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U.S. Elastomeric Coatings Markets
F397-39
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Table of Contents
C h a p t e r 1
Executive Summary
Market Overview 1-1
Introduction 1-1
Competitive Analysis 1-2
Market and Product Trends 1-3
Market Trends 1-3
Product Trends 1-3
Major Research Findings 1-3
Opportunities and Forecasts 1-3
Market Drivers 1-4
Market Restraints 1-4
Market Segment Analysis 1-5
Elastomeric Wall Coatings Market 1-5
Market Drivers 1-5Market Restraints 1-5
Elastomeric Floor Coatings Market 1-5
Market Drivers 1-5Market Restraints 1-5
Elastomeric Roof Coatings Market 1-5
Market Drivers 1-5Market Restraints 1-6
Strategic Conclusions 1-6
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C h a p t e r 2
Market Dynamics
Market Definitions 2-1
Glossary of Terms 2-1
List of Abbreviations 2-3
Industry Challenges 2-3
Introduction 2-3
Industry Challenges 2-3
Meeting Environmental Regulations 2-4
Increasing Raw Material and Fuel Prices Affect Profitability 2-4
Creating Bright and Darker Colors 2-4
C h a p t e r 3
Overall U.S. Elastomeric Coatings Market
Introduction 3-1
Market Overview 3-1
Market Overview and Scope of the Study 3-3
Market Engineering Measurements 3-4
Market Size 3-4
Market Age 3-5
Distribution 3-5
Direct Sale to Contractors 3-6Sales through Distributors 3-6Sales through Distributors as well as Direct Sale to Contractors 3-6
Competition 3-6
Product Analysis 3-7
Construction Market Update 3-8
Forecasts and Trends 3-9
Market Drivers 3-9
Growth in Construction Fuels Elastomeric Coatings’ Demand 3-9
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Need for High-performance Coatings Boosts Demand For Elastomerics 3-10
Elastomeric Coatings Experience Growth at the Expense of Other Coatings 3-10
Market Restraints 3-11
Higher Cost of Elastomeric Coatings Restrain Growth 3-11
Competition from Other Coatings Affect Elastomeric Coatings Market 3-11
General Complexity in Application Constrains Growth 3-12
Revenue Forecasts 3-12
Market and Product Trends 3-13
Market Trends 3-13
Revenue Share Trends by Application Market 3-13VOC Regulations Play a Role in Widening the Gap Between Small and Large Manufacturers 3-15
Product Trends 3-15
Creating Coatings with Improved Properties 3-15Trend toward Zero VOC Coatings 3-16Growth in Use of Acrylic-based Elastomeric Coatings 3-16Incorporation of Ceramic Microspheres in Acrylic Elastomeric Coatings 3-16
Pricing Trends 3-16
Price Determinants 3-16
Chemistry of the Coating 3-16Region in which it is Sold 3-17Size of the Project 3-17Performance Requirements 3-17
Pricing 3-17
Pricing Trends 3-17
Competitive Analysis 3-18
Competitive Structure 3-18
The Size and Operation of the Company 3-19
The Type of Company 3-20
Distribution Structure 3-20
Competitive Factors 3-21
Market Participants 3-22
Degussa Construction Systems Americas 3-22
The Sherwin- Williams Company 3-22
Dow Corning Corporation 3-22
3M 3-22
ICI Paints 3-22
Neogard, a division of Jones-Blair Company 3-23
Elastomeric Roofing Systems, Inc. (ERSystems) 3-23
National Coatings Corporation 3-23
Tamms Industries, Incorporated 3-23
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Nationwide Chemical Coatings Manufacturers, Incorporated 3-23
Henry Company 3-24
Market Share Analysis 3-24
Market Engineering Strategies 3-25
Introduction 3-25
What is a Market Engineering Strategy? 3-25
Strategic Recommendations 3-25
Strategic Recommendations 3-25
Meeting Environmental Regulations 3-25
Increased Raw Material and Fuel Prices 3-26
Creating Brighter and Darker Coatings 3-26
Frost & Sullivan Awards 3-26
Market Leadership Award 3-26
Research Methodology 3-26
Measurement Criteria 3-27
Award Recipient: The Sherwin-Williams Company 3-27
Strong Research and Development Focus 3-28
Close Contact with Key Users 3-28
Expansion Plans 3-29
Strategic Acquisition 3-29
Growth Strategy Leadership Award 3-29
Research Methodology: 3-29
Measurement Criteria: 3-30
Award Recipient: Neogard 3-30
Customized Product Line 3-31
Creating Brand Value 3-32
Strategic Partnership 3-32
Efficient Distribution Channels 3-33
Product Line Strategy Leadership Award 3-33
Research Methodology 3-33
Measurement Criteria 3-34
Award Recipient: Degussa Construction Systems Americas 3-34
Ability to Address Customer Requirements 3-36
Major Presence in Two of the Three Market Segments 3-36
Research and Development Focus 3-36
Strong Brand Image 3-37
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Concluding Comments 3-37
Product Quality Leadership Award 3-37
Research Methodology 3-37
Measurement Criteria 3-38
Award Recipient: United Coatings 3-38
Superior Research and Development Capapbilities 3-39
Manufacture of Low Volatile Organic Compound (VOC) Products 3-39
Contacts with End Users 3-40
Strategic Partnership 3-40
Conclusion 3-40
C h a p t e r 4
U.S. Elastomeric Wall Coatings Market
Introduction 4-1
Market Overview 4-1
Market Engineering Measurements 4-2
Market Size 4-3
Market Age 4-3
Competition 4-4
Distribution Structure 4-4
Forecasts and Trends 4-5
Market Drivers 4-5
Popularity of Tilt-up Concrete in Building Construction Fuels Demand for Elastomeric Coatings 4-5
Product Functionality Increases Sales 4-5
Market Restraints 4-6
Increasing Interest Rates for New Home Starts Check Growth 4-6
Tendency of Acrylic Elastomeric Coatings to Blister Impedes Growth 4-6
Lack of Darker and Brighter Shades Affect Wall Coatings Market 4-7
Revenue Forecasts 4-7
Market and Product Trends 4-8
Market Trends 4-8
Large Companies are Growing Faster Than Smaller Companies 4-8Demand for the Application of a Single Thick Coat 4-9Product Trends 4-9
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Pricing Trends 4-9
Prices of Elastomeric Wall Coatings 4-9
Pricing Trends 4-9
Competitive Analysis 4-10
Competitive Structure 4-10
Paint Companies 4-11
Chemical Companies 4-11
Specialty Companies 4-11
Competitive Factors 4-11
Brand Image 4-11Price 4-12Technical Assistance 4-12
Market Participants 4-12
The Sherwin-Williams Company 4-12
Degussa Construction Systems Americas 4-12
ICI Paints 4-13
Dow Corning Corporation 4-13
Sto Corporation 4-13
Dryvit Systems, Inc. 4-13
Benjamin Moore & Co. 4-13
IPA Systems, Inc 4-13
Market Share Analysis 4-14
Tier 1 Companies 4-14
Tier 2 Companies 4-14
Tier 3 Companies 4-14
Strategic Analysis by Products 4-15
Acrylic Elastomeric Coatings 4-15
Market Overview 4-15
Competitive Analysis 4-15
Silicone Elastomeric Coatings 4-16
Overview 4-16
Competitive Analysis 4-16
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C h a p t e r 5
U.S. Elastomeric Floor Coatings Market
Introduction 5-1
Market Overview 5-1
Market Engineering Measurements 5-2
Market Size 5-3
Market Age 5-3
Competition 5-3
Distribution 5-3
Forecasts and Trends 5-5
Market Drivers 5-5
High Performance Requirements Create Demand for Elastomeric Coatings 5-5
Fast Setting Time of Polyurethanes and Polyureas Spurs Growth 5-5
Market Restraints 5-6
Higher Cost of Polyurethane and Polyurea-based Elastomeric Floor Coatings Affect Growth 5-6
Use of Special Skills and Equipment to Apply Restrains Growth 5-6
Competition from Epoxies, Cementitious Products Check Growth 5-7
Revenue Forecasts 5-7
Market and Product Trends 5-8
Market Trends 5-8
Small Manufacturers are Gaining Market Share 5-8Move toward Distribution of Coatings through Independent Distributors 5-8
Product Trends 5-9
High Demand for Polyurea-based Elastomeric Coatings 5-9Hybrid Products Emerging in the Coatings Market 5-9Increase in Acrylic Reinforced Products 5-9
Pricing Trends 5-10
Pricing 5-10
Pricing Trends 5-10
Competitive Analysis 5-10
Competitive Structure 5-10
Competitive Factors 5-12
Market Participants 5-12
Neogard, a division of Jones- Blair Company 5-12
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3M 5-13
Degussa Building Systems 5-13
LymTal International Inc. 5-13
Allied Waterproofing Inc. 5-13
Market Share Analysis 5-14
Strategic Analysis by Products 5-15
Polyurethane Elastomeric Coatings 5-15
Competitive Analysis 5-15
Polyurea Elastomeric Coatings 5-16
Competitive Analysis 5-16
Acrylic Elastomeric Coatings 5-16
Competitive Analysis 5-16
C h a p t e r 6
U.S. Elastomeric Roof Coatings Market
Introduction 6-1
Market Overview 6-1
Market Engineering Measurements 6-2
Market Size 6-3
Market Age 6-4
Competition 6-4
Distribution 6-4
Forecasts and Trends 6-5
Market Drivers 6-5
Lesser Life-cycle Cost of Elastomeric Coatings Drives Demand 6-5
Increasing Demand for Environmentally-Friendly Coatings Favors Elastomeric Coatings 6-6
Government Encouragement to Use White Solar Reflective Coatings Drives Growth 6-6
Trend in Roofing Material Favors Elastomeric Coatings 6-6
Market Restraints 6-7
Application Limitations of Elastomeric Coatings Restricts Growth 6-7
Competition From Other Roof Coatings Limits Growth 6-7
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Revenue Forecasts 6-8
Market and Product Trends 6-9
Market Trends 6-9
Roofing Companies Entering the Coatings Market 6-9Product Trends 6-9
Companies Concentrate on Manufacturing Fast Cure Coatings 6-9Acrylic and Polyurea-based Elastomeric Roof Coatings Grow Faster 6-10Breakthrough Product 6-10
Pricing Trends 6-10
Pricing 6-10
Pricing Trends 6-10
Competitive Analysis 6-11
Competitive Structure 6-11
Roofing Companies 6-11
Specialty Companies 6-12
Chemical Companies 6-12
Paint Companies 6-12
Competitive Factors 6-12
Company Credentials 6-12Energy Star’s Approval 6-13Warranty 6-13Price 6-13
Market Participants 6-13
Henry Company 6-13
United Coatings 6-13
National Coatings Corporation 6-14
Elastomeric Roofing Systems, Inc (ERSystems) 6-14
Structural Elastomeric Products, Inc 6-14
Aldo Products Company, Inc 6-14
Market Share Analysis 6-15
Strategic Analysis by Products 6-16
Acrylic Elastomeric Coatings 6-16
Competitive Analysis 6-16
Polyurethane Elastomeric Coatings 6-16
Competitive Analysis 6-17
Silicone Elastomeric Coatings 6-17
Competitive Analysis 6-17
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C h a p t e r 7
Appendix
Decision Support Database Tables 7-1
