Additive market: The big five in the scope
By Mike Growney, Kusumgar, Nerlfi & Growney
Consumption of these five additives was 1.15 million tonnes in 2017 valued at EUR 4.38 billion. They represent some 70 % of the additive volume consumed in coatings and inks and 60 % of the value. Other additive types include biocides, driers, fire retardants, light stabilisers, plasticisers, etc.
Coating and ink industries
Global coating consumption was 43 million tonnes worth EUR 115.26 billion in 2017 while ink demand was nearly 4 million tonness valued at USD 15.37 billion. Coating growth is placed at 4 % per year while ink volume is projected to increase at a 2 % annual rate. Water-based technology comprises 55 % of the coating volume with 85% of the tonnes for architectural applications and the rest for industrial. In contrast, only 15 % of the ink volume was water-based. Water-based coatings are increasing 5 % per year while water-based inks are advancing at a 3 % annual rate.
Solvent-based technology was 38 % of the coating tonnes and one-third of the ink total. Oil-based inks (hydrocarbon, vegetable, etc.) were the leading ink technology with 48 % of the tonnes. About 30 % of the solvent-based coatings were used in architectural paints which are growing 2 % per year while 70 % was consumed in industrial end uses which are increasing 3 % per year. Solvent and oil-based inks are growing only 1 % annually. 100 % solid technologies for coatings include radcure, powder coating and other 100 % solid liquids while for inks they are primarily radcure types. The technology comprised 7 % of the coating and 3 % of the ink volume.
Although the five leading additive categories are categorized in this paper they include over two dozen broad chemical and product form categories which comprise thousands of individual products. There are some large volume additive types but there exists many highly specialized additives which can improve the properties of an individual coating or ink formulation. Additives for small volume and highly specialized formulations command a price premium.
Usage of the five leading additives roughly tracks that of coating and ink volume with 92 % of the tonnes used in coatings and the rest in inks. Rheology modifiers are the leading type with nearly 40 % of the tonnes and 36 % of the dollars. The broad categories for rheology modifiers include synthetic water-based (46 % of the volume, including water), inorganic (25 %), cellulosic (17 %) and other solvent-based synthetic types (11 %). Some formulations employ combinations of rheology modifiers for optimum stability and application properties.
Dispersants are second with 20 % of the volume and 18 % of the dollars. Dispersants are used to stabilise and optimize the appearance of the 5.5 million tonnes of pigments and a smaller quantity of fillers used in coatings and inks. They vary from high volume polyacrylic acid types for stabilizing TiO2 in architectural house paints to specialized polymeric types which account for over 55 % of the value.
Foam control agents were 16 % of the additive volume and value. Technologies used include the high volume and older mineral oil based formulations to those based on surfactants, polymers or silicones. Over three-quarters of the foam control additive volume was used in water-based formulations.
Slip and rub additives are used to modify the abrasion resistance, slip properties, blocking and release characteristics of a coating or ink. They represent 12 % of the additive volume and 16 % of the value. Wax-based products were 87 % of the volume and the more costly silicones 13 %. Silicones and waxes can be combined to optimise a formulation. Wax based products are incorporated as micronized powders or as water-based or solvent-based dispersions/emulsions. Some two-thirds of the wax used was polyolefin types with polyethylene the predominate kind. Fischer-Tropsch, PTFE and petroleum are the other larger wax types.
Wetting agents were 12 % of the additive tonnes and 14 % of the dollars. They are surfactants that help reduce surface tension which affords pigment and substrate wetting, improves flow and leveling, and can contribute to other property improvements. Some 55 % of the wetting agent volume was alkoxylated surfactant such as alkyl phenol ethoxylates, secondary alcohol ethoxylates, etc. These surfactants are typically added during pigment grinding. Other wetting agents include acetylenic glycol derivatives, silicones, acrylic polymers and fluorosurfactants. Some 78 % of the wetting agent volume was employed in water-based formulations.
Additives by technology
As shown in Figure 1, water-based coatings were an outlet for 797,000 tonnes of the five additive types, 69 % of the total volume. Water-based coating additives are growing at a 5 % annual rate. Architectural paints took 84 % of the water-based coating additive tonness and industrial coatings the rest. Additives for industrial coatings generally cost more and comprised one-quarter of the USD 3 billion water-based coating additive value. Industrial water-based coating applications such as auto OEM and refinish, overprint varnishes, wood furniture, etc. typically use more specialized additives. Solvent-based coatings consumed one-fifth of the additive tonnes with 80 % for industrial coatings and the rest for architectural. Solvent-based coating additives were about one-quarter of the value as high performance types are in demand for end uses such as automotive. Solvent-based coating additives are projected to increase 3 % per year.
Oil and solvent-based inks utilized 5 % of the additive volume and water-based inks 3 %. They combined for 10% of the total additive dollars. Over one-half of the ink additive volume was slip/rub products. Rheology modifiers and dispersants are the other larger volume additive types for inks. Oil and solvent-based ink additives are forecast to increase only 1 % per year while water-based types are growing at a 3 % annual rate. Powder, radcure, and other 100 % solid liquid coatings and inks were an outlet for 2% of the coating and ink additive volume and 5 % of the value. Additives for these 100 % solid technologies are increasing at a 5 % annual rate.
Additives by region
The Asia-Pacific region consumed 40 % of the additive volume in 2017 and 38 % of the value and is led by China which took 57 % of the region’s tonnes. Additive volume in the region is growing 7 % per annum with China expanding at an 8 % yearly rate. India took only 5.5 % of the region’s additive volume but is increasing 11 % per year. Japan and South Korea combined for 17 % of the tonnes but are growing sluggishly.
Europe took 28 % of the global additive volume and 29 % of the value. Europe is a mature outlet for coatings and inks and a 2 % per year rate of increase is forecast for additives. North America represented 23-24 % of the additive tonnes and value and like Europe has mature growth prospects. However, despite low growth in Europe and North America there is fierce competition among the various additive chemistries and new products are constantly being introduced.
South and Central American countries took 5 % of the additive volume. Additive growth in the region has been hurt by the recession in Brazil. A modest 3 % annual increase for additives is now projected.
Additive supplier structure
The supplier structure for coating and ink additives is diverse with several large suppliers and numerous medium and smaller ones. Some suppliers participate in only a single additive type and chemistry while others provide a wide variety of products. There has been several large acquisitions in recent years which have concentrated the market and include Altana’s (Byk) acquisition of Rockwood’s rheology additive business, Dow Chemical acquiring the 50 % of Dow Corning that it did not already own, and Evonik’s acquisition of Air Products’ Specialty Coating & Additives business.
The top five suppliers of coating and ink additives include Byk, Evonik, DowDuPont, Elementis and Ashland. These companies now garner just over one-half of the sales which is up from a 42 % share five years ago. Each of these companies sells all of the five additive types.