Analysis of the Industrial Paints and Coatings Market in

South Africa, Nigeria, and Kenya

M960-39

May 2014

Market Growth to Follow Economic Growth Trends

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Executive Summary

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Key Findings

• The South African, Nigerian, and Kenyan industrial paints and coatings markets will

present attractive growth opportunities over the forecast period (2013 to 2017) of the

study.

• Apart from the projected growth forecast in gross domestic product (GDP) throughout all

3 countries, the 3 main growth drivers for the industrial paints and coatings market will be

the expansion in infrastructure development, an increased middle-income class, improved

public and private relationships, and augmented investment opportunities.

• The industrial paints and coatings market is less fragmented in terms of competition when

compared to the decorative paints and coatings market, as the technology is more

advanced and the starting capital is far greater. However, the market still remains

relatively price sensitive.

• New regulations are forecast to lessen the degree of price sensitivity in the market, which

will positively influence the industrial paints and coatings market.

o Government initiatives within sub-Saharan Africa are in place to reduce imports, which

promotes increased local manufacturing activities.

o Meanwhile, higher import tariffs are placed on imported finished goods. Imported

goods become less competitive with locally manufactured products, increasing local

production. Source: Frost & Sullivan

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Key Findings (continued)

Source: Frost & Sullivan

• Market trends suggest that the product segment growth areas within the total industrial

paints and coatings market lie within industrial protective, powder, and marine coatings.

This growth will be driven by an anticipated increase in industrial growth and heightened

investment in infrastructure projects brought about by public and private investments.

• Another focus area lies specifically within can coatings, which forms part of the can and

coil coatings segment assessment.

• The expansion of the middle-income class population and increased export opportunities

into Southern Africa continue to drive the demand for food and beverage packaging, thus

increasing the demand for can coatings. Increased export opportunities may, however, be

restrained by the geographical location of the actual demand.

• South Africa may pose an area of opportunity for coil coatings as the demand in the white

goods market is expected to increase due to lower interest rates.

• Africa’s industrial paint and coatings market has vast market potential. As manufacturers

of industrial paints and coatings create better awareness about the use and benefits of

using the correct products for various application sectors, the market potential will be

captured, as end users in Africa generally lack product awareness, making the industrial

paints and coatings market in Africa relatively underdeveloped and unexplored.

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Market Engineering Measurements

Market Stage

Growth

Market

Units/Volume

101.2 M

Litres (2012)

Market Size for

Last Year of

Study Period

142.1 M

Litres (2017)

Total Industrial Paints and Coatings Market: South Africa, Nigeria, and Kenya, 2012

Compound

Annual Growth

Rate

7.0%

(CAGR, 2012–2017)

Base Year

Market Growth

Rate

5.5%

Customer Price

Sensitivity

7

(scale:1 [Low] to 10 [High])

Degree of

Technical

Change

6

(scale:1 [Low] to 10 [High])

Stable Increasing Decreasing For a tabular version, click here.

Note: All figures are rounded. The base year is 2012. Source: Frost & Sullivan

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CEO’s Perspective

2

The overall market remains extremely price sensitive and end users in Africa generally lack product awareness, making the market relatively underdeveloped and unexplored.

3

The anticipated increase in construction activities for infrastructure and an expanding middle class present attractive growth opportunities.

5Product segment growth areas in the market lie within industrial protective, powder, and marine coatings.

4

The total industrial paints and coatings market had an estimated base year volume of 101.1 million litres and has an expected market volume of 142.1 million litres by 2017.

1 The industrial paints and coatings market is set to grow significantly in Nigeria and Kenya.

Source: Frost & Sullivan