| AM924023 |
| AMA RESEARCH MARKET REPORT : UK Paint & Effects Market Report February 2003 |
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BRIEF DESCRIPTION
| Covering the period 1997-2006, the report examines the market for paint, paint effects & accessories, & woodcare products. It establishes market value, analyses recent trends & key factors affecting the overall performance of the market, & establishes the breakdown of the overall market by end-use sector & product type. It examines imports & exports by sector, & identifies major suppliers of both paint & woodcare products, establishing their market shares in value terms. It reviews distribution structures & major outlets within each type of distribution channel, highlights key influencing factors & assesses future prospects for the market. |
| Key areas of coverage in the report include: |
| THE MARKET |
| Overall Market - analysis of size by value, historical trends from 1998-2002 and forecasts to 2006. |
| Recent trends and key factors affecting the overall performance of the market. |
| Review of key influencing factors - conservatory volume growth, window and door framing material usage in new housing & replacement (mix of PVC-U and timber), trends in wallcoverings market, garden furniture sector, etc. |
| Future prospects for the paint and woodcare industry - key influencing factors. |
| Mix of overall market by end-use sector - trade commercial, trade domestic and DIY, relative changes of mix and current performance of each sector. |
| Imports & Exports - size of each sector and key countries influence on demand. |
| PRODUCT MIX |
| Definitions of types of paint, paint effects and woodcare products within the market. |
| Current share mix of paint products - emulsion, gloss and others - retail and trade. |
| Current share mix of woodcare products - varnishes, wood dyes, woodstains and preserves and fence treatments - retail and trade. |
| Current share mix of woodcare - interior, exterior and garden - recent trends in mix. |
| Recent trends in both paint and woodcare in terms of colour, new product development, value added issues, etc. |
| Recent trends within paint effects and other paints. |
| SUPPLIERS |
| Major suppliers of both paint and woodcare markets in the UK market, with shares by value. |
| Profiles of major suppliers, financial information and recent developments, rationalisation of supply structure. |
| Details of major companies targeting the higher quality and niche sectors of the market. |
| Product and sector strengths, trends, developments etc. |
| DISTRIBUTION |
| Distribution structure for overall market illustrating major channels involved - trade and retail. |
| Share of paint and woodcare distribution by outlet type - DIY, Builders Merchants, Trade Centres, Independents etc. |
| Review of major outlets within each type of distribution channel. |
| Overall performance of key channels, growth / decline, areas of strength. |
| KEY MARKET INFLUENCES |
| Construction sector - historical trends and current performance of housing and commercial construction markets, house moving. |
| Age distribution of UK population. |
| PDI, level of employment interest rates, inflation. |
| MARKET PROSPECTS |
| Future prospects for paint and woodcare markets. |
| Key factors influencing future prospects. |
COMPANIES COVERED
| ICI Paints |
| Akzo Nobel |
| SigmaKalon |
| Ronseal |
| ICI Woodcare |
| Rustins |
| SigmaKalon |
