2. With a current low per capita consumption of paint and coatings, Vietnam is expected to register a very steady growth of paint and coatings in coming years.
OVERVIEW
1. Estimated to be approximately $620 million at the end of 2017, the Vietnamese paint and coatings industry has registered steady growth in recent years on account of vibrant growth in the architectural segment.
2. Catered by leading multinational paints and coatings producer such as AkzoNobel, Jotun, Nippon Paints and regional players – 4 Oranges Company Limited and Toa Paints from Thailand – the Vietnamese paint and coatings industry has seen huge investments in capacity expansions in recent years.
3. Over the last few years, some of the domestic companies have become very competitive, particularly in the economy sub-segment of the industry. These include Kova, Dong Tam, Alphanam, Hoa Binh and Tison. These domestic companies dominate the market in smaller cities and rural areas, while MNC producers dominate in the larger cities.
4. Steady economic growth in the current year and next few years are expected to give the Vietnamese paint and coatings industry a much-needed boost in the short and medium term.
5. Vietnam’s economy is expected to grow nearly 6.8 percent during the current year, accompanied by broad macroeconomic stability before decelerating incrementally to 6.6 percent in 2019 and 6.5 percent in 2020, largely reflecting weaker external demand, the World Bank (WB) stated in a report released during the second week of December 2018.
PAINT SEGMENT
1. Architectural paints account for about 62 percent of the Vietnamese paints and coatings market on a volume basis.
2. The retail market for decorative paint and coatings in Vietnam is expected to grow from the current (approximately) VND 8.9 trillion in 2018 (about $382 million) to approximately VND 10.7 trillion ($459 million) by 2021 as macroeconomic conditions continue to drive construction activity in the country.
3. Despite two cities being the capital and the largest commercial city in Vietnam, the current development of these two cities is unable to accommodate the actual growth of their population and the economic expansion.
4. Automotive coatings don’t have a huge share of the total paint and coatings market in Vietnam, due to a vibrant automotive industry in neighboring Thailand, Indonesia and China
Main Producers
1. AkzoNobel is one of the largest paint and coatings company in Vietnam, with four manufacturing locations producing both decorative paints and performance coatings.
In 2015, AkzoNobel further invested in its performance coatings business in Vietnam and doubled the capacity at its powder coatings facility in Dong Nai.
2. Japanese company, Nippon Paint entered the Vietnamese paint and coatings market in 1994 by commencing production at its production facility in Bien Hoa Industrial Zone II in Dong Nai Province.
3. In 2006, Nippon Paints started its second plant, Nippon Paint Vietnam Hanoi. Dedicated to automotive coatings, this facility supplied automotive coating products to major automotive producers in the country.
4. In late 2014, Nippon Paint inaugurated its third production plant in the northern province of Vinh Phuc, the third of the Japanese paint manufacturer in the country.
5. The facility, which cost the company about $14 million has an annual production capacity of 15,000 tons. The third plant has been set up to cater to domestic automobile and motorcycle manufacturing industry and enlarge production to encompass coil coating, general industrial-use coating, heavy-duty coating and other coating fields.
6. In 2004, Jotun expanded the plant by investing in advanced technology and increasing its capacity to 13 million liters of paint a year.
7. In 2013, it injected an extra $8 million into its Vietnam operations, increasing its total investment pledge in the country to $16.1 million. In 2016, it further increased its yearly capacity to the current 45 million liters.
8. Jotun Paints (Vietnam) will invest $70 billion to build its second plant in Vietnam. The company signed a contract in April 2018 with the Vietnamese authorities at the Hiep Phuoc Industrial Park in Nha Be District, to develop the new facility.
9. The subsidiary of leading Thai paints and coatings producer, Toa is among the top three paints and coatings producers in Vietnam. company commenced production from its second plant at Binh Duong province in 2006 with an outlay of $6 million.
10. With sales of 1.223 billion baht ($37 million) in 2017 in Vietnam, company’s sales decreased by 8.1 percent in the year as compared to 1.332 billion Baht ($40.7 million) in 2016.
11. 4 Oranges entered into paint industry in 2004 and operate through four distinct brands: Mykolor, Spec, Boss and Expo, catering to architectural and industrial segments.
12. With a total sales of VND 1.73 trillion in 2017, the company claims to have more than 25 percent share of the domestic market. 4 Oranges has an installed capacity to produce 100 million liters of paintsand coatings and 60,000 tons of plastic powder per year.
(Source: coatingsworld)