Historical U.S. New Construction by Type 7-1
U.S. New Onsite(Put in Place) Construction Forecast 7-2
U.S. Residential Remodelling and Repair Forecasts 7-3
U.S. Nonresidential Remodelling and Repair Forecasts 7-4
U.S. Roof Renovation Spending Forecasts 7-5
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List of Figures
C h a p t e r 1
Executive Summary
1-1 Elastomeric Coatings Market:
Revenue Forecasts (U.S.), 2001-2011 1-4
C h a p t e r 2
Market Dynamics
2-1 Elastomeric Coatings Market:
Impact of Top Three Industry Challenges (U.S.), 2005-2011 2-3
C h a p t e r 3
Overall U.S. Elastomeric Coatings Market
3-1 Elastomeric Coatings Market:
Distribution Channel Followed by Key Suppliers (U.S.), 2004 3-5
3-2 Elastomeric Coatings Market:
Market Drivers Ranked in Order of Impact (U.S.), 2005-2011 3-9
3-3 Elastomeric Coatings Market:
Market Restraints Ranked in Order of Impact (U.S.), 2005-2011 3-11
3-4 Elastomeric Coatings Market:
Revenue Forecasts (U.S.), 2001-2011 3-12
3-5 Elastomeric Coatings Market:
Percent of Revenues by Product Type (U.S.), 2001-2011 3-14
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3-6 Elastomeric Coatings Market:
Competitive Structure (U.S.), 2004 3-18
3-7 Elastomeric Coatings Market:
Database of Key Industry Participants by End-User Market Participation (U.S.), 2004 3-19
3-8 Elastomeric Coatings Market:
Elastomeric Coatings Manufactured by Degussa Construction Systems Americas 3-35
C h a p t e r 4
U.S. Elastomeric Wall Coatings Market
4-1 Elastomeric Wall Coatings Market:
Distribution Channel Followed by Key Suppliers (U.S.), 2004 4-4
4-2 Elastomeric Wall Coatings Market:
Market Drivers Ranked in Order of Impact (U.S.), 2005-2011 4-5
4-3 Elastomeric Wall Coatings Market:
Market Restraints Ranked in Order of Impact (U.S.), 2005-2011 4-6
4-4 Elastomeric Wall Coatings Market:
Revenue Forecasts (U.S.), 2001-2011 4-7
4-5 Elastomeric Wall Coatings Market:
Competitive Structure (U.S.), 2004 4-10
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C h a p t e r 5
U.S. Elastomeric Floor Coatings Market
5-1 Elastomeric Floor Coatings Market:
Distribution Channel Followed by a Few Key Suppliers (U.S.), 2004 5-4
5-2 Elastomeric Floor Coatings Market:
Market Drivers Ranked in Order of Impact (U.S.), 2005-2011 5-5
5-3 Elastomeric Floor Coatings Market:
Market Restraints Ranked in Order of Impact (U.S.), 2005-2011 5-6
5-4 Elastomeric Floor Coatings Market:
Revenue Forecasts (U.S.), 2001-2011 5-7
5-5 Elastomeric Floor Coatings Market:
Competitive Structure (U.S.), 2004 5-11
5-6 Elastomeric Floor Coatings Market:
Company Market Share by Revenue (U.S.), 2004 5-14
C h a p t e r 6
U.S. Elastomeric Roof Coatings Market
6-1 Elastomeric Roof Coatings Market:
Distribution Channel Followed by a Few Key Suppliers (U.S.), 2004 6-4
6-2 Elastomeric Roof Coatings Market:
Market Drivers Ranked in Order of Impact (U.S.), 2005-2011 6-5
6-3 Elastomeric Roof Coatings Market:
Market Restraints Ranked in Order of Impact (U.S.), 2005-2011 6-7
6-4 Elastomeric Roof Coatings Market:
Revenue Forecasts (U.S.), 2001-2011 6-8
6-5 Elastomeric Roof Coatings Market:
Competitive Structure (U.S.), 2004 6-11
6-6 Elastomeric Roof Coatings Market:
Company Market Share by Revenue (U.S.), 2004 6-15
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C h a p t e r 7
Appendix
7-1 Decision Support Database:
Value of New Construction by type—USA (Million USD) 7-1
7-2 Decision Support Database:
US—Value of New Construction Put in Place (USD Million), 2001—2011 7-2
7-3 Decision Support Database:
Spending on Remodeling and Repairs of all Residential Properties—US, 2001—2011 7-3
7-4 Decision Support Database:
Nonresidential Remodeling and Repairs—US, 2000—2011 7-4
7-5 Decision Support Database:
Money Spent on Renovating Roofs —US, 2001—2011 7-5
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List of Charts
C h a p t e r 3
Overall U.S. Elastomeric Coatings Market
3.1 Overall Elastomeric Coatings Market:
Market Engineering Measurements (U.S.), 2004 3-4
3.2 Overall Elastomeric Coatings Market:
Revenue Forecasts (U.S.), 2001-2011 3-13
3.3 Percent of Revenues by product type (U.S.), 2001-2011 3-14
3.4 Elastomeric Coatings Market:
Strengths of Sherwin-Williams as a Market Leader (U.S.), 2004 3-27
3.5 Elastomeric Coatings Market:
Key Strategies adopted by Neogard (U.S.), 2004 3-31
3.6 Elastomeric Coatings Market:
Strengths of United Coatings (U.S.), 2004 3-39
C h a p t e r 4
U.S. Elastomeric Wall Coatings Market
4.1 Elastomeric Wall Coatings Market:
Market Engineering Measurements (U.S.), 2004 4-3
4.2 Elastomeric Wall Coatings Market:
Revenue Forecasts (U.S.), 2001-2011 4-8
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C h a p t e r 5
U.S. Elastomeric Floor Coatings Market
5.1 Elastomeric Floor Coatings Market:
Market Engineering Measurements (U.S.), 2004 5-2
5.2 Elastomeric Floor Coatings Market:
Revenue Forecasts (U.S.), 2001-2011 5-8
5.3 Elastomeric Floor Coatings Market:
Company Market Share by Revenues (U.S.), 2004 5-14
C h a p t e r 6
U.S. Elastomeric Roof Coatings Market
6.1 Elastomeric Roof Coatings Market:
Market Engineering Measurements (U.S.), 2004 6-3
6.2 Elastomeric Roof Coatings Market:
Revenue Forecasts (U.S.), 2001-2011 6-8
6.3 Elastomeric Roof Coatings Market:
Company Market Share by Revenues (U.S.), 2004 6-15
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1Executive Summary
M a r k e t O v e r v i e w
Introduction
This study discusses the elastomeric coatings market in the United States. Elastomeric
coatings have the ability to waterproof substrates and the ability to bridge cracks smaller
than 1/16th of an inch. These coatings extend by about 200 to 400 percent, permitting them
to expand and contract along with their substrates during summertime. They are made five to
ten times thicker than conventional paints, which helps them to cover surface irregularities.
The study identifies and discusses the trends in the U.S. elastomeric coatings market for the
period 2001 to 2011, with 2004 as the base year. The forecast period is from 2005 to 2011.
The study also discusses the key market drivers and restraints, provides in-depth market and
competitive analysis, and offers strategic recommendations to succeed in this highly
competitive market. In this study, the U.S. elastomeric coatings market has been divided into
the following three broad application segments:
■ Elastomeric wall coatings market
■ Elastomeric floor coatings market
■ Elastomeric roof coatings market
The growth prospects of elastomeric coatings is heavily dependent on the construction
industry, for the purpose of which decision support database (DSD) tables have been
provided in the appendix. These tables highlight the historical and forecast construction data
that provide a better understanding of the elastomeric coatings market in the United States.
This study focuses on the building construction applications of elastomeric coatings and
excludes industrial and automotive applications. Elastomeric sealants, adhesives, grouts, and
so on are also excluded from consideration in the study.
The estimated market sizes are based on the total sales of elastomeric coatings in the United
States. They do not represent the amount of material produced in the country.
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Competitive Analysis
The elastomeric coatings market in the United States is very fragmented with about
200 suppliers. Most of these companies participate in one, or a maximum of two end-user
segments. The larger companies usually supply coatings to meet a variety of applications
within a particular segment, while many of the smaller companies focus on very niche
markets. Most companies also favor a particular chemistry for the manufacture of their
elastomeric coatings, which could be due to their area of expertise.
In this study, the participating companies have been classified in two ways depending on:
The size and operation of the company:
■ Large national suppliers
■ Small regional suppliers
The type of company:
■ Chemical companies
■ Paint companies
■ Construction companies
■ Specialty companies
The following are the value chain members in a typical elastomeric coatings buying process:
■ Manufacturers or suppliers of elastomeric coatings
■ Distributors that stock and sell elastomeric coatings to contractors
■ Contractors or applicators that buy elastomeric coatings from distributors or source itdirectly from manufacturers
■ Architects and engineers that play a vital role in selecting the elastomeric coatings
■ Commercial or residential complex owners also play a role in the selection of theelastomeric coatings
The following competitive factors were identified as being key to succeeding in this market:
■ Price
■ Quality of products
■ Reputation of the company
■ Warranty
■ Environmental compliance
■ Ease of application
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Market and Product Trends
The following are the major market trends and product trends which the elastomeric coatings
market is witnessing in the United States.
M a r k e t T r e n d s
■ Elastomeric roof coating revenues are expected to overtake elastomeric wall coating
revenues by 2011
■ Volatile Organic Compounds regulations are likely to play a role in widening the gap
between small and large manufacturers
P r o d u c t T r e n d s
■ Manufacture of coatings with improved properties
■ Trend toward zero VOC elastomeric coatings
■ Growth in the use of acrylic-based elastomeric coatings
■ Incorporation of ceramic microspheres in acrylic elastomeric coatings
M a j o r R e s e a r c h F i n d i n g s
Opportunities and Forecasts
Figure 1-1 represents the revenue forecasts of the U.S. elastomeric coatings market for the
period 2001-2011.
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Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
Total revenues from this market for 2004 were $620.0 million and are projected to increase
to $1,216.7 million in 2011, with a compound annual growth rate (CAGR) of 10.1 percent
for the period 2004-2011.