EXECUTIVE SUMMARY
| The paint and effects market saw a number of difficult years at the start of the 1990s before showing some sign of recovery in 1996 and 1997. Since then, overall sales have continued to grow, driven by a number of factors, including; fashion trends away from wallpaper to paints, rising media coverage, rapid product development, stimulation from the rapid rise in conservatory sales etc. A rapid rise in the DIY market, estimated to be growing at around 6% a year, is also helping to stimulate the sector. |
| The woodcare market as also seen recent growth and growing interest in garden redesign is helping to stimulate the sector, especially in the garden woodcare segment which has been one of the fastest growing markets. |
| In addition to the overall market, a buoyant housing market and strong consumer spending has resulted in a positive environment for the paint and woodcare sectors. |
| Overall market size in 2002 is estimated at £1014m at retail prices and forecast to grow to over £1100m (RSP) by 2006. Paint is the dominant sector, accounting for 80% of sales, with woodcare accounting for the remaining 20%. The market for paint and woodcare is split into retail and trade which comprises three end-use sectors- trade commercial, trade domestic and DIY - the largest of which is the DIY sector accounting for an estimated 62%. The most buoyant sector has been retail due to the high level of consumer and media interest in home refurbishment Trade, however, has remained relatively flat in comparison, although the market is showing some signs of growth. |
| The paint market is comprised of three types of paint - emulsions, glosses and 'others' e.g. speciality paint, spray paint. Product mix differs in terms of retail and trade with emulsions taking the bulk of the share in both areas and there has been no significant percentage mix change between these sectors in the last few years, although there has been a notable growth within the speciality paints market. |
| The woodcare market is comprised of four specific product types - varnishes, stains, preserves, and fence treatments and dyes. In terms of retail and trade, the product mix share differs considerably, with varnishes being the largest sector for retail, and stains the largest for trade at around 70% of sales. In addition, the woodcare sector can also be broken down into several key areas - interior, exterior and garden - with interior the largest sector at over 40%, but garden woodcare being the most buoyant and currently accounting for around 30%. |
| Over the last few years, there has been growth in the majority of product sectors within the paint and woodcare market, with companies undertaking research and development in order to develop new products with a range of specific benefits. |
| In terms of supply to the market, there has been little change over the past few years, with three major manufacturers - ICI Paints, Akzo Nobel and SigmaKalon, dominating the market. ICI Paints is regarded as the overall market leader, though all three suppliers have significant shares. |
| The DIY Multiples continue to dominate the market increasing their share to over 40%, followed by Specialists and Independents, Trade Centres, Builders Merchants and other high street retailers and mail order. Within the distribution structure, a degree of overlap is seen between domestic and trade customers and there has been a growing trend for some trade customers to switch sourcing to the DIY multiples, with Wickes and B&Q particularly strong in attracting trade customers. |
