STEADY GROWTH IN SOUTH KOREA COATINGS MARKETJune 1st, 2012
BY KARRYN MILLER
SOUTH Korea’s paint and coatings market may be mature but that has not stopped it from showing steady growth. According to business research firm Timetric, which has a South Korea office, the country’s architectural paint market was worth USD582.9 million in 2010 and USD600.8 million in 2011. "South Korea’s paint industry has grown over the past few years, but only marginally," a senior analyst from Timetric told the Asia Pacific Coatings Journal. "The country’s paint sector has recorded a compound annual growth rate of 2.68 per cent during the period from 2008-2011." Data from the Korean Paint & Printing Ink Industry Cooperative (KPIC) also showed growth: paint and coatings production was measured at 1,006,671 kilolitres in 2010 and 1,037,624 kilolitres last year – an increase of 3%.
Exports also went up. In 2010, South Korea exported 135,437 metric tonnes of paint. In 2011, the amount increased by 2% to 138,531 tonnes. A representative from the KPIC stated that Korea mainly exports paint to Japan, the USA and Singapore.
The country brings in considerably less paint than it sells overseas. Imports were roughly a third of exports in 2011 at 43,872 tonnes. This reflected a trend, with a 5% decrease from the imports received in 2010 (46,086 tonnes). The main exporting countries tapped by South Korea purchasers were China, Vietnam and Russia, according to the KPIC.
Meanwhile, the paint industry is still dominated by several large local players: Korea Chemical Co. Ltd (KCC), Samhwa Paints Industrial Co. Ltd, Noroo Paint and Coatings Co. Ltd, Kunsul Chemical Industrial Co. Ltd, Chokwang Paint Co. Ltd, SSCP Co. Ltd, and PPG Industries. KCC has the largest slice of the paint industry, reporting 2011 sales (domestic and international) of USD1.3 billion, said Timetric’s analyst. Within the local market, certain sectors are faring better than others. "The automotive industry of South Korea posted robust sales growth in 2011, despite global economic woes," he said. "The automotive paints category is expected to display growth in South Korea."
Last June, US chemical giant DuPont recognised this growing segment and opened a DuPont Korea Innovation Center – one of seven being established globally – in Seoul, South Korea. These centres are designed so that there is "a real-time collaboration between scientists and customers that will mean innovative solutions and increased speed-to-market for consumers around the world," said DuPont executive vice president and chief innovation officer Thomas Connelly. Each centre has a slightly different focus depending on the market. In South Korea, its experts focus especially on serving the automotive and electronic industries, with the country’s major car sector being an especially important coatings sector client. "It is important for DuPont to build on the needs of leading South Korean companies which are winning business globally and looking for new technology innovation in the areas of automotive, renewable energy, electronics, bio-materials and construction," said a company note.
And South Korean consumers are broadening their tastes when it comes to car colours. Traditionally, silver dominated the market but a Korean Herald article this May noted that Koreans are seeking a wider range of colours. The article offered the example of Kia Motors’ May launch of its premium sedan K9 in Seoul in brown rather than traditional black. Korean motor company Hyundai also uses a chameleon paint (a colour that changes when viewed from different angles) on some of its models. The leading car company also recently released its Veloster Turbo with a matt grey exterior rather than the normal, shiny finish.
The car market is not the only prosperous industrial customer for South Korea’s paint and coatings sector. "We expect to see strong growth in marine and anti-corrosive paints," said Timetric’s senior analyst. "South Korea is the world’s largest shipbuilding nation with a global market share of 37.5 per cent in 2011." In December 2011, KCC’s vessel coatings, Seacare A/F795 and Korepox EH2350, were awarded the title of ‘World’s Best Products’ by South Korea’s ministry of knowledge economy. The awards are given to South Korean products that fall within the top five global market share for their category and control 5% of the global market (among products with a global market valued at USD50 million or more or those that have an annual export value amounting to USD5 million or over), according to a ministry statement. Seacare A/F795 is KCC’s flagship vessel paint that protects ships from long-term exposure and sedimentation by seawater and marine organisms. "Korepox EH2350, which provides salt water and abrasion resistance as well as anti-corrosiveness, has been applied to more than 500 ships,"
said Timetric’s analyst. "This paint is also applied to steel structures such as tanks, pipes and warehouses."