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Monday, 23 October 2017
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Markets & companies

Direct-to-metal coatings: Outstripping the market

Wednesday, 2 August 2017

A small sub-section of the metal coatings market is one of the fastest growing. Direct-to-metal (DTM) coatings can offer huge gains in production efficiency and cost savings yet need to meet tough performance requirements. How does the DTM market perform currently?

Direct-to-metal coatings: Outstripping the market. Source: Adrian Werner - Fotolia

Direct-to-metal coatings: Outstripping the market. Source: Adrian Werner - Fotolia

The global metal coatings market covers a broad range of industries. Building and construction and automotive and transportation are key drivers for growth in this market. Developing countries still represent an untapped market for the construction industry and heavy investment in construction in the Asia-Pacific region is expected to fuel a large proportion of the growth. Markets & Markets, a research company, estimates that the global metal coatings market was worth EUR 7 billion in 2015. It expects this to grow at a compound annual growth rate, CAGR, of 5.8% between 2016 and 2021, when sales will reach EUR 10 billion. The direct-to-metal (DTM) segment of the metal coatings market is relatively small. Nevertheless, it is a source of great opportunity and one of the fastest-growing sectors.

Doubled expectations

As the name implies, a DTM coating is applied directly to the metal and is used as a one-step coating, replacing a two-layer primer + topcoat system. Ideally, it will be applied after minimal surface preparation in one application step. However, two coats of a DTM coating can provide the enhanced performance required for more challenging conditions whilst still offering efficiencies and cost savings over the traditional multilayer system.

DTM coatings need to perform on two levels – to help prevent corrosion and provide a decorative finish equal to that of a topcoat. The dual function of these coatings comes with double the burden. If coatings fail, the entire product may need repair or replacement for users such as OEMs, where corrosion protection is a top contributor for brand performance.

Across the industry efforts are being made to reduce VOC emissions and comply with environmental legislation. The same applies to DTM coating producers who also need to ensure their products perform consistently in conditions such as extreme humidity, which is key in high-growth areas of Asia Pacific.

Improvements in efficiency boost trend

Customers are under increasing pressure to cut costs. The lower application and inventory costs, improved throughput and worker productivity make direct-to-metal coatings particularly attractive. Lars Risum, Group Segment Manager Infrastructure at Hempel, a DTM coatings producer, confirms this. "Changing from typically a two-coat system to a one-coat direct-to-metal solution brings significant efficiency gains. We have seen a big demand for increasing efficiency and our direct-to-metal solutions provide a strong value proposition for customers, enabling them to increase their competitiveness.” He expects the trend towards DTM solutions to continue as customers seek efficiency gains to optimise their business in the face of increasing labour costs. The potentially broad appeal of these coatings is limited only in fulfilling the performance requirements of existing systems.

Performance still limited

The performance of these coatings has made great strides in the past decade. The corrosion protection of waterborne high-gloss coatings, for instance, has improved with advances in binder technology. Part of the challenge to DTM coating manufacturers is overcoming the perception of customers that they will be sacrificing performance. Many end users believe that these coatings cannot offer the necessary long-term useful life of a multi-coat system and are a compromise.

Mr Risum suggests that the limited corrosion protection of a one-coat system means that in more severe and harsh environments customers need to use two- or three-coat systems in accordance with industry guidelines. He adds that "applying a one-coat direct-to-metal solution also requires skilled and qualified applicators to ensure that the specified dry film thickness is obtained, providing adequate corrosion protection”. The two main markets for DTM coatings are the industrial metal coatings and decorative market.

BB_DTM

Predicted growth rates of general industrial and decorative coatings compared with DTM coatings. Based on predictions from Orr & Boss.

Industrial coatings

Doug Bohn, at the market research company Orr & Boss, concedes that it is difficult to gauge the size of the market but predicts that growth of DTM coatings is 1.5 to 2.5 times that of the general market. The global industrial coatings market is predicted to rise at 4.5% annually, compared with around 10% for DTM industrial coatings.

The steady increase Hempel has seen in the market has primarily been in the industrial coatings market - in the fields of civil structures, light industry and construction steel for general use. Direct-to-metal polyurethanes have become more popular, often replacing alkyd and epoxy/polyurethane systems for environments in the lower corrosion categories.

Asia-Pacific remains strong for growth

Most of that growth (around 60%) is driven by Asia. Though the economy is slowing slightly it is still growing at close to 7% a year, much stronger than anywhere else. The growth of the metal coatings market in China in particular is driven by foreign investment. Low-cost labour and inexpensive and readily available raw materials has encouraged several major players investing in China to build new manufacturing facilities. PPG Industrials, for example, has a new coatings centre in Tianjin. A large proportion of the Asia-Pacific market is driven by material cost instead of efficiency according to Lars Risum at Hempel.

Still opportunities in Europe

Taking Asia out of the equation and looking more specifically at the general industrial coatings market in North America and Europe, Orr & Boss predicts annual growth of around 2-3%. Again, the DTM sector of this market is expected to be 1.5-2.5 times that at 3-7%. Growth in Europe is primarily attributed to the need for end users to increase their competitiveness and improve production efficiency.

Outperforming the decorative market

The decorative coatings sector depends heavily on the performance of the building and construction sector. Strong growth in the construction industry across the world means that demand in decorative coatings in general will rise, providing another growth area for DTM coatings.

Grandview research suggests the global decorative coatings market segment should grow at a CAGR of 6.1% from 2015 to 2022. Orr & Boss predict a slightly more cautious growth of 4.8% per year in volume and 6% in value globally. This varies by region. While DTM decorative coatings are more popular in North America and Europe than in Asia, this subsection is expected to exceed the general growth figures for the decorative market at a rate of about 7% globally.

By Sarah Silva

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