Industry Update: Micronized Copper Treated Wood is Officially AWPA Standardized
With AWPA’s publication of its 2017 Book of Standards, the industry’s standard-ization of micronized copper azole wood preservatives (MCA and MCA-C) is now official. Despite some differences in minimum retention rates and use categories, the standards governing the use of these preservatives will remain similar on the whole to the standards previously established by Koppers’ and Lonza’s ICC-ES Reports. This development ensures micronized copper’s continued success in the wood preservatives industry.
Residential Markets Drive Growth in Demand for Wood Coatings
Gains will be fueled by rising new housing construction, which raises demand for newly installed wood products and therefore for wood coatings. Growth will be supported by increases in residential maintenance activities, which often involve recoating existing wood products. The market for coatings applied on site in residential settings is the largest and will account for the highest share of new demand. However, the fastest growing market will be that for coatings applied by wood product suppliers at the time of manufacture, as this market expands with increasing demand for preprimed and prefinished wood construction materials.
Key Findings in the Wood Coatings study:
Nonwood Materials Detract from Sales of Wood Coatings
Wood is a highly popular material in US residential construction -- in siding, decking, fencing, cabinetry, and more. However, in many applications, nonwood alternatives are increasingly favored, either for being less expensive, more durable, or lower-maintenance. As materials like plastics, wood-plastic composites, and metal become more popular in applications traditionally dominated by wood, the potential demand for wood coatings is diminished, which will restrain overall growth going forward.
Premium Products Contribute to Higher Prices and Market Value
In the wood coatings market, consumers are often willing to pay a premium for advanced performance, and coatings suppliers continue to develop new products that work better, are easier to use, and last longer than older products. Stain-and-sealer-in-one and self-priming paints combine multiple functions into one product to save the end user both time and effort. Similarly, one-coat systems simplify the coating process by cutting out the second and third coats that traditional products generally require. And powder coatings are efficient, eco-friendly, and highly durable, which makes them increasingly popular with consumers and wood product manufacturers. As these high-performance products gain market share, their higher pricing will be a boon to the overall value of the wood coatings market.
Industry Consolidation Continues with Major Acquisition
In March 2016, Sherwin-Williams agreed to acquire Valspar, and this deal is expected to be finalized by the end of the second quarter of 2017. As Sherwin-Williams is the market leader, and Valspar another major supplier, this acquisition will move the wood coatings industry toward greater consolidation, and it will provide Sherwin-Williams a much stronger position in home centers like Lowes, to match its dominant position in the company-owned store channel.
This industry study presents historical demand data (2005, 2010 and 2015) and forecasts (2020) by product (stains, paints, sealers, and primers), application (siding, furniture, decking, fencing, windows & doors, cabinets, molding & trim, flooring, and others), market (residential and nonresidential building construction, nonbuilding construction, and manufacturer-applied), and end uses (new and maintenance coatings). The study also evaluates company market share and competitive analysis on industry competitors including Sherwin-Williams, PPG Industries, RPM International, Valspar, Masco, Akzo Nobel, and Benjamin Moore.