The GCC paints and coatings sector in the GCC is poised for solid growth with its market size estimated to hit $4.5 billion by 2027 growing at a CAGR of 2.5% over the next five years, according to an industry expert. 

 

Paints and coatings are materials that protect surfaces from rusting, abrasion and also help in product surface durability enhancements. Such materials are made of resins like alkyd, polyester, acrylic, epoxy.

 

In GCC countries, the paint and coatings industry is rapidly developing due to its unique feature of providing glossy and decorative finishes which have increased the industrial application of paints and coating in sectors like construction and buildings, automotive, energy and power, stated Industry ARC, an analytics research company, in its report. 

 

The major drivers for the growth are rapid development in the construction sector and growing efforts to boost industrial growth, it added. 

 

However, as the GCC countries are major producers of oil and gas, the fluctuation in the price of crude oil can disrupt the manufacturing of oil-derived paints and coatings type like oil-based coating. 

 

Such disruption in manufacturing can hamper the growth of the GCC paints and coatings industry, it cautioned.

 

Covid-19 Impact

 

Gulf countries are major manufacturers of crude oil and natural gas and the major sectors such as construction, automotive, oils refinery are the major contributors to the economic growth of such countries. 

 

To prevent Covid-19 from spreading, lockdown and other social restrictions like social distancing, quarantining were imposed by the governments of Gulf countries. Such restriction negatively impacted the functioning of these sectors as there was a shortage of labour in work plants, automotive car sales declined due to shutdown of auto workshops and fewer cars being imported due to import restrictions, the decline in global oil demand led to cut-back of oil supplies to major exporters and construction activities were halted, stated the report by Industry ARC. 

 

For instance, 2020 auto sales in the UAE plunged 45% and sales of auto parts fell by 50%. Also, the output of the construction sector for 2020 contracted by 10.4% in UAE. 

 

Hence such a decrease in the production and supply in such sectors negatively impacted the demand for automotive refinish paint in the automotive sector and protective coating & maintenance in oil refineries, it added.

 

'Resin' paints top GCC market

 

Acrylic resin held the largest share in the GCC paints and coatings market in 2021, with a share of over 40%, thanks to several key factors like acrylic resin having a high drying rate, it being anti-corrosive and anti-adhesive with tremendous flexibility, and has resistance properties that make it suitable to be used as paints and coatings. 

 

Hence such resin type is mostly used in architectural coatings for interior and exterior walls, panels, said the report by Industry ARC. 

 

The increasing number of infrastructure projects will have a positive effect on the demand for acrylic resin, it stated. 

 

"For instance, Abu Dhabi's government announced in 2020 an ambitious plan to procure over $2.72 billion worth of infrastructure partnership projects. Also, as per the Ministry of Finance of Oman, in 2021 a total of $3.4 billion will be spent on infrastructure projects including basic facilities like hotels, resorts and other facilities," said a spokesman for Industry ARC. 

 

"Hence with such an increase in the number of infrastructure projects, the demand for acrylic resin architectural paintings and coatings will also increase thereby providing positive growth to the GCC paints & coatings industry," he added.

 

Water-borne coatings hog limelight

 

Water-borne coatings held the largest share in the GCC paints and coatings market in 2021, with a share of over 45%. 

 

This owns to factors like water-borne coatings have quick dry rate, low odor, are more durable, more block resistance and have very low VOC emission. Hence such rich properties make water-borne coating highly applicable as decorative paints. in residential and commercial segments. 

 

In 2021, Oman's Ministry of Housing and Urban Planning five new integrated projects that would provide 4800 housing units. Also, in 2021 Bahrain's Ministry of Housing launched the Salman City Expansion project in which 1382 apartments will be constructed by the second quarter of 2023. 

 

Hence as waterborne coatings are used in interior and exterior architectural coatings for commercial as well as residential segments, so increase in the number of housing segments in such countries will lead to more usage of waterborne coatings in them, thereby positively impacting the growth of GCC paints and coatings industry.

 

Saudi Arabia gets lion's share

 

Construction held the largest share in the GCC paints and coatings market in 2021, with over 35%. The sector is one of the major GDP contributors and the growing volume of residential and commercial buildings, infrastructure projects, and increase in construction budget to boost economic growth will have a positive impact on the demand for paints and coatings in GCC countries, stated the report by Industry ARC. 

 

Region wise, Saudi Arabia dominated the GCC paints and coatings market with a share of over 30%; buoyed by the fact that it is the largest oil producer in the Middle East and also the biggest construction as well as automotive market in the region.

 

The country has undertaken several various projects to promote economic growth. For instance, in 2021 the country had $1.5 trillion worth of active projects including major projects like Al Qassim Power plant project, red sea project, Neom Business city and NGL Fractionation plant. 

 

The construction sector in the GCC countries like Saudi Arabia and UAE is rapidly growing owing to an increase in demand for affordable housing, increasing investments for infrastructures development, and a new line of projects being planned. 

 

Hence as the volume of construction activities in such gulf countries is increasing on account of such new construction projects, it will create demand for paints and coatings products such as enamel paint, anti-corrosive paint, plastic paint, the report added.-TradeArabia News Service