| Prospects for 2003 are currently optimistic. However, medium term prospects indicate a slowdown in annual growth rates with the market is predicted to grow by around 12% to reach an estimated £1132 million at retail prices by 2006. The driving force from the television programmes and media coverage may not be maintained and medium to long-term growth will become more dependent on innovative, value adding products. However, as the market is dominated by a few large innovative companies, the technology, budgets and innovation needed to sustain market growth are available and the outlook for the medium to long term future looks fairly positive. |
| 'Non-paintable' new materials, such as PVC-U and composites could be a major threat to the long-term growth of the market. PVC-U has become a prominent material within new build and replacement windows, doors, weatherboarding, roofline products and conservatories, which will directly affect the overall market in the longer term. Composite doors are also a major growth area particularly in new build and public sector refurbishment sectors. However this could aid the growth of an already buoyant speciality paints market with more companies developing paints that can be used on PVC-U surfaces. |
| In addition, the decoration market can be fairly unpredictable and volatile and fashions change rapidly in a relatively short time period. While there has been a decline over the last 5 years within the wallcoverings market, there could be a possible switch back to this sector in the future although due to the precarious nature of the decorative market it is always difficult to try to forecast these issues. |
TABLE OF CONTENTS
| . INTRODUCTION 7 |
| 2. SUMMARY 8 |
| 3. ECONOMIC ENVIRONMENT 11 |
| 3.1 GDP 11 |
| 3.2 INFLATION & INTEREST RATES 12 |
| 3.3 UNEMPLOYMENT & CONSUMER SPENDING 12 |
| 3.4 HOUSING & CONSTRUCTION 13 |
| 3.5 STERLING 13 |
| 3.6 CONCLUSIONS 13 |
| 4. MARKET OVERVIEW 15 |
| 4.1 INTRODUCTION 15 |
| 4.2 MARKET SIZE 16 |
| 4.3 MARKET TRENDS 17 |
| 4.4 FUTURE PROSPECTS 30 |
| 4.5 IMPORTS & EXPORTS 33 |
| 5. PRODUCT MIX 44 |
| 5.1 PAINT 44 |
| 5.1.1 Emulsion Paint 47 |
| 5.1.2 Solvent (or oil) based paints 49 |
| 5.1.3 Trade and Domestic Paint 51 |
| 5.1.4 Brand 51 |
| 5.1.5 Colour 52 |
| 5.1.6 New Product Development 55 |
| 5.1.7 Trade Paints 56 |
| 5.1.8 Paint Effects 57 |
| 5.1.9 Other Paints 58 |
| 5.2 WOODCARE 59 |
| 5.2.1 Interior Woodcare 64 |
| 5.2.2 Exterior Woodcare 65 |
| 5.2.3 Product Development 68 |
| 5.2.4 Brand 68 |
| 5.2.5 Colours 69 |
| 5.2.6 Trade 69 |
| 6. DISTRIBUTION 71 |
| 6.1 DIY MULTIPLES 73 |
| 6.1.1 B&Q 76 |
| 6.1.2 Homebase 76 |
| 6.1.3 Focus DIY Group 77 |
| 6.2 TRADE CENTRES 77 |
| 6.3 INDEPENDENTS & SPECIALISTS 79 |
| 6.3.1 Hardware & Independent DIY Stores 79 |
| 6.3.2 Paint and Wallpaper Specialists 82 |
| 6.3.3 Internet 82 |
| 6.4 BUILDERS MERCHANTS 82 |
| 6.4.1 Saint Goabin 83 |
| 6.4.2 Wolseley Centers 83 |
| 6.4.3 Travis Perkins 84 |
| 6.5 OTHER RETAIL 85 |
| 7. SUPPLIERS 86 |
| 7.1 PAINT 86 |
| 7.1.1 ICI Paints 86 |
| 7.1.2 Akzo Nobel 88 |
| 7.1.3 SigmaKalon 89 |
| 7.1.4 Other Major Manufactures 90 |
| 7.2 WOODCARE 92 |
| 7.2.1 Ronseal 93 |
| 7.2.2 Akzo Nobel 94 |
| 7.2.3 ICI Woodcare 95 |
| 7.2.4 Rustins 95 |
| 7.2.5 SigmaKalon 96 |
| 7.3 CREOSOTE 96 |
| 7.4 SPECIALIST PAINTS 96 |
