The recession decreased downstream demand, leading negative overall growth since 2007
Los Angeles, CA (PRWEB) August 16, 2012
Paint removers loosen paint and clean the underlying surface so that the object can be repainted. End-users include boat repairers, downstream manufacturers such as automobile manufactures, construction contractors, do-it-yourself consumers and municipalities. Similar to other manufacturing industries, demand for the Paint Remover Manufacturing industry has been volatile over the five years to 2012. When the recession hit in late 2008 and carried on through 2009, demand declined for downstream users as consumers reduced purchases in light of falling disposable income. According to IBISWorld industry analyst Radia Amari, this hindered revenue growth for paint remover manufacturers; however, as the economy began to recover and consumers experienced increasing disposable income, demand for end-users like automobile manufacturers, boat repairers and construction contractors began to grow, which caused demand for paint removers to jump. Over the five years to 2012, industry revenue will fall at an estimated average annual rate of 0.7% to $359.7 million. In addition to shifts in demand, the industry has endured high raw-material costs and strict government regulation. These challenges remain constant in 2012. Nevertheless, the economy continues to grow, and in 2012, revenue will increase 1.9%.
During the five years to 2017, industry revenue is expected to increase at an annualized. Downstream manufacturing industries will increasingly demand paint remover as production increases. Demand from local governments for industry products will also rise over the next five years, as their budgets grow. Over the past five years, government budgets have faced severe cuts to overcome deficits. However, with additional funding, governments will have more money to spend on graffiti removal, a process that requires paint remover products. While industry revenue is projected to grow, company numbers are anticipated to decrease through 2017 because of acquisition activity. Players like W.M. Barr & Co. completed acquisitions over the five years to 2012 in order to expand their market share. This trend is anticipated to continue as the industry's product line remains saturated and firms experience the most growth potential through mergers and acquisitions. From 2012 to 2017, the number of firms is forecast to decline at an average annual rate of 3.3% to 11.
The Paint Remover Manufacturing industry is estimated to have a medium level of concentration overall, with the four top companies making up less than 70.0% market share by revenue. Market share concentration has increased over the past five years as competitors consolidated to increase profit margins amid the recession. Concentration increased significantly between 2008 and 2009, courtesy of the merger between W.M. Barr and Homax, and its acquisition of the Goof Off product line from the Valspar Corporation. Although industry concentration is classified as medium, the concentration in localized areas is often very low. “This difference is because there are usually few paint-remover manufacturing facilities within localized areas (e.g. in a municipality) and it is often uneconomic to dispose toxic chemicals at facilities that are located outside a particular area due to haulage costs,” says Amari. As of 2012, there is only one industry major player (W.M. Barr) that competes with regional and local companies. The industry has undergone cycles of consolidation, and further consolidation is expected due to increasing manufacturing regulations and strategic relocating. Rising costs, regulatory complexities, heightened sensitivity in many communities to environmental conditions and increased capital requirements have facilitated consolidation. For more information, visit IBISWorld’s Paint Remover Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures products that loosen paint from surfaces to downstream consumers, including boat builders, contractors, do-it-yourself consumers and municipalities. Key products include paint and varnish remover, paint thinner and epoxy remover.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalization & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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