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Pigments market report: while still sluggish, growth for pigment manufacturers will be fueled by new product introductions.

Although the pigments market still is facing challenges related to raw material prices and the economy, there are some indications that 2013 will see improvements. "The pigments market continues to trend upward particularly when viewed against the 'recession' years," said Robert Poemer, business unit leader, Heucotech, Ltd. "The percentage improvement in 2012 was also larger than that of 2011, but again the increases are relatively small. The performance also varied significantly by the sector of the coatings business. As in 2011, the sector with the most improved performance was automotive where we have seen positive growth for the last three years. The building sector is showing some signs of recovery but it cannot be termed a significant recover at this point. Again, the major questions for building sector are when will we see a return to normalcy and what will the definition of the new normalcy be?"

Sun Chemical Performance Pigments saw a positive upswing in the global pigments market in 2012, but still not to pre-recession levels. "We faced lower demand in Europe due to the economic downturn and stronger demand in the U.S., South America and Asia," said Mehran Yazdani, vice president, marketing, performance pigments, Sun Chemical. "As a leading global pigment manufacturer, we are optimistic that Sun Chemical Performance Pigments will overcome global economic challenges and see continued growth for the pigments market in 2013."

For Lansco Colors, January 2012 was a strong month and great start to the year. "Growth slowed after this, particularly in the second half of they year, but overall our customers did well in 2012," said Frank Lavieri, executive vice president and general manager, Lansco Colors.

"Generally speaking, 2012 was a challenging year for the pigments market," said Li Wu, technical manager, Trust Chem. "Sales were especially soft in Europe. Worldwide we have seen a steady drop in demand for pigments for publication inks. The soft markets has put added pressure on pricing."

Overall, the year 2012 was a good year for coatings industry sales, according to Poemer. "The year started out with relatively robust sales through the summer months and then a slight slowdown for the balance of 2012," he said. "Heubach's sales for our line of high performance pigments was up slightly in 2012 with the positive driver being sales to the automotive market and soft sales to the architectural/building market soft. For 2013, we do anticipate growth along the lines of 4-5 percent. A good percentage Of our growth will be fueled by the introduction of new products into our high performance line of pigments. However, this growth could be significantly impacted if the building sector building recovers more than anticipated or automotive slows. However, we don't anticipate major changes in either for the foreseeable future."

Instead of relying on improvements in the still-sluggish economy, pigment makers are looking at new products to fuel growth.

"While we are hopeful for improvement in the economy in 2013, we are not relying on it for continued growth," said Lavieri. "We have launched several exciting new products in 2012 as we will in 2013. Additionally, we have added more personnel and laboratory equipment to continue to bring value to our customers."

"We did not see improvements in demand in any of our markets in 2012," said Wu. "We are not optimistic we will see any significant improvement in the coatings market in 2013, however we do expect to continue to grow our sales through new business gained from competitors."

Major trends and challenges

The year 2011 was a frustrating one for the pigment industry both for suppliers and customers. "Availability on a significant number of pigments with subsequent pricing increases were relatively prevalent," said Poemer. "The year 2012 showed increased availability across a large number of products and therefore caused pricing to soften somewhat. For 2013, it appears the situation will remain relatively stable with respect to supply and demand."

Sun Chemical reported that one major trend continues to be the strong positive usage of high performance and effect pigments in virtually every market. "Another key trend and challenge we saw in 2012 was the sustained high costs of raw materials. Sun Chemical anticipates that the raw material prices will remain at their current high levels. However, we are certainly aware of the high degree of volatility in the global economy. Therefore, we will continue to monitor the key raw material indexes and focus our manufacturing team on process and raw material productivity. In addition, we continue to see increases in regulatory compliance costs."

One way pigments makers can stand apart from the pack, is by offering consistent, reliable products and services. "Customers today have a great choice of pigment suppliers but have learned in the last few years that there is a wide gap between the reliability of these suppliers," said Lavieri. "There is a greater recognition that an unreliable pigment supplier is a poor business partner and this is driving a shake out of weaker companies who in the past have had patent protected monopolies. Today, buyers are more savvy and make decisions based on the entire value proposition including price, reliability and long term sustainability. Lansco Colors has a strong value proposition and is thriving in these new market dynamics."

"Traditionally the classical pigment market has been highly competitive," said Wu. "This trend continues. However, we are now seeing intense competition in many of the specialty, higher performance pigments. Prices have already been driven down on all pigments, which may lead to some increase in prices as any increase in cost will need to be passed through. However, we fear short-term intense competition will further reduce margins. Trust Chem is putting more emphasis in 2013 to optimize the production process, lower production cost and improve the product design to help reduce cost. Trust Chem has had some success here in 2012 and is looking at more breakthroughs leading to reduced cost on selected pigments in 2013.

New Developments

Sun Chemical Performance Pigments has invested and will continue to invest heavily on high performance and special effect pigments. "An investment in high performance pigments can yield more in return for our customers than standard pigments," said Yazdani. "High performance pigments make products that are more appealing to consumers, help businesses become more competitive, grow sales and improve margins. The high performance and special effect pigments market is important for Sun Chemical Performance Pigments and that's why we recently acquired Benda-Lutz. The acquisition of Benda-Lutz allows Sun Chemical to expand its product portfolio in metallic effects to our core coatings markets and increase our global footprint in pigments and effects.

"From a technical standpoint, the most important property exhibited by high performance pigments that distinguishes them from other pigments is their durability in the applications, Yazdani continued. "Some examples of this include light fastness and resistance to chemical attack and high ternperatures.Use of effect pigments allows customers to highlight their products in terms of design and appearance, drawing the end use customer to their lines and providing consumer appeal. In addition, the metallic series of pigments provide functional properties to end use applications such as improved anti-corrosion, thermal stability and UV reflectance."

Trust Chem is working on techniques used in the synthesis of intermediates, in which formulators can reduce the cost of the intermediates used in its products.

"Our goal is specifically reduce the cost of selected high performance pigments to make them more economically feasible in a wide range of ink, plastic and coating formulas," explained Wu. "We are very excited by the opportunities this work is presenting and look forward to further discussing this work with our customers in 2013."

Heubach has started up a new production line for complex inorganic colored pigments (CICPs) in Germany that combines outstanding productivity and flexibility, according to the company.

"This new production line enables the production of chrome rutile yellows revealing premium high tinting strength pigments," said Poemer. "The special feature of these pigments is that they not only show extremely high tint strength but they exhibit a high level of chromaticity as well. The current focus of Heubach's R&D department is to now ensure the availability of these brilliant pigments on large scale. This unique class of P.Br. 24 pigments is commonly used in plastics applications."

Heubach also participates in several R&D projects together with leading institutes and raw material manufacturers in order to develop novel corrosion protec- tion technologies. Heubach's latest research activities in the field of environmental- friendly anticorrosives have resulted in the development of a novel zinc-free product that exhibits high-performance and broad applicability. To date this performance has only been achieved by using zinc containing anitconpsives. This product will be introduced in early 2013.

Heubach has introduced MLR301901 (PV19), Monolite Red 301901, the bluish red shade PV19. It exhibits excellent durability and lightfastness making it useful for a variety of coatings applications including high end industrial paints and automotive finishes. MLY11510 (PY151), Monolite Yellow 115101, a greenish yellow shade pigment offering excellent lightfastness, weatherfastness and opacity. It is completely resistant to major organic solvents and is used in high performance industrial coatings and automotive finishes.

Kerry Pianoforte, Editor
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Title Annotation:FEATURE
Author:Pianoforte, Kerry
Publication:Coatings World
Date:Jan 1, 2013
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