COVID-19 is shaking up the paint and coatings industry
In addition to providing a summary of macro trends, the specialist analysed Axalta’s marketing positioning, and its strengths and weaknesses. “They do really well in North America in commercial vehicles, not so much in Europe… [and] certainly not at all in Asia-Pacific.” Another positive is the growing industrial business that has been built up with acquisitions.
Axalta focuses on five industrial segments: powder coatings, general industrial protective coatings, coil coatings, wood coatings and energy solutions. The specialist explained the end-markets and key drivers of these, and estimated their total market size.
One recurring point was that Axalta could be missing out on growth in developing markets. For instance, “in Asia, where 50% of the powder coating market globally exists, [Axalta are] not really where they need to be, so they’re not going to be able to capture the same level of growth that their competitors are.”
Axalta has a number of global competitors. AkzoNobel is “by far” the global leader in powder coatings, while PPG and Sherwin-Williams take the top spot in general industrial. Axalta’s main presence is in North America, so although it may lead in some segments in that region, it’s global rankings lag somewhat.
PPG has various strengths, including efficient manufacturing costs and excellent customer service. Moreover, “their SG&A cost structure is typically 300-500 basis points better than any of their industrial competitors and they have a process of procurement that is a competitive advantage for them.” The specialist believed that it would make sense for PPG to acquire Axalta, and detailed the drawbacks and synergies such a partnership would involve.
To access all the human insights from Third Bridge Forum’s Axalta Coating Systems – North American Market Update Interview, click here to view the full transcript.
The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.
For any enquiries, please contact email@example.com