| 7.5 TOOLS & DECORATIVE EFFECTS 98 |
| 8. KEY MARKET INFLUENCES 99 |
| 8.1 THE HOUSING MARKET 99 |
| 8.1.1 New House Build 99 |
| 8.1.2 Housing Starts 101 |
| 8.1.2 House Moving 102 |
| 8.1.3 The Commercial and Industrial Construction Market 103 |
| 8.2 POPULATION 104 |
| 8.3 PERSONAL DISPOSABLE INCOME AND SAVINGS RATIO 106 |
| 8.4 EMPLOYMENT/UNEMPLOYMENT 107 |
| 8.5 INTEREST RATES AND INFLATION 108 |
| 9. FUTURE PROSPECTS 110 |
DIAGRAMS
| CHART 1 THE UK PAINT & EFFECTS AND WOODCARE MARKET BY VALUE 1998-2006 (RSP) 8 |
| TABLE 2 THE UK MARKET FOR PAINT & EFFECTS AND WOODCARE £M (RSP) 1997-2006 16 |
| CHART 3 HOME IMPROVEMENT WINDOW MARKET FRAME MATERIALS 1986-2002 19 |
| CHART 4 NEW HOUSING WINDOW FRAME MATERIALS 1995 - 2001 (% BY VOLUME) 20 |
| CHART 5 THE UK DOMESTIC CONSERVATORY MARKET 1992-2005 BY VOLUME 22 |
| TABLE 6 COMPARISONS OF CONSERVATORY FRAME MATERIAL USAGE 1989-2001 23 |
| CHART 7 FRAME MATERIAL USAGE 1985-2005 24 |
| CHART 8 UK WALLCOVERINGS MARKET 1994-2004 (£M MSP) 25 |
| TABLE 9 THE UK MARKET FOR PAINT & EFFECTS AND WOODCARE £M (RSP) 2001-2006 31 |
| TABLE 10 IMPORTS AND EXPORTS OF PAINTS & VARNISHES 1997-2002 BY VALUE (£M) 33 |
| TABLE 11 TOTAL IMPORTS FOR PAINT AND WOODCARE FROM MAJOR COUNTRIES 2000-2002 BY VALUE (£000) 35 |
| CHART 12 UK IMPORTS OF PAINT AND WOODCARE PRODUCTS FROM EUROPE - MAJOR COUNTRIES 2000-2002* (£M) 36 |
| TABLE 13 TOTAL EXPORTS FOR PAINT AND WOODCARE TO MAJOR COUNTRIES 2000 - 2002 (£000) 38 |
| CHART 14 EXPORTS OF PAINT AND WOODCARE PRODUCTS WITHIN EUROPE 2000-2002* (£M) 39 |
| CHART 15 TOTAL EU DOMESTIC PAINT MARKETS 2001 41 |
| CHART 16 PAINT BY APPLICATION AREA & PURCHASER - 2002 % BY VALUE 42 |
| CHART 17 THE UK PAINT & EFFECTS MARKET BY VALUE 1997-2006 (£M RSP) 45 |
| CHART 18 UK MARKET FOR PAINT % VALUE SHARE BY PRODUCT GROUP - RETAIL 47 |
| CHART 19 UK MARKET FOR PAINT % VALUE SHARE BY PRODUCT GROUP - TRADE 48 |
| CHART 20 OVERALL MARKET SHARE OF EMULSIONS BY % VALUE 2002 49 |
| CHART 21 SHARE OF EMULSION MARKET BY COMPANY % VALUE 50 |
| CHART 22 CHANGE IN SHARE OF COLOUR 1994 - 2002 % BY VALUE 54 |
| CHART 23 THE UK WOODCARE MARKET BY VALUE 1998-2006 62 |
| CHART 24 UK MARKET FOR WOODCARE % VALUE SHARE BY PRODUCT GROUP - RETAIL 64 |
| CHART 25 UK MARKET FOR WOODCARE % VALUE SHARE BY PRODUCT GROUP - TRADE 65 |
| CHART 26 UK MARKET FOR WOODCARE % VALUE SHARE BY PRODUCT AREA 66 |
| TABLE 27 PAINT & WOODCARE MARKETDISTRIBUTION CHANNEL SHARE 2002 BY VALUE 76 |
| CHART 28 DIY MULTIPLES MARKET SHARE 2002 77 |
| CHART 29 DIY DECORATIVE PRODUCTS - SHARE BY MULTIPLE 2002 78 |
| TABLE 30 MARKET SHARES OF MAJOR PAINT SUPPLIERS 2002 BY VALUE 90 |
| TABLE 31 MARKET SHARES OF MAJOR WOODCARE SUPPLIERS 2002 BY % VALUE 97 |
| TABLE 32 HOUSEBUILDING COMPLETIONS (000'S DWELLINGS) 1992-2005 IN GREAT BRITAIN 103 |
| TABLE 33 HOUSING STARTS 1995-2005 IN GREAT BRITAIN BY SECTOR ('000) 105 |
| TABLE 34 NUMBER OF PROPERTY TRANSACTIONS IN ENGLAND AND WALES 1994-2002 106 |
| TABLE 35 CONTRACTORS OUTPUT - NEW WORK AND RMI NON HOUSING - CURRENT PRICES (£ MILLION) 1995-2004 107 |
| CHART 36 AGE DISTRIBUTION OF THE RESIDENT UK POPULATION 2001 ('000) 109 |
| CHART 37 PDI & SAVINGS RATIO 1981-2005 110 |
| CHART 38 NUMBER OF EMPLOYEES IN EMPLOYMENT GB - JUNE 1981-02 (MILLIONS) 111 |
| CHART 39 INTEREST RATES AND INFLATION (RPI) FROM 1990-2005 112 |
Text © 2003 AMA Research
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Last updated by Amanda Porteous February 2004
