The Middle-East paints and coatings market is estimated to witness a significant growth, at an estimated CAGR of over 3.5%, over the forecast period. Paints and coatings are used for various applications in interiors and exteriors of houses for protection from blistering summers, freezing winters, soaking rain, and also from UV radiation.
- Increase in the construction of hotels and restaurants, re-painting of old hotels and maintenance of architectural and decorative infrastructure (to attract the tourists), are expected to boost the market studied.
- The paints and coatings industry is exhibiting its concern over harmful VOCs emissions. The conventional petroleum-based products are constantly coming under the scanner, owing to the increasing efforts to reduce carbon footprints. These very concerns have encouraged the emergence of bio-based paints and coatings, which are eco-friendly in nature, are projected to act as an opportunity for the market in the future.
Key Market Trends
Increasing Demand from the Architectural Industry
- Paints and coatings are extensively used in the architectural sector for both exterior and interior applications. Paints and coatings are applied on the exterior of the house, not only to give them a new look, but also to protect it from blistering summers, freezing winters, soaking rain, and the daily exposure of UV radiation (without fading, peeling away, and cracking the exteriors).
- Paints and coatings are also used in the interiors of houses to add color or for decorative purposes, along with a wide range of other functions. The functions vary depending upon the type of environment and room that they are used on. For example, paints with glossier sheens have a tighter molecular structure than flat paints, making it more difficult for moisture to penetrate, and hence are used in bathroom walls. Most ceilings are painted flat white so that they could reflect most of the ambient light in the room to give the resident a spacious and relaxed.
- The construction industry in the Middle East has been steadily coming in track, since 2014. Construction demand is expected to be strongest in Saudi Arabia, followed by Iran, Iraq, and United Arab Emirates. Qatar and Kuwait are expected to register the highest growth rates for the next three years through 2020.
- These developments in construction sector is partly due to the robust economic growth and its positive implications on corporate profits, household income, and the state of public finances.
- All the aforementioned factors are expected to drive the Middle-East paints and coatings market in the architectural industry during the forecast period.
Saudi Arabia to Dominate the Market
- Saudi Arabia is by far the largest national market in the Middle East, accounting for nearly half of the total demand for paints and coatings in the region. According to the International Monetary Fund (IMF), the kingdom has announced a bold reform program under its Vision 2030, due to which growth is expected to be robust over the medium-term as structural reforms are implemented.
- The country has generated large-scale projects worth USD 800 billion to boost its infrastructure in the coming years. The government has expansive plans for the development of social infrastructure, transportation, and energy and utility construction in the country. The country’s primary growth in construction has been largely powered by the massive investments done by the government and increased inflow of FDI.
- Rapid urbanization increase in population growth and tourism are expected to drive growth in the building sector especially in the residential and leisure markets. The government is stepping up investment in KSA’s transport infrastructure, fast-tracking key projects and creating new opportunities for service sector.
- The other major end-user industry is automotive. Saudi is focusing on establishing itself as the new automotive hub in the Middle East. Though the country is a large importer of vehicles and auto parts, it is now trying to attract original equipment manufacturers (OEMs) to open their production plants in the country to develop the domestic auto industry. All such development is expected to drive the paints & coatings market in the region during the forecast period.
Middle Eastern paints & coatings market is a fragmented market, with the top six players contributing to about 35% of the market share. Key players in the market include Akzo Nobel N.V., Jazeera Paints, Jotun, PPG Industries, Inc., and National Paints Factories Co. Ltd, among others.
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