M a r k e t D r i v e r s
The key drivers for the U.S. elastomeric coatings market are:
■ Growth in construction fuels market demand
■ Need for high-performance elastomeric coatings boosts market demand
■ Elastomeric coatings experience growth at the expense of other coatings
M a r k e t R e s t r a i n t s
The key restraints for the U.S. elastomeric coatings market are:
■ Higher cost of elastomeric coatings restrains growth
■ Competition from other coatings affects elastomeric coatings market
■ General complexity in application constrains growth
F i g u r e 1 - 1
Elastomeric Coatings Market: Revenue Forecasts (U.S.), 2001-2011
Revenue
Revenues Growth Rate
Year ($ Million) (%)
2001 483.0 ---
2002 519.4 7.5
2003 563.8 8.5
2004 620.0 10.0
2005 685.8 10.6
2006 758.6 10.6
2007 837.0 10.3
2008 918.2 9.7
2009 1,009.3 9.9
2010 1,108.0 9.8
2011 1,216.7 9.8
Compound Annual Growth Rate (2004-2011): 10.1%
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Market Segment Analysis
E l a s t o m e r i c W a l l C o a t i n g s M a r k e t
Market Drivers
■ Popularity of tilt-up concrete in building construction fuels demand for elastomeric
coatings
■ Product functionality increases sales
Market Restraints
■ Increasing interest rates for new home starts check growth
■ Tendency of acrylic elastomeric coatings to blister impedes growth
■ Lack of darker and brighter shades affects wall coatings market
E l a s t o m e r i c F l o o r C o a t i n g s M a r k e t
Market Drivers
■ High performance requirements create demand for elastomeric coatings
■ Fast setting time of polyurethane and polyurea spurs growth
Market Restraints
■ Higher cost of polyurethane and polyurea-based elastomeric floor coatings affects
growth
■ Use of special skills and equipments to apply restrains growth
■ Competition from epoxies and cementitious products check growth
E l a s t o m e r i c R o o f C o a t i n g s M a r k e t
Market Drivers
■ Lesser life cycle cost of elastomeric coatings drives demand
■ Increasing demand for environment-friendly coatings favors elastomeric coatings
■ Government encouragement to use white solar-reflective coatings drives growth
■ Trends in roofing material favor elastomeric coatings
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Market Restraints
■ Application limitations of elastomeric coatings restrict growth
■ Competition from other roof coatings limits growth
Strategic Conclusions
The U.S. elastomeric coatings industry is faced with the following challenges:
■ Meeting environmental regulations
■ Increasing raw material and fuel prices affects profitability
■ Creating bright and darker colors
Some of the key strategies to counter these challenges could be:
■ Continuous investment into research and development
■ Development of cost-efficient coatings
■ Internal cost reduction
■ Working together with facility owners, applicators, or painting contractors
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2Market Dynamics
M a r k e t D e f i n i t i o n s
Glossary of Terms
Abrasion Resistance: It is the ability of a coating to resist degradation due to mechanical
wear.
Acrylic: Any plastic polymer that contains at least one version of methacrylate monomer,
including but not limited to methylmethacrylate or butylmethacrylate
Adhesion: The degree of attachment or bonding of one substance to another.
Asphalt: A dark brown to black bituminous sticky substance, solid or semisolid in
consistency, found in natural beds and also obtained as a residue in petroleum refining. It
consists chiefly of hydrocarbons. The principal ingredient in asphalt is mastics.
Breathable Coating: A coating with a perm rating above 0.5. It is the opposite of a vapor
retarder. The higher the perm rating, the more breathable the coating.
Coat: The paint applied to a surface in one application that forms a film when dry.
Coating: A finish used to create a protective and/or decorative layer on a surface.
Synonymous with the term ’paint.’
Coverage Rate: Quoted either as square feet covered by a gallon (50 ft2/gal ) or as gallons
used per square (2 gal/square). A square is 100 square feet.
Cure: The process by which a coating becomes a hard film.
Dirt Pickup: The accumulation of dirt on the sealant surface during or after sealant cure.
Elastomer: A material capable of elongating at least 100 percent and recovering its original
dimensions.
Elongation: Lengthening or stretching ability to accommodate movement.
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Epoxy: An adhesive containing epoxide groups, which may be cross-linked through a
chemical reaction. Usually, these are two-part systems that need to be added together before
the reaction will proceed.
Film Thickness: The thickness of a membrane, normally measured in mils.
Gloss: The luster or shininess in paints and coatings.
Grout: Cement or mortar used to seal between precast concrete planks in a roof deck.
Lining: A material used to provide corrosion protection to a container, and/or protect the
contents of the container from contamination by the material of the container.
Mil: A unit in measuring thickness, being 0.001 inch.
Permeability: The degree to which liquid or gas can penetrate and pass through a coating
layer.
Polymer: A chemical compound or mixture of compounds formed essentially of repeating
structural units.
Polyurethane: Urethane is an organic compound formed by the reaction between an
isocyanate and a polyol. Polyurethane coatings provide high levels of gloss retention,
weatherability, flexibility, resistance to chemicals and solvents, and abrasion.
Primer: A chemical material that improves the bond of the sealant or the coating of the
substrate.
Solids Content: The percentage of nonvolatile matter that may be measured in volume or
weight.
Solvent: Any substance, usually a liquid, that dissolves other substances. In coatings,
normally a liquid organic compound used to make a fluid coating be applied more freely.
Substrate: The surface to be painted.
Tensile Strength: The force per unit area that is applied at the time of rupture of the
specimen. It is calculated by dividing the breaking force in pounds by the cross-section of the
unstretched specimen in square inches.
UL Rating: A flammability rating system for materials tested by Underwriters Laboratories.
UL classifies or lists material that pass specific tests.
UV: Ultraviolet radiation or sunlight.
Volatile Organic Compound (VOC): Solvent portion of a paint that evaporates while forming
a dry film of paint.
Volume Solids: The percentage of nonvolatile substance present in a coating material.
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List of Abbreviations
CMU: Concrete Masonry Unit
EIFS: Exterior insulation and finish systems
EPA: Environmental Protection Agency
MDI: Diphenyl Methane diisocynate
R&D: Research and Development
SPF: Spray polyurethane foam
UV. Ultraviolet radiation
VOC: Volatile organic compound
I n d u s t r y C h a l l e n g e s
Introduction
A challenge is any issue that affects the industry’s overall performance or influences
competition and includes consumer issues, regulatory programs, economic trends, market
measurement trends, competitive strategies, new technologies, sales and marketing strategies,
new market opportunities, and market threats. It is a predicament which companies find
difficult to face.
Industry Challenges
Figure 2-1 lists the impact of the top three challenges facing the U.S. elastomeric coatings
industry during the period 2005 to 2011.
Source: Frost & Sullivan
These challenges have been identified and ranked in the order of their impact.
F i g u r e 2 - 1
Elastomeric Coatings Market: Impact of Top Three Industry Challenges (U.S.), 2005-2011
Challenge 1-2 Years 3-4 Years 5-7 Years
Meeting environmental regulations High High High
Increasing raw material and fuel prices affect profitability High High/ Medium High/ Medium
Creating brighter and darker colors Low Low Low
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M e e t i n g E n v i r o n m e n t a l R e g u l a t i o n s
Different state governments have different volatile organic compound (VOC) regulations.
Hence, coating manufacturers are under pressure to manufacture environment-friendly prod-
ucts that are compliant with the regulations prevalent in respective areas. This serves as a
challenge to companies participating in this market as the state governments continuously
introduce newer and more stringent regulations periodically, forcing coatings manufacturers
to be alert and ready to modify their product lines.
Since the larger companies already have the research and development (R&D) set up in place,
the VOC regulatory compliance does not to affect them to a large extent. The smaller partic-
ipants and the midsize companies are particularly affected because they lack the resources
and infrastructure. Most of the large companies provide effective solutions in advance to
meet a particular regulation. Nevertheless, this issue continues to be a major challenge, with
the impact being high, as the entire United States is moving towards zero VOC in coatings.
I n c r e a s i n g R a w M a t e r i a l a n d F u e l P r i c e s A f f e c t
P r o f i t a b i l i t y
All elastomeric coatings are dependant on crude oil and its derivatives for their manufacture.
Since crude oil prices have been un-predictably exploding, manufacturers of elastomeric
resins such as butyl acrylate and polymeric diphenyl methane di isocynate (MDI) have been
unable to absorb these costs and have increased their prices by 10 to 30 percent accordingly.
This in turn has led elastomeric coatings manufacturers to pass on a part of the costs to the
end users, increasing prices by 5 to 10 percent on the entire range
This challenge has a major impact on small- and medium-size companies. Larger organiza-
tions are able to better utilize their resources and avail raw materials at cheaper prices due to
their superior bargaining power, making them better positioned to contain the hike in prices.
Nevertheless the unpredictable nature of raw materials and fuel supply, combined with
ever-increasing prices, presents a major challenge to all the manufacturers participating in
this market.
C r e a t i n g B r i g h t a n d D a r k e r C o l o r s
Despite progressing enormously on the technology front, elastomeric coatings still come infew light shades when compared to ordinary latex/acrylic paints, which are available innumerous colors. This is because brighter and darker elastomeric coatings contain pigmentsthat are UV-sensitive, leading the coatings to degrade and loose color when continuouslyexposed to sunlight. Elastomeric coatings mostly are applied over exterior walls, roofs, andfloors, among which the walls and the roofs are most exposed to sunlight. This presents aserious challenge, more so, to elastomeric wall coatings manufacturers as they are underpressure to serve end users better, who sometimes demand unusually bright and dark shades,besides other superior properties.
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3Overall U.S. Elastomeric Coatings Market
I n t r o d u c t i o n
Market Overview
Elastomeric coatings are a class of high performance, heavy-duty, and internally plasticized
flexible coatings that have the unique ability to bridge cracks smaller than one-sixteenth of
an inch. These coatings also provide a durable waterproof surface. The aforementioned
qualities stem from the fact that these coatings are made up of a rubbery base, which permits
them to extend by 200 percent and above and then recover. Different chemistries of
elastomeric coatings are used in varying quantities in different end-user markets. Acrylic-
based elastomeric coatings, for instance, are more widely used in wall and roof coating
applications, while polyurethanes are more commonly used in flooring applications. These
coatings usually find applications in both new construction and the renovation of high-rise
commercial complexes, residential apartments and houses, sports complexes, and so on.
A lot of confusion exists in the elastomeric coatings marketplace with regard to the definition
of elastomeric coatings. A coating that possesses the crack-bridging capability, the
waterproofing ability, and a stretchability ranging from 100 to 800 percent is referred to as
an elastomeric coating. However, many of the products manufactured by the leading
companies expand by about 200 to 400 percent.
Elastomeric coatings entered the U.S. market in the late 1950s while they have been used in
Europe post world war II. The need to seal cracks and waterproof old buildings in Europe led
to the demand for a coating that would cater to these requirements. Earlier, manufacturers
tried to incorporate plasticizers into their formulation to address this issue but the migration
of plasticizers off the coating; besides loss of properties of the system a couple of years after
application inhibited the market’s growth. In the United States, Rohm and Haas Company
and Union Carbide Corporation first began working on the creation of a 100 percent
internally plasticized system.
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Elastomeric coatings are applied in thick films that are five to ten times thicker than normal
acrylic paints, thereby they help cover surface irregularities. They are weatherproof and
protect their substrate from wind-driven rain. They help rejuvenate weathered or cracked
surfaces and last much longer than traditional paints. However, for best results, the surface
on which the coating is to be applied should be well prepared and cleaned prior to the
application.
Elastomeric coatings are particularly useful in coastal areas as they already have high levels
of moisture in the air. In addition, substrates such as concrete, masonry, and wood are
porous and the absorption of moisture by these surfaces can significantly shorten their life.
The ability of elastomeric coatings to bridge cracks that are formed by thermal expansion
and their waterproofing qualities significantly contribute in extending the substrate’s life.
Elastomeric coatings have many applications. In the building construction industry, being
used to cover vertical walls, terraces, balconies, garages, parapets, roofs, sports stadiums,
decks, bowling alleys, and so on. Industrial uses include reactor lining, equipment coating
and piping and other cryogenic storage devices. Other uses include applications in swimming
pools, flexible bumpers in automobiles, coolers and freezers.
Elastomeric coatings can be classified into the following types based on chemistry:
■ Acrylics: Acrylics are single-component water-based elastomeric coatings and are the
most widely used. Siliconized acrylics also fall under this category.
■ Urethanes: These elastomeric coatings are available in one or two component products.
Urethane coatings generally find use in high traffic areas such as walkways and garages.
■ Silicones: Silicones also come in one or two component products. They are also very
specialized and are being used in specific wall coating applications.
■ Polyureas: Polyureas are two component specialized products and find use in floor
coatings. They are a relatively new class of product.
■ Neoprene: Neoprene coatings are composed of synthetic rubber polymers, which offer
excellent elongation and recovery properties and find specialized used in some roof
coatings.
■ Hypalons: Hypalons (a registered trademark of E.I. DuPont de Nemours Company) are
chlorosulfonated polyethylene rubbers and specialize in roofing applications. Often, a
neoprene-hypalon hybrid is used.
■ Butyl Rubber: Butyl rubber coatings have extremely low water vapor permeability.
Hence, these coatings find use in freezers, coolers, and other cryogenic storage equipment
and also in places subjected to ponding water.
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M a r k e t O v e r v i e w a n d S c o p e o f t h e S t u d y
The elastomeric coatings market in the United States was worth $620 million in 2004. The
market is expected to grow at a compound annual growth rate (CAGR) of 10.1 percent to
reach $1,216 million in 2011. The main driver for this market is the growth in commercial
construction. The durability, elongation, waterproofing ability, and other features of
elastomeric coatings are also contributing to the growth of this market.
Elastomeric coatings are concentrated in the southern coastal areas of California and Florida
rather than the interior and northern parts of the United States. This is due to the greater
need to waterproof in these regions because of the high moisture content in the atmosphere.
Since the building construction industry accounts for maximum usage of elastomeric
coatings, the study is restricted to this industry only. Three main end uses of elastomeric
coatings will be dealt with in detail in this study, which are as follows:
■ Wall coatings—As the name suggests, these are coatings that cover vertical walls of any
type of building
■ Floor coatings—These coatings cover all kinds of horizontal surfaces such as garages,
terraces, and decks
■ Roof coatings—These coatings cover the roofs of residential, commercial, and industrial
buildings
This study also includes the application of elastomeric coatings by Do It Yourselfers (DIYs)
though their usage of these coatings is very limited.
This research service is limited to acrylics, urethanes, silicones, and polyurea-based
elastomeric coatings because these constitute the bulk of the market. Though neoprene,
hypalons, and butyl urea coatings were greatly used in the 1980s, today, there are very few
companies involved in these types of coatings and the market for these coatings has
diminished. Coatings based on asphalt or bitumen, that are rubberized, are excluded from
this study.
Elastomeric membranes or elastomeric liquid membranes are terms commonly confused with
elastomeric coatings. Sometimes, these terms are used interchangeably while at other times
sheets that serve as coatings are called the membranes. At other times, the primer, the sub
coat, and the topcoat are collectively referred to as elastomeric membranes. In this research
service, only elastomeric membranes will be referred to, whose coatings or layers are liquid
applied and are elastomeric in nature. Primers, surface conditioners, adhesives, and sealants
that may or may not be elastomeric in nature are excluded from this study.
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Market Engineering Measurements
Chart 3.1 represents the Market Engineering measurements for the U.S. elastomeric coatings
markets in 2004.
C h a r t 3 . 1
Overall Elastomeric Coatings Market: Market Engineering Measurements (U.S.), 2004
Market Engineering Drives Market
Strategy and Planning
MarketEngineer
ChallengeIdentification
MarketResearch
MarketEngineering
System
Implementation
MarketPlanning
MarketStrategy
Note: All figures are rounded. Source: Frost & Sullivan
M a r k e t S i z e
The elastomeric coatings market in the United States in 2004 was worth $620 million This is
expected to grow at a compound annual growth rate (CAGR) of 10.1 percent to reach
$1,216.7 million by the year 2011.
Measurement Name Measurement Trend
Market age Growth ---
Revenues $620 million Increasing
Potential revenues (maximum future market size) $1,216.7 million Increasing
Base year market growth rate 10% Increasing
Forecast period market growth rate 10.1% Decreasing
Average price $19 per gallon Increasing
Price range $10 to $50 per gallon Stable
Price sensitivity High Increasing
Competitors (active market competitors in base year) Around 200 Increasing
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M a r k e t A g e
The overall elastomeric coatings market in the United States is at a growth stage with a few
national suppliers and a number of regional suppliers. The national suppliers cater to most
parts of United States while the regional participants focus only on a particular region and
manufacture coating customized to the region’s requirements. The growth potential of these
coatings are dependent on their end use and on the region of application in the United States.
Forexample, in the state of California, the government is promoting the use of reflective roof
coatings because of their high moisture levels. White elastomeric coatings, which can reflect
the sunlight and can also waterproof, are an obvious choice for consumers.
D i s t r i b u t i o n
Figure 3-1 presents the modes of distribution followed by key suppliers in the U.S.
elastomeric coatings market:
Source: Frost & Sullivan
F i g u r e 3 - 1
Elastomeric Coatings Market: Distribution Channel Followed by Key Suppliers (U.S.), 2004
Direct Sale to Sale through
Company Contractors Distributors Mix of Both
Benjamin Moore & Co. ■
Degussa Constructions Systems Americas ■
Dryvit Systems, Inc. ■
Elastomeric Roofing Systems, Inc. (ERSystems) ■
Henry Corporation ■
ICI Paints ■
M.A.B. Paints ■
National Coatings Corporation ■
Neogard, a division of Jones- Blair Company ■
Pacific Polymers International, Inc. ■
Sika Corporation ■
Sto Corporation ■
Textured Coatings of America, Inc. ■
The Sherwin- Williams Company ■
Tremco Sealants/ Waterproofing Division ■
United Coatings ■
3M ■
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Direct Sale to Contractors
This is a more common mode of distribution followed in the elastomeric floor and roof
coatings industry. This is as many projects in this industry require several gallons of coatings
and also a good job specially in this market is very dependent on the skills of the applicator
and so the manufacturers generally sell to authorized applicators. Comparatively smaller
companies follow this mode of distribution as they have good local contacts. For example,
Resin Technology Company, a division of Henry Company, manufactures elastomeric
polyurea coatings and sells it only to approved applicators or contractors.
Sales through Distributors
This is a more common mode of distribution followed by the wall coatings industry where
companies even sell its products through Home Depot and Lowe’s. Selling through
distributors gives the manufacturer the advantage of greater geographical coverage and
selling it to newer contractors. For example, The Sherwin-Williams Company sells its coating
through its 2800+ company owned stores throughout the United States while United
Coatings and Sto Corporation sells their products through independent distributors.
Sales through Distributors as well as Direct Sale to Contractors
Many companies are following this mode of distribution and there is a trend favoring this
move. This is because this mode of distribution gives manufacturers the unique advantage of
selling a few of their coatings through approved applicators as well as widening their reach
through independent distributors. Forexample, Neogard and 3M sell their elastomeric
coatings line though a mixture of both the modes of distribution.
C o m p e t i t i o n
Many companies sell elastomeric coatings in the United States. Most of the companies are
regional and sell only to a particular area while there are comparatively fewer companies
selling nationally. The regional companies compete on their ability to manufacture products
that are customized for use in a particular area while the national participants dominate
when it comes to the variety of products manufactured and the availability of technical help.
The U.S. elastomeric coatings market is very fragmented with different market leaders in
different segments. Most companies in this market focus on one or two end use markets,
while there are very few suppliers who cater to all the three end use markets.The
Sherwin-Williams Company dominates the elastomeric wall coatings market while Neogard,
a division of Jones-Blair Company is the market leader in the floor coatings market.
Innovative technology, market know-how and a good distribution network is what
differentiates these companies from the rest.
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P r o d u c t A n a l y s i s
Elastomeric coatings can be classified based on their base resin. They are as follows:
■ Acrylics
Acrylics are single component water based elastomeric coatings. They adhere excellently to
their substrates; have good flexibility, good weather resistance, and high moisture-vapor
transmission rates and are also easy to apply. Acrylics are the most widely used elastomeric
coatings and are also the least priced.
■ Urethanes
These elastomeric coatings are available in one or two component products. Urethane
coatings find specialized use in high traffic areas such as walkways and garages. They offer
excellent weather resistance and are highly resistant to chemicals and UV light. They are the
most expensive coatings in this category.
■ Silicones
Silicones also come in one or two component products. They too are very specialized and
have limited but specialty use.
■ Polyureas
Polyureas are two component products that are also very specialized. They usually find
applications in floor coatings, which are subjected to high traffic. They are difficult to apply
and hence quite expensive.
Different applications have different requirements with respect to environmental conditions,
abrasion resistance, chemical resistance amongst others. Any coating can be used regardless
of the end use but in most cases specific end use markets have a particular type of coating
dominating. For example, acrylic-based elastomeric coatings have a market share of
90 percent in the wall coatings market and polyurethane-based coatings have a market share
of 90 percent in floor coatings market. This is because their chemical composition makes
them specifically suited for a particular end use. Sometimes the elastomeric coatings based on
the same chemistry are used for different end use. For example, acrylic coatings are used for
wall coatings, roof coatings, and also floor coatings. In such circumstances, the coatings are
engineered and slightly modified to match the end use requirement it is not best suited for.
The substrate plays one of the important roles in determining whether a particular coating is
suitable for the particular end use or not. This is because of adhesion compatibility between
the substrate and the coating. For example, acrylics will adhere better to concrete/masonry
surfaces while silicones will go over exterior insulation and finish systems (EIFS) surface
better, both as a roof coating.
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Construction Market Update
The elastomeric coatings market is heavily dependent on the construction industry. Hence,
elastomeric coatings market grows when construction industry flourishes. Exterior walls,
floors and roofs come directly under the residential and nonresidential construction.
The construction industry is seeing high growth. The key factor responsible for this growth is
nonresidential construction. Nonresidential construction is expected to grow at the rate of
five to six percent throughout United States in the next few years. This is because of increase
in corporate profits which has resulted in increase in office construction and employment.
Higher employment has resulted in increased wages and higher consumer spending on leisure
activities and recreation. health care construction has also been growing steadily due to the
increasing demand to serve the elderly. Hotel construction is increasing in tourist areas. All
of this is leading and resulting from an overall improvement in the economy.
The residential construction market is seeing growth, but with a different driver. The years
2001 to 2004, almost until the third quarter, were very good for the residential construction
market. Since the interest rates were down to historic levels, there was a flurry in new
housing starts but toward the end of 2004 and early 2005 the interest and mortgage rates
started climbing and hence the new housing starts began to decline. However, with the
decline in new starts, there started a flurry of renovation and home improvements began to
increase. Total spending on home improvement, renovation, and repair is witnessing growth
and is expected to grow by 5.5 percent in the next couple of years. Construction of
condominiums and conversion of apartments into condos is expected to maintain its
momentum at least in a few places in the United States. This multi-family housing segment
witnessed a boom during 2003 as young professionals were buying new properties. The low
interest rates permitted them to buy a property rather than rent one, hence there was a flurry
in this market. However, with the increase in interest rates, though the condominium
construction is expected to dip, states in the South East, for instance, Florida, Georgia, North
Carolina and South Carolina are still experiencing growth. This may probably be due to the
fact that an independent house is more expensive than a condominium.
The elastomeric wall coatings market is expected to get a surge with the greater usage of tilt-
up and precast concrete in construction. According to the Tilt-Up Concrete Association, the
use of tilt-up concrete in the year 2004 has risen by 23 percent as compared to the previous
year. Since concrete structures are prone to cracking, the increase in use of concrete for
building construction promotes the usage of elastomeric wall coatings. Also, the increase in
the construction of condominiums is responsible for elastomeric wall coatings’ growth. The
construction of conominiums provides the opportunity to construct greater high-rise
buildings. Thus, higher the number of high-rise buildings, the greater is the surface area of
the exterior walls and hence this provides an opportunity for greater use of elastomeric
exterior wall coatings in a single project. Also, the growth in the number of new office
buildings, recreation centers, and industrial workshops and buildings are all and will be
responsible for the elastomeric wall, floor, and roof coatings market to increase. Home
improvements, such as renovation of the parking garage, building walls, terrace, roof, and so
on are facilitating the elastomeric floor and roof coatings market to grow.
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F o r e c a s t s a n d T r e n d s
Market Drivers
Figure 3-2 shows the drivers of the U.S. elastomeric coatings market ranked in the order of
impact for the period 2005-2011.
Source: Frost & Sullivan
G r o w t h i n C o n s t r u c t i o n F u e l s E l a s t o m e r i c C o a t i n g s ’
D e m a n d
The growth in construction is the biggest driver for growth of the elastomeric coatings
market. The nonresidential building construction industry that includes construction of
office buildings, healthcare buildings, educational complexes, and so on is expected to grow
by five to six percent and also the home repair and renovation industry is expected to grow
by 5.5 to 6.5 percent in the coming years.
2004 was the juncture at which growth in residential construction began to fall and growth
in nonresidential construction began to pick up. New housing starts after a decade long of
growth began to slow down. This decline in growth of new housing starts was due to the
rising interest rates. However, the home repair and renovation industry has picked up and is
expected to grow by 5.8 percent in the next couple of years.
The nonresidential new building construction segment has already gained momentum andhas grown by 4.7 percent in 2004. This segment is further expected to grow by 1 to 2 percentin the next few year due to several reasons. Higher corporate profits have increased spendingon office buildings and recruitment. Higher recruitment has led to higher wages and henceincreased spending power on leisure activities. This is resulting in newer recreation and retailcenters being opened. Hotel construction in tourist areas is also seeing growth. All this is dueto and is resulting in the overall growth in economy.
Hence, the elastomeric coatings industry is being fueled by the high growth in construction.This driver is expected to have a high impact in the near and mid-term future.
F i g u r e 3 - 2
Elastomeric Coatings Market: Market Drivers Ranked in Order of Impact (U.S.), 2005-2011
Rank Driver 1-2 Years 3-4 Years 5-7 Years
1 Growth in construction fuels elastomeric coatings’ market demand High High Medium
2 Need for high-performance coatings boosts market demand High Medium Medium
3 Elastomeric coatings experience growth at the expense of other
coatings
Medium Medium Low
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N e e d f o r H i g h - p e r f o r m a n c e C o a t i n g s B o o s t s D e m a n d
F o r E l a s t o m e r i c s
Many people in different regions of the United States are experiencing a need for
high-performance coatings. This is especially true of coastal areas that experiences strong
winds and carry moisture with them. These areas require a coating that will protect their
walls, roofs, and floors and will prevent moisture from penetrating into them. Elastomeric
coatings are hence favored. Their ability to stretch by about 300 percent and their
waterproofing characteristics are unmatched. These coatings are durable and long lasting and
can withstand heavy rainfall and snowfall. They are also dirt, mildew, and chemical resistant.
All these factors, along with end users realizing that applying an elastomeric coating is much
more cost-effective than carrying out renovation or replacement work, make these coatings
increasingly sought after. This factor is expected to drive the market throughout the forecast
period.
E l a s t o m e r i c C o a t i n g s E x p e r i e n c e G r o w t h a t t h e E x p e n s e
o f O t h e r C o a t i n g s
Elastomeric coatings are generally over five times thicker than conventional latex/acrylic
paints when dry. This gives these coatings the ability to hide surface imperfections and bridge
hairline cracks while traditional paints and coatings are not as effective in concealing surface
imperfections. Another factor is that new buildings are warranted for one year in the United
States. Hence, the building contractors tends to use traditional paints. Once these paints peel,
many building owners are swayed toward elastomeric coatings as they provide superior
protection. Also the fact that elastomeric coatings are warranted for a longer period, for
instance, many elastomeric roof coatings manufacturers give ten years warranties, and light
or white coatings help conserve energy in summer, consumers are convinced that they are
best choice.
This driver is expected to have medium impact throughout the coming years, since many end
users see only the initial costs.
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Market Restraints
Figure 3-3 shows the market restraints of the U.S. elastomeric coatings market ranked in
their order of impact for the forecast period 2005-2011.
Source: Frost & Sullivan
H i g h e r C o s t o f E l a s t o m e r i c C o a t i n g s R e s t r a i n G r o w t h
Elastomeric coatings cost about 350 percent more than that of conventional latex/acrylic
paints. On an average, a gallon of acrylic elastomeric coating for wall coating applications
costs $21, while an ordinary acrylic paint costs about $6/gallon. The coverage area per
gallon of elastomeric coatings are much lower than ordinary coatings. Generally, on a porous
surface, elastomeric coatings cover 50 to 60sqft/gallon while conventional paints and
coatings spread at the rate of 200 to 250sqft/gallon.
However, elastomeric coatings have many benefits like being able to effectively waterproof
and bridge cracks smaller than 1/16th of an inch. These coatings also have good chemical,
abrasion, and UV resistance and are long lasting. Despite all these benefits, contractors are
deterred by the pricing, thus, making it the single most important restraint, which has and
will continue to impact the market in a major way.
C o m p e t i t i o n f r o m O t h e r C o a t i n g s A f f e c t E l a s t o m e r i c
C o a t i n g s M a r k e t
Though elastomeric coatings are a unique product with excellent features, conventional
coatings gain an upper hand in a few circumstances. States like Idaho in the United States
have low moisture in the air and also experience lower temperature variations. In these areas
ordinary paints and coatings offer stiff competition to their elastomeric counterpart. This is
because these traditional paints are cheaper and the elastomeric coating’s functionality is not
entirely utilized in such areas. Hence, homeowners and building contractors are often swayed
to go in for the traditional paints.
F i g u r e 3 - 3
Elastomeric Coatings Market: Market Restraints Ranked in Order of Impact (U.S.),
2005-2011
Rank Restraint 1-2 Years 3-4 Years 5-7 Years
1 Higher cost of elastomeric coatings restrain growth High High High
2 Competition from other coatings affects elastomeric coatings market Medium Medium Low
3 General complexity in application constrains growth Medium Low Low
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G e n e r a l C o m p l e x i t y i n A p p l i c a t i o n C o n s t r a i n s G r o w t h
Many of the elastomeric coatings such as polyurethanes, polyureas, and silicones often come
in two component coatings that require effective mixing of the two components before their
application. This necessitates expensive and cumbersome equipment for their effective
mixing and complicates their application. However, coatings which are polyurethane and
polyurea-based offer exceptional durability and a shorter cure time. Hence, this factor is a
medium restraint to this market.
Since the elastomeric coatings market is getting more competitive, many companies are
increasing their R&D expenditure to come up with better technology so as to reduce the
impact of this restraint.
Revenue Forecasts
Figure 3-4 and Chart 3.2 show the revenue forecasts for the total elastomeric coatings market
in the United States for the period 2001 to 2011.
Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
F i g u r e 3 - 4
Elastomeric Coatings Market: Revenue Forecasts (U.S.), 2001-2011
Revenue
Revenues Growth Rate
Year ($ Million) (%)
2001 483.0 ---
2002 519.4 7.5
2003 563.8 8.5
2004 620.0 10.0
2005 685.8 10.6
2006 758.6 10.6
2007 837.0 10.3
2008 918.2 9.7
2009 1,009.3 9.9
2010 1,108.0 9.8
2011 1,216.7 9.8
Compound Annual Growth Rate (2004-2011): 10.1%
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C h a r t 3 . 2
Overall Elastomeric Coatings Market: Revenue Forecasts (U.S.), 2001-2011
Note: All figures are rounded. Source: Frost & Sullivan
In 2004, the revenues from the total elastomeric coatings market were $620 million. The
market is forecast to grow to $1,216.7 million by 2011 at a CAGR of 10.1 percent. The
growth in the total market is likely to be driven by the high growth in non- residential
construction. Also, the coating’s unique features favor its growth.
The factors that are likely to support the revenue growth of the total elastomeric coatings
market over the forecast period include:
■ Strict environmental regulations
■ Demand for greater performance and durability
■ New technology development
Market and Product Trends
M a r k e t T r e n d s
Revenue Share Trends by Application Market
Figure 3-5 and Chart 3.3 present the percent of revenues by application markets in the total
U.S. elastomeric coatings market for the period 2001-2011.
0
200
400
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800
1,000
1,200
1,400
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Rev
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Revenues ($ Million) Growth Rate (%)
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Key: EWC = Elastomeric Wall CoatingsEFC = Elastomeric Floor CoatingsERC = Elastomeric Roof Coatings
Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
C h a r t 3 . 3
Percent of Revenues by product type (U.S.), 2001-2011
Note: All figures are rounded. Source: Frost & Sullivan
F i g u r e 3 - 5
Elastomeric Coatings Market: Percent of Revenues by Product Type (U.S.), 2001-2011
EWC EFC ERC
Year (%) (%) (%)
2001 52.2 22.2 25.7
2002 51.2 21.4 27.4
2003 50.0 20.5 29.6
2004 48.4 19.4 32.3
2005 46.7 18.3 35.0
2006 45.1 17.3 37.6
2007 43.8 16.4 39.8
2008 42.9 15.8 41.3
2009 42.2 15.1 42.7
2010 41.6 14.6 43.9
2011 41.1 14.1 44.8
0%
10%
20%
30%
40%
50%
60%
70%
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90%
100%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Perc
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EWC EFC ERC
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In 2004, the elastomeric wall coatings dominated the elastomeric coatings marketplace by
contributing 48.4 percent to the total market. The elastomeric floor and roof coatings market
contributed 19.4 percent and 32.3 percent respectively. This segmentation is expected to
change with the elastomeric roof coatings slowly moving to the top spot. This is because end
users are paying more attention to their roofs than the floors and the walls. They are
realizing the importance of a leakproof and a damage free roof. Consumers are
understanding that a surface which has to withstand nature’s fury, deserves a better and a
high performance coating. Hence, they generally do not want to compromise on the roof.
Also, government encouragement to use white reflective coatings is greatly favoring the
elastomeric roof coatings than anything else. Hence, it is expected that the elastomeric roof
coatings are eventually going to lead the elastomeric coatings market.
VOC Regulations Play a Role in Widening the Gap Between Small and Large Manufacturers
The U.S. environmental protection agency (EPA) and the different regional boards/
organizations responsible for prevention of environmental pollution, continuously introduce
more stringent VOC regulations with time. So coating suppliers have to manufacture
coatings that adhere to the VOC regulations as prevalent in the region in which they plan to
sell. The larger companies have excellent R&D capabilities and are able to supply different
products to suit different needs and markets much more easily than the small manufacturers.
Also these large companies have a good distribution network, thereby, making it easier to
reach out different markets. Hence, they are able to market their products aggressively when
a new regulation has come in place because most of the times they are already prepared.
While many times the smaller companies find this task of modifying their formulation
slightly difficult because they lack the resources and the expertise. This widens the gap.
Larger companies are easily able to expand into newer regions, while the smaller companies
find it difficult to align their products in order to suit the new region’s requirements. This
factor serves as a competitive advantage for the large organizations while being a roadblock
for their smaller counterparts.
P r o d u c t T r e n d s
Creating Coatings with Improved Properties
Coating manufacturers are continuously working toward creating products with improved
UV resistance, enhanced durability, better chemical resistance, and so on. This is because of
the heated competition prevalent in the entire market. Hence manufacturers are forced to
find newer and better ways to improve their products with an aim to differentiate their
products from their competitors.
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Trend toward Zero VOC Coatings
While the federal government is constantly lowering the VOC limits in coatings, state
governments are one step ahead, for instance, in California and the Eastern Block states, the
governments are heading in the direction of enforcing a zero VOC finally. Hence,
manufacturers are constantly working on their technology to move completely from solvent-
based coatings to waterborne elastomeric coatings that have low VOCs.
Growth in Use of Acrylic-based Elastomeric Coatings
Since the coatings market is moving toward zero VOC and cost being a major factor in this
market, many companies are concentrating on their acrylic waterborne line of elastomeric
coatings. Also, a lot of new companies are emerging in this line of business. Acrylic coatings
are the most versatile of all coatings. They can be used in all the end use markets.
Manufactures only need to modify their formulation slightly in order to accommodate the
requirements of different end use markets. These coatings offer the advantage of being
waterborne, having low VOC content and being cheaper than the other elastomeric coatings.
All this is favoring the growth in acrylic-based elastomerics.
Incorporation of Ceramic Microspheres in Acrylic Elastomeric Coatings
The introduction of white acrylic coatings impregnated with ceramic microspheres is a new
trend which has emerged in this market. These coatings are used over roofs and also on
exterior walls. The ceramic microspheres help in insulating the roof against heat and sound
besides assisting in waterproofing. These ceramic particles reflect, refract, and dissipate a
great amount of heat flow to the interior of the structure, thereby helping the roof or wall
stay cooler, which ultimately helps the building/ home owner reduce his cooling bills. A few
innovative companies which are differentiating themselves from the rest by this technology
are Nationwide Chemical Coating Manufacturers, Inc. Acry-Tech Coatings, Inc. and
Advanced Coatings Systems, Inc.
Pricing Trends
P r i c e D e t e r m i n a n t s
The prices of elastomeric coatings depend on the following factors:
Chemistry of the Coating
The price of elastomeric coatings are heavily dependant on the base resins used. Some base
resins such as acrylics are cheaper while others such as polyurethanes and polyureas are
expensive. This variation comes about from the method of synthesis of the base resins as the
primary source is the same for all which is crude oil.
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Region in which it is Sold
The elastomeric coatings market is very fragmented with numerous manufacturers in every
region or state. Also, the government regulations vary from region to region. So if a regional
manufacturer wants to sell his product in another state, he has to customize his product to
meet the regulations of the other region besides finding a suitable source to distribute. One
must note that in the new region there might be another local manufacturer manufacturing a
similar product at a lower price. The larger manufacturers have a better control over their
prices as they have many manufacturing centers, dedicated R&D labs, and an exhaustive
distribution network. Demand also drives manufacturers to produce coatings at a lower
price. All these factors play an important role in determining the cost of the product.
Size of the Project
Contractors for larger projects can avail elastomeric coatings at a much lower price than that
for smaller products. Manufacturers are always looking for wholesale customers and so give
a discount. Discounts up to 20 percent are offered on huge projects.
Performance Requirements
Elastomeric coatings are priced depending on the performance requirements of the end use
and thus, price differs even in the same application market. They have different warranties as
well. Coatings have to be engineered to meet these requirements, which comes at a cost.
P r i c i n g
Prices vary by base resin and also by the end user segment. The average price of a gallon of
elastomeric coating in the United States costs $19. Acrylic elastomeric coatings cost
anywhere between $10 a gallon to $30 a gallon depending on the end user segment. The
silicone variety comes next with the prices ranging from $25 to $30 per gallon. Both
urethanes and polyureas are very expensive elastomeric coatings which could cost anywhere
between $20 per gallon to $50 per gallon.
P r i c i n g T r e n d s
The prices of elastomeric coatings, in general, have been increasing in the past three to four
years. Most of the companies have increased their prices for the elastomeric coatings line by
5 to 15 percent as compared to the previous year. This is because of the ever increasing prices
of raw materials and fuel supply, which are all derived from crude oil. The instability in
supply is adversely affecting the manufacturing costs, due to which manufacturers’ profits
are being squeezed Hence, these coatings manufacturers are not left with much choice than to
pass on their increased costs to their customers.
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C o m p e t i t i v e A n a l y s i s
Competitive Structure
Figure 3-6 presents the competitive structure of the total U.S. elastomeric coatings market for
2004.
Source: Frost & Sullivan
Around 200 companies participate in the elastomeric coatings market in the United States.
Most suppliers have products based on two or more base resins, which is dependent on the
end use market. Also, many of these suppliers serve only one or two of the three main
application areas in this market. For instance, Pacific Polymers Company manufactures
elastomeric coatings based on acrylics and urethanes and serve only the floor coating market.
Figure 3-7 shows the major participants by end-user markets in the U.S. elastomeric coatings
market in 2004.
F i g u r e 3 - 6
Elastomeric Coatings Market: Competitive Structure (U.S.), 2004
Number of Companies in the Market 200
Types of Competitors Large national suppliers
Small regional suppliers
Distribution Structure Sale through contractors
Sale through distributors
A mixture of both
Key End User Groups Exterior walls, floors, and roofs
Competitive Factors Price, quality of the product, reputation of the company, warranty,
environmental compliance, ease of application
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Source: Frost & Sullivan
The companies participating in this market can be classified in the following two ways
depending on:
T h e S i z e a n d O p e r a t i o n o f t h e C o m p a n y
Elastomeric coating manufacturers are either large national participants or are small and
regional participants who cater only to a particular area. The larger participants are
characterized by their good product line, liberal R&D expenditure, and an extensive
distribution network while the smaller and regional participants do business based on their
knowledge of the local area, thereby, having products that are customized to the regions’
needs. These companies also have good contacts with the contractors in their region who
enable their business to grow.
F i g u r e 3 - 7
Elastomeric Coatings Market: Database of Key Industry Participants by End-User Market
Participation (U.S.), 2004
Company Exterior Walls Floors Roofs
Benjamin Moore & Co. ■
Degussa ■ ■
Dryvit Systems, Inc. ■
Elastomeric Roofing Systems, Inc. (ERSystems) ■
Henry Corporation ■
ICI Paints ■ ■
M.A.B. Paints ■ ■
National Coatings Corporation ■ ■
Neogard, a division of Jones- Blair Company ■ ■ ■
Pacific Polymers International Inc. ■
Sika Corporation ■
Sto Corporation ■
Textured Coatings of America, Inc. ■ ■
The Sherwin- Williams Company ■ ■ ■
Tremco Sealants/ Waterproofing Division ■
United Coatings ■ ■ ■
3M ■
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T h e Ty p e o f C o m p a n y
The classifications based on the type of companies participating in this market are chemical
companies, paint companies, construction companies, and specialized companies. Large
chemical companies such as Degussa and Dow Corning, who have varied and multiple
products catering to many different markets, participate in this market. Paint Companies
such as Sherwin-Williams and Benjamin Moore also have a major presence in this market but
is mostly restricted to the exterior wall coatings applications. These companies manufacture
several types of paints and coatings besides elastomeric varieties. Many companies such as
Sto Corporation and ERSystems have a major presence in this market. These companies also
sell elastomeric coatings as a part of the final product. A lot of small construction companies,
who already do panelling, cladding, and so on, find it easy to incorporate elastomeric
coatings in their product line. Lastly, there are a few specialized companies that manufacture
a few coatings and adhesives for only a specialized end use. A very limited elastomeric
coatings line characterizes them. They are very regional and they cater to niche and highly
specialized markets.
Many companies private label i.e. they buy their elastomeric coatings from other
manufacturers and sell it under their brand name as elastomeric coatings can easily form a
part of their existing product portfolio.
D i s t r i b u t i o n S t r u c t u r e
Elastomeric coatings are distributed in mainly three ways. They are either sold through
distributors, who may be independent or may be company owned, or directly to contractors
or a mix of both. Large companies have several products and so may have distribution
centers in various parts of the country where contractors can go and purchase their products.
These companies have the advantage of getting closer to the contractor’s region of operation
besides providing technical guidance. For instance, The Sherwin Williams Company has over
2600 company owned stores all over the United States. The mid-sized companies either sell
directly to contractors or have a mix of both as their distribution channel. Advanced
Coatings Systems, Inc. sells its products through both independent distributors as well as
direct to the contractors. Only large contractors who buy several thousands of gallons are
generally attended to directly. Small companies are mostly regional and hence supply directly
to contractors.
The advantages of having an extensive network of distributors is that companies are able to
reach out to all parts of the country while on the other hand the products that are sold via
distributors are slightly more expensive. Smaller companies are always keen to cut out on all
overheads; hence they prefer to approach the contractors directly through a dedicated team
of sales representatives.
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Following are the value chain members in a typical elastomeric coatings buying process:
■ Manufacturers of coatings that are the suppliers
■ Distributors that stock and sell these coatings to the contractors
■ Contractors or applicators that buy these coatings from distributors. Sometimes, they
obtain it directly from the manufacturer.
■ Architects and engineers that play a vital role in selecting the coatings.
■ Commercial or residential complex owners that also play a role in the coating’s selection.
C o m p e t i t i v e F a c t o r s
Price: Price is the most competitive factor based on which a coating manufacturer is finally
selected. The elastomeric coatings market is a very fragmented and a competitive market. It is
given utmost importance during the bidding process.
Quality of the Product: The durability, the solids content, water penetration resistance,
weather resistance, and so on play a crucial role in the products selection. The same products
having been used elsewhere in the same locality serves as a testimony to the products quality
and these factors influence final selection.
Reputation of the Company: The name of the company significantly influences sales in this
market. Companies such as 3M, The Sherwin-Williams Company, and Degussa have the
reputation for supplying quality products and have a good brand image. Big contractors
prefer products manufactured by these companies with whom they have associated for
several years This is because they are sure about the timely delivery of the product besides
other technical support. Hence, reputed companies have an edge over their competitors.
Warranty: Long warranties are typical of elastomeric coatings’ suppliers. This industry
standard is five years but there are some roofing companies, which give warranties for as
long as 20 years. Consumers and architects/engineers prefer using products that have long
warranties.
Environmental Compliance: As environmental regulations are becoming increasingly strict, a
key success factor for coating manufacturers is to develop products that comply with the
regulations where the product is to be sold. Manufacturers who anticipate regulations and
develop elastomeric coatings have a competitive edge while bidding for large projects.
Ease of Application: The ease of application has an influence on the final selection of the
elastomeric coating. Acrylic products are easy to apply than the polyurea-based elastomeric
coatings that are two-component products. This is because a two-component product will
require expensive equipment to mix the two components in the correct ratio.
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Market Participants
The following are a few company profiles who participate in this market
D e g u s s a C o n s t r u c t i o n S y s t e m s A m e r i c a s
Degussa is one of the leading participants in the elastomeric coatings market, besides being
one of the largest chemical companies in the world. They participate primarily in the floor
coatings market with their urethane and polyurea-based coatings. They are also a major
participants in the wall coatings market with their acrylic, silicone and siliconized acrylic
products. Degussa takes pride in being technical innovators and have several products which
are patent protected. Degussa also has an extensive distribution network.
T h e S h e r w i n - W i l l i a m s C o m p a n y
Sherwin-Williams is one of the largest paint companies and is also a leader in the elastomeric
coatings market. It makes acrylic and a few polyurea-based elastomeric coatings for exterior
wall coating applications. The company also has a minor presence in the floor and roof
coatings market. Sherwin-Williams’ R&D focus and its impressive nationwide distribution
network is responsible for making it such a major participant in this market.
D o w C o r n i n g C o r p o r a t i o n
Dow Corning is a joint venture between Corning, Inc. and The Dow Chemical Company
pioneering in silicon-based technology and products. The company sells the largest amount
of silicone-based elastomeric coatings for wall coating application. The company serves
several industries including automobile, construction, health care, and so on.
3 M
3M is a major participant in the elastomeric coatings market participating primarily in the
floor coatings market. 3M sells its Scotch-Clad range of products both direct to contractors
and through its extensive distribution network. The company makes high quality products
and has a very good line of solvent-free, waterborne elastomeric coatings.
I C I P a i n t s
ICI is a major participant in the wall coating market and one of the leading paint companies
in the world. The company also makes roof coatings. The company’s brand name coupled
with their research focus and extensive distribution network helps them market their
products successfully.
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N e o g a r d , a d i v i s i o n o f J o n e s - B l a i r C o m p a n y
Neogard is one of the leading suppliers of elastomeric coatings. The company’s primary focus
is urethanes for floor coating applications. The company also has a major presence in roof
coatings with its acrylic, polyurethane, and silicone coatings. Many products are certified by
international organizations such as Underwriters Laboratories and Factory Mutual. The
company differentiates itself by its job and performance history.
E l a s t o m e r i c R o o f i n g S y s t e m s , I n c . ( E R S y s t e m s )
ERSystems takes pride in being a leader in cool roofing technology. The company
manufactures a complete line of high quality reflective coatings, membranes, sealants, and
adhesives specifically designed for single ply membrane, spray polyurethane foam (SPF),
asphalt, and metal roofing. The company has acrylic, silicone, and polyurethane-based
coatings in its elastomeric line. ERSystems is a charter member of the energy star roof
products program and was instrumental in developing the cool roof coating council.
N a t i o n a l C o a t i n g s C o r p o r a t i o n
National Coatings is an innovative participants of elastomeric coatings market in the
Californian region. The company participates both in the roof coatings and wall coatings
market with its waterborne acrylic product. The company has a strong R&D focus and has
been in this line of business for about 25 years. These two factors make National Coatings a
leader in this market.
T a m m s I n d u s t r i e s , I n c o r p o r a t e d
Tamms Industries offer a broad scope of concrete repair, waterproofing, and protectionproducts to the concrete industry. It is a leading manufacturer of curing, coating, grouting,traffic deck systems, waterproofing products etc., and can serve as a single source supplier ofconcrete restoration and protective products for any type of construction project. Thecompany offers acrylic-based elastomeric decorative and protective coatings under the brandTammolastic for exterior wall surfaces.
N a t i o n w i d e C h e m i c a l C o a t i n g s M a n u f a c t u r e r s , I n c o r p o r a t e d
Nationwide Chemical Coatings is a small but innovative company operating in Florida. Theymake paints, coatings, adhesives, primers, and so on. Within their elastomeric range, theyhave acrylic-based and acrylic with urethane-based coatings for both exterior wall and roofapplications. The company has ceramics incorporated in most of their coatings, which lendshigher insulation (both heat and sound). Most of these coating also have fire retardingproperties and come in variety of finishes. Nationwide Chemical Coatings is approved by theEnergy Star, Cool Roof Rating Council.
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H e n r y C o m p a n y
Henry is one of the largest roofing companies in the United States. They primarily make
acrylic coatings.They also manufacture silicones, polyurethane and polyureas-based coatings.
The company’s continued focus on R&D combined with its strong distribution network
makes it a leading participant in the elastomeric coatings market.
Market Share Analysis
The elastomeric coatings market is very fragmented with most of the companies having a
major presence only in one or a maximum of two end-user segments considered in the study,
which made the market share analysis for the total market far more complicated than the
same at the segment level. Also, a lot of companies are regional and do not operate at the
national level, though they have a sizeable market share. Hence, market share analysis for the
leading manufacturers for the total U.S. elastomeric coatings market is not undertaken in this
study as it will be misleading and will dilute the impact of the market leaders at the segment
level.
However, in 2004, some of the leading manufacturers of elastomeric coatings in the United
States were Neogard, Degussa, Henry Company, The Sherwin- Williams Company, 3M,
United Coatings, National Coatings Corporation, Sto Corporation, and ERSystems. All these
companies do business worth more than $8 million in the elastomeric coatings segment
alone. Amongst these, only Neogard and The Sherwin-Williams Company have at least an
elastomeric coating for the three end-user segments considered in this study. Companies such
as Degussa and United Coatings participate in more than one segment while companies such
as Henry Company, National Coatings Corporation, Sto Corporation, 3M and ERSystems
are leaders in their respective segments.
The key manufacturers in the wall coatings segment are Sherwin Williams, Degussa, and Sto
Corporation. The major participants in the floor coatings market are Neogard, 3M, and
Degussa and the same for elastomeric roof coatings market are Henry Company, United
Coatings, and National Coatings Corporation.
The elastomeric coatings market has many companies which operate only in specific regions
of United States. These companies manufacture products which are customized to the local
area. There are many small companies which operate in niche applications with just a few
products. This gives an opportunity for mergers and acquisitions to take place so that the
companies can pool in their resources, manufacture better products, and extend beyond their
traditional boundaries. Since a lot of construction companies also participate in this market,
there exists ample opportunity for a coatings manufacturer to merge with a construction
company so that the company together can manufacture complete systems for any particular
application.
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M a r k e t E n g i n e e r i n g S t r a t e g i e s
Introduction
W h a t i s a M a r k e t E n g i n e e r i n g S t r a t e g y ?
The key advantages of Market Engineering strategy development over theoretical, university,
or expert-developed strategies are that:
■ It is based on measurements, therefore, can be easily communicated within the company.
■ It provides a measurement system in which the effectiveness of the chosen strategy can be
evaluated.
■ The strategy drives action that provides return on investment from the market research
process.
S t r a t e g i c R e c o m m e n d a t i o n s
Researchers at Frost & Sullivan have developed strategic recommendations based on their
analysis of this market. The strategic recommendations are designed to address the challenges
that exist throughout the U.S. elastomeric coatings industry.
Strategic Recommendations
The following strategic recommendations are made to address each of the industry
challenges:
M e e t i n g E n v i r o n m e n t a l R e g u l a t i o n s
Since the government is moving towards a zero VOC policy, coating manufacturers should
invest and work toward creating elastomeric coatings that are waterborne and contain the
minimum VOCs. Companies should invest in their R&D so that they not only anticipate and
create coatings in advance of the new regulations, but also to come up with newer and better
products that will give them an edge in this highly competitive market.
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I n c r e a s e d R a w M a t e r i a l a n d F u e l P r i c e s
The only way to counter this challenge is to use one’s bargaining power, eliminate overhead
costs, operate at maximum efficiency and find the best possible way to distribute the
products and thereby increase sales. Mergers and acquisitions could be considered to pool in
resources, reduce overheads, and to capture newer markets. Backward integration of coating
companies with resin manufacturers could also help. This would eliminate one step in the
product chain and hence would result in higher profits.
C r e a t i n g B r i g h t e r a n d D a r k e r C o a t i n g s
Elastomeric coating manufacturers should invest in R&D so as to synthesize UV stable
pigments, which do not degrade under continuous exposure to sunlight. Since other ordinary
coatings are available in several shades and colors, creating elastomeric coatings in many
colors need to be addressed.
F r o s t & S u l l i v a n A w a r d s
Market Leadership Award
The Frost & Sullivan Market Leadership Award is presented to the company that has
exhibited market share leadership through the implementation of market strategy. The
recipient has displayed excellence in all areas of the market leadership process, including the
identification of market challenges, drivers and restraints, as well as strategy development
and methods of addressing these market dynamics. Furthermore, the Award recipient has
continually demonstrated solutions for monitoring market changes and for implementing
superior market strategies. By utilizing these strategies for success, the company has
established itself as the market share leader in its respective industry.
R e s e a r c h M e t h o d o l o g y
To choose the recipient of this Award, the analysts track competitor revenue and market
share within the industry. This is achieved through interviews with all market participants
and extensive secondary research of proprietary data sources. Finally, the competitors are
compared and ranked for relative position. Frost & Sullivan then presents the Award to the
company that received the number one industry rank.
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M e a s u r e m e n t C r i t e r i a
In addition to the methodology described above, there are specific criteria used to ascertain
final competitor ranking in this industry. The recipient has excelled by substantially
increasing one or more of the following criteria:
■ Market share
■ Revenue growth rates
■ Profitability
■ Market and technology innovation
A w a r d R e c i p i e n t : T h e S h e r w i n - W i l l i a m s C o m p a n y
The Frost & Sullivan Award for Market Leadership is presented to The Sherwin-Williams
Company. The company is the largest supplier of elastomeric wall coatings in the United
States. The company’s ability to better meet customer requirements and its ability to better
extend support to the contractors by educating them on new products and technologies are
factors that clearly differentiate The Sherwin-Williams Company from the other companies
participating in this market. Chart 3.4 clearly shows the strengths of The Sherwin-Williams
Company as a market leader.
C h a r t 3 . 4
Elastomeric Coatings Market: Strengths of Sherwin-Williams as a Market Leader (U.S.),
2004
Note: The Sherwin-Williams Company is the recipient of 2005 Frost & Sullivan Market Leadership Award.
Source: Frost & Sullivan
Strategic Acquisition
The Sherwin- WilliamsCompany
Strong Distribution
Network
More than 2,800 company
owned stores
More than 1,200 Sales
Representatives
Ability to Better Support
Contractors
Strong R&D Focus
Ability to Address of Market Drivers, Restraints and
Industry Challenges
Product Innovation
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The Sherwin Williams Company was founded in the year 1866 and since then it is known for
the high quality paints and coatings it supplies.
The company manufactures a wide variety of coatings including aerospace coatings and
automotive finishings. Within the elastomeric coatings product line, the company offers
acrylic coatings under the brand names of SherLastic, ConFlex XL and EnviroLastic. Sherwin
Williams has a network of over 2,800 company-owned stores and over 1,200 sales
representatives, which help the company to successfully distribute its products throughout
the United States.
S t r o n g R e s e a r c h a n d D e v e l o p m e n t F o c u s
The Sherwin-Williams Company is committed to supplying high-quality products and
investing heavily in research and development (R&D). The company has identified that high
R&D investment is the best solution to flourish in this highly competitive market. This
would enable the company to manufacturer newer and better products that are in accordance
to the Volatile Organic Compound (VOC) regulations prevalent in the intended region of
sale, thereby better meeting customer expectations.
Loxon XP is one such result of the company’s R&D. This coating can be directly applied
over new concrete that is less than 28 days old. This coating can withstand the high
alkalinity of new concrete and thus eliminates the need for a primer. Hence, this product
helps the contractor improve his productivity by cutting down one step in the coating
application process.
C l o s e C o n t a c t w i t h K e y U s e r s
The Sherwin-Williams Company maintains close working relations with contractors. It takes
initiatives to educate contractors and specifiers and on new technologies and application
methods. This end-user link provides a twofold benefit to the company. Firstly, contractors
tend to favor The Sherwin Williams Company’s products for their projects and secondly, it
enables the company to better understand the requirements and concerns of their end users,
thus enabling them to tailor their products accordingly. Therefore there is a mutual benefit
that arises from this relationship.
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E x p a n s i o n P l a n s
The Sherwin-Williams Company has plans to introduce complete concrete restoration
systems, which will help it to serve the building construction industry better. The company
believes that by supplying concrete systems in addition to their coatings, it could better serve
the renovation market where many times customers prefer using elastomeric coatings on
completion of the wall restoration. This would also help customers to buy all their products
from a single company as against buying different products from different manufacturers.
The company would also consider an entry in the roof coatings market, as this market is
experiencing high growth.
S t r a t e g i c A c q u i s i t i o n
The Sherwin-Williams Company acquired Duron Inc. in September 2004. This strategic
acquisition enables The Sherwin-Williams Company to serve coating contractors and the
Do-It-Yourselfers better, especially in the eastern parts of the United States where Duron Inc.
had a strong presence. Duron Inc. manufactures acrylic elastomeric wall coatings under the
brand name Maxflex. This acquisition gives the company an additional manufacturing
capability and helps it reach its customers through an additional 230 stores.
In conclusion, Sherwin Williams continues to build on its core capabilities, which include
strong technical capabilities and excellent customer focus. The company is constantly
analyzing the elastomeric coatings market and is evaluating newer business models to
improve profitability. The company’s brand name, along with the support of contractors,
makes it the coating manufacturer of choice. Hence, The Sherwin-Williams Company is the
deserving recipient of the Frost & Sullivan Market Leadership Award in the year 2005 for the
U.S. Elastomeric Coatings Market.
Growth Strategy Leadership Award
The Frost & Sullivan Award for Growth Strategy Leadership is given each year to the
company that has demonstrated an exceptional growth strategy within their industry.
R e s e a r c h M e t h o d o l o g y :
A recipient is chosen to receive the Frost & Sullivan Award for Growth Strategy Leadership
based on specific criteria. Through primary and secondary research methods, all companies’
market revenues are tracked and those exhibiting significant growth are noted for their
strategy implementation. Revenues are then compared year to year to monitor growth
patterns. When a company continues to show high growth rates, it is a candidate for the
Frost & Sullivan Award Growth Strategy Leadership.
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M e a s u r e m e n t C r i t e r i a :
This Award is given to the company that has bolstered their position in the market during the
base year and whose strategy will have a lasting impact on the market. The Award criteria is
based on the following:
■ Ability to grow in a saturated or maturing market
■ Implementing a unique sales strategy
■ Technological innovation and leadership
■ Discovering new venues for an established product
■ Effective Internet strategy
■ Strategic mergers, acquisitions, or joint ventures to penetrate new markets
■ Reorganization structured around growth strategy
A w a r d R e c i p i e n t : N e o g a r d
The 2005 Frost & Sullivan Growth Strategy Leadership Award is conferred upon Neogard, a
division of Jones-Blair Company. Neogard has displayed exceptional competence by adopting
growth strategies, which has led the company to grow by 30 percent in 2004. Also, Neogard
has consistently churned higher profits in the last few years that are much above the industry
average. This has led the company to become one of the leading suppliers of elastomeric
coatings, especially in the area of elastomeric floor coatings
Neogard participates in the elastomeric roof and wall coatings market, besides the
elastomeric floor coatings market. The company possesses 75 years of experience in the
coatings segment and has earned reputation as a supplier of high quality coatings. Neogard
manufactures an extensive product line under the brand names Auto-Gard, Peda-Gard, Pool-
Gard, Perma-Gard III, Neoflex and Elasta-Gard. The company supplies to new construction
as well as to retrofit projects throughout the country through its extensive distribution
network.
#F397-39 © 2005 Frost & Sullivan www.frost.com 3-30
Chart 3.5 shows the key strategies adopted by Neogard that has helped the company to grow
at the current rate.
C h a r t 3 . 5
Elastomeric Coatings Market: Key Strategies adopted by Neogard (U.S.), 2004
Note: Neogard is the recipient of 2005 Frost & Sullivan Growth Strategy Leadership Award.
Source: Frost & Sullivan
C u s t o m i z e d P r o d u c t L i n e
Neogard manufactures quality coatings that are engineered differently to meet different
requirements within the same end use. For instance, within the elastomeric floor coatings
segment, Neogard manufactures three products, which can withstand pedestrian traffic.
Standard Peda-Gard is the one, which is recommended for most applications. Fast Cure Peda-
Gard Elastomeric coating helps in minimizing shutdown time and enables fast turnaround
times while Decorative Peda-Gard coating is used where aesthetics is a concern. The
company also manufactures roofing systems, which includes elastomeric-coated Spray
Polyurethane Foam (SPF) roofs and other flooring systems, which helps the company to serve
its customers better. These products clearly demonstrate the company’s technological
leadership.
Neogard
Experiencing High Growth
Strategic Partnership
Technological Leadership
Creating Brand Value
Distribution Channel Mix
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C r e a t i n g B r a n d V a l u e
Neogard’s products have been used in many prestigious and demanding projects. For
instance, the parking garage of White Flint Mall in North Bethesda, Maryland and the
Bellagio Resort in Las Vegas, California have been two major challenging projects
undertaken by Neogard. Auto-Gard, the company’s vehicular traffic bearing waterproof
coating, was chosen to cover the area of 600,000 sq. feet of concrete parking structure at
White Flint Mall. Auto-Gard’s customer friendly features include its ability to withstand
heavy vehicular traffic, resist natural forces such as rain and wind and prevent staining due
to chemicals such as brake fluids and battery acids. For the Bellagio resort project, Auto-
Gard, Peda-Gard, and Neoflex coating systems were used to provide protection to the
parking garages, balconies, and domes of the resort against the high-speed abrasive winds in
Mojave dessert.
Having accomplished many such demanding projects, and also having highlighted these
projects as case studies on its web site and other publications, Neogard has successfully
created a brand-value. This helps to foster business relationships with architects/contractors
who work on governmental and other important projects such as religious buildings,
shopping malls, hotels, resorts and so on. This gives rise to many new business opportunities
besides repeat business.
S t r a t e g i c P a r t n e r s h i p
Neogard has partnered with BASF Corporation and many fine contractors such as Wattle &
Daub Contractors, Inc., Dallas Urethanes, Inc. and so on to provide the Alpha roofing
system. The Alpha roof offers a quantifiable and a verifiable roofing solution for building
owners who want to minimize the risks of a roofing job. It combines polyurethane
elastomeric coatings manufactured by Neogard and SPF, manufactured by BASF
Corporation. Also, the most skillful contractors are hired to install the roofing system. Alpha
contractors have a performance history of installing roofs of which at least 98 percent are
leak proof. The manufacturers issue a 15-year joint warranty that covers the performance of
the system without the exclusion of damage caused by severe hail, 90 mph wind forces,
ponding water and so on.
This partnership has aided Neogard to reinforce their position as a leading supplier of
polyurethane elastomeric roof coatings.
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E f f i c i e n t D i s t r i b u t i o n C h a n n e l s
Neogard has correctly identified the distribution channel required to sell successfully into a
particular segment. The company mostly relies on direct sale to approved contractors for the
floor and roof coatings segment. This is because the company has realized that the
application of the coating is as critical as the quality of the product. Neogard has a good
network of approved contractors with several years of experience. Supplying through
independent distributors gives the company the ability to serve customers located in different
geographical regions. Neogard has a regional manager for different regions of United States,
under whom there are several area representatives to coordinate the sales in the particular
region.
In conclusion, Neogard is a company committed to excellence. The company’s manufacturing
capabilities and a dedicated R&D department is responsible for many of their products like
Elasta-Gard Roof Coatings to be Underwriters Laboratories’ and Factory Mutual Approved.
Also the company’s enviable job and performance history provides it a competitive edge.
Neogard is growing significantly in a period where many of its competitors participating in
the floor coatings market are loosing market share. Hence, Neogard is a deserving recipient
of the 2005 Frost & Sullivan Award for Growth Strategy Leadership in the U.S. Elastomeric
Coatings Market.
Product Line Strategy Leadership Award
The Frost & Sullivan Market Award for Product Line Strategy Leadership is presented each
year to a company that has demonstrated the most insight into customer needs and product
demands. The recipient company should have optimized its product line by leveraging
products with the various price, performance, and feature points required by the market.
R e s e a r c h M e t h o d o l o g y
To select the Award recipient, the analyst team tracks all end-user requirements and market
dynamics within the industry. This process includes interviews with suppliers, end-users, and
industry experts. The product lines are compared with customer base demands, and the
top-ranking supplier is then presented the Award.
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M e a s u r e m e n t C r i t e r i a
In addition to the methodology described above, there are additional criteria used to
determine the final competitor rankings in this industry. The recipient of this Award should
have excelled in one or more of the following criteria:
■ Introduction of new products, strategically positioned to balance the product line
■ Ability to accommodate different market segments, or different markets within an
industry by repurposing technology
■ Enhancement of product offerings through optimization of packaging, service, delivery,
financing, and/or other value-added services
■ Strategic technology or marketing acquisitions or alliances
A w a r d R e c i p i e n t : D e g u s s a C o n s t r u c t i o n S y s t e m s
A m e r i c a s
The 2005 Frost & Sullivan Award for Product Line Strategy Leadership is presented to
Degussa Construction Systems Americas for its outstanding contribution to the U.S.
Elastomeric Coatings Market. The company has an exceptional product line to suit different
end-user requirements. For instance- the product IC2480, which is a polyurea based
elastomeric coating, enables a surface to be serviced within one hour and Silflex coating,
which is a silicone modified acrylic coating that can elongate by 700 percent. These products
are a result of the company’s research prowess and technical expertise, which is responsible
for making it one of the leading manufacturers participating in the U.S. elastomeric coatings
market.
Degussa is one of the world’s leading specialty chemical companies with