these markets
need to be served.

Select segments such as auto-
motive, ACE and high-end architectural
are OEM dominated. Extensive qualifi-
cations are needed in such segment and
performance requirements are strin-
gent. In these segments, it is important
to have track record and credentials to
gain business. Kansai acquired Helios in 2016. In March 2020, PPG announced the
In November 2022, the Kansai-He- purchase of Alpha Coatings, a custom
However, there are smaller seg- lios combination announced acquisi- powder manufacturer in West Chicago,
ments, with fragmented customer tion of CWS Group, headquartered in for an undisclosed amount. Alpha
base. Smaller producers would thrive Germany. This division has been in the Coatings filled a gap in PPG’s powder
in, say, general finishes, including the existence for more than 150 years, with product portfolio with their leading low
after-sales market. Such segments sales in Europe and USA. In addition temperature cure technology, designed
are better served by smaller, nim- to powder coatings, the target company for the MDF market.
bler suppliers. These segments are is also involved in manufacture of solid
typically less capex-intensive; the synthetic resins and liquid coatings. In September 2020, Akzo Nobel
powder technology is relatively sim- acquired Stahl’s powder coating busi-
pler (compared to liquid, which has PPG has been quite active in this ness. Stahl has developed both UV and
multi-coat formulations and usage of space, as evident from the three acqui- thermoset powders that cure at tem-
solvents); and hence has lower entry sitions it did in last 2-3 years. In April peratures as low as 80°C, which will
barriers. 2022, PPG completed its acquisition allow application to MDF, natural
of the powder coatings business of wood, plastics and composites.
Thus, there are more than 1,200 Arsonsisi, an industrial coatings company
companies involved in production and based in Milan, Italy. The transaction There are some common strategic
sales of powder coatings globally. provided PPG with a manufacturing drivers for these M&As: geographic
base in Italy and sales enhancement in expansion, product line extension and
Now, we would like to discuss some the EMEA region. access to niche technology.
of the emerging trends impacting this
industry. In May 2022, PPG acquired Wor- The acquired companies are smaller,
wag, a family-owned company head- nimbler firms (rather than traditional
Trend # 1: M&A/Consolidation in quartered in Stuttgart, Germany. Wor- industry behemoths), with access to
the industry wag is a 100-years old company, with unique capabilities such as differentia-
The industry structure has bearing sales of ~€220-mnand ~1,100 em- ted technology or differentiated pro-
on the number of mergers and acquisi- ployees across Germany, China, South ducts. Such companies have been ac-
tions (M&As) that happen in the sector. Africa, Spain, Switzerland, Poland and quired by the global MNCs, via bolt-on
A fragmented industry such as powder North America. This deal helped PPG acquisitions.
coatings will have more M&As. In the in getting wider geographic reach and
last 2-3 years, we have seen several an expanded portfolio of products and Trend #2: Powder coating in Electric
large M&As in this sector, though this technologies for the automotive, metal Vehicles (EVs)
is not an exhaustive list. furniture and ACE markets. The EV segment is expected to

196 Chemical Weekly September 26, 2023

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