Emerging coatings markets: Middle East and Africa
Guest contribution by José Bottino, IRL
In 2017 sales of coatings in the region fell slightly, with the market being dragged down by a drop-in sales of architectural coatings in Saudi Arabia and by declines in protective coatings in most oil-producing countries. This trend started in 2015 when the slump in oil prices put on hold many investments in the sector. Overall consumption was estimated at 3.5 million metric tonnes in 2017, equivalent to a market value of EUR 7.6 billion at manufacturers’ selling prices.
Architectural coatings in Middle Eastern and Africa
The region represents the smallest market for architectural coatings worldwide. In Africa, the region is characterised by a large number of countries with small paint and coatings markets; the largest and most influential market in the region is Egypt, followed by South Africa. By contrast, in the Middle East, the leading architectural coatings market – by far – is Saudi Arabia, although in recent years this market has suffered declines because of austerity measures.
In most Middle Eastern and African countries, the architectural coatings industry has been growing rapidly over the last years. Strong economic growth in some African countries, such as Nigeria, is creating a platform for the growing and expanding markets on the African continent. The trend towards urbanisation is entrenched in this region, with emerging markets being a positive factor for the development of urban construction.
Industrial coatings in Saudi Arabia and Iran
The Middle Eastern and African general industrial coatings market is quite small compared to the other regional markets and occupies only a small share of the global market. It is estimated that this market is split roughly 50/50 between the two sub-regions of the Middle East and Africa, with the former accounting for a slightly larger share of demand.
The Middle East boasts two outstanding markets with appreciable demand. These are the Iranian and Saudi Arabian markets, each estimated to account for roughly one third of total Middle Eastern demand for coatings.
The greatest demand for protective coatings in Africa and the Middle East originates from the civil engineering sector. The emerging economies within the Middle East and Africa have been pivotal to the rise in construction productivity, fuelling demand for construction materials, including protective coatings. Industrial end-use sectors also constitute a large share of the market in the region, as the extraction of natural resources in both the Middle East and Africa is an important revenue-generating industry.
Demand for marine coatings in Middle Eastern countries stems mainly from ship repair and maintenance, as the maritime industry is largely connected to exports and imports for the oil and gas industry, which sees large numbers of vessels visiting the countries each year. In Africa, the ship repair and maintenance sector is the largest end-use sector for marine coatings, but it has suffered a moderate decrease in some influential markets over the years. For instance, the market in South Africa has been affected by changes in trading patterns and the availability of cheaper repairs in other parts of the world.
Automotive important in South Africa
In South Africa, the automotive industry is the most important manufacturing industry and it contributes massively to the country’s exports, making South Africa the most attractive hub for the consumption of coatings. Lower production costs, an attractive labour market and its geographical location have played a part in the development of the Moroccan automotive industry, creating demand for automotive OEM coatings estimated at one third of the African market.
Iran and Egypt largest industrial wood coatings markets
The largest consumer countries within the African region are Egypt, Nigeria and South Africa. The South African market is reviewed in depth in this report, and it has been shown that demand for industrial wood coatings there is low, as determined by the small size of local furniture production and of other end-use segments.
The most influential market in the Middle East is Iran, followed by Saudi Arabia and the UAE. In Iran, there has been a rise in demand for industrial wood coatings from applications relating to the construction industry and furniture