South American coatings market

The coatings market in South America will face again several challenges, some of them new and others that have been around in recent years. International inflation, high overall interest rates and some northern occidental countries with low growth rates are new for most of the coatings market executives. By Francisco Rácz, Washington Yamaga – Y & Associates.

The South American coatings market and the coming future challenges.

Changing local political scenarios, weak macroeconomics indicators in several countries are not new events for the South Americans. High cost and difficulties in supplying several raw materials are quite on-going events worldwide and is expected to continue to impact the region.

As mentioned in early editions, changes in the South American markets have settled definitively, challenging the survival decisions of coatings businesses. Changes in consumer priorities reached all countries. However, countries supported by stronger and more sustainable economies will advance in consumption quality and products. This has an impact on decisions on new technology inflow investments from raw materials to finished products, regionalising global solutions. A new sustainable portfolio of finished products and raw materials will be part of demanding formulation and reformulation. Raw materials supply chain is also demanding new negotiations of capacity and costs, recognising the scalability of South American markets.

The complexity of the geopolitical crisis and energy costs already has an impact on the coatings supply chain in South America. Technologies for finished products and intermediates such as resins, additives and pigments are essentially global. The coatings industry in South America and its supply chain have advanced rapidly into digital platforms for formulations and procurement, but not enough to avoid the impact of new cost levels for which the expectation is a persistent and long-lasting duration.

Under this scenario, the projections for the coatings market in most of South American countries are for a continuous solid growth, away from unrealistic optimist outlooks but recognizing slower recovery outlook in view of global slowdown. The regional resilience is fundamental for South American coatings to overcome the next planning period.

You can read the full article in the July/August issue of ECJ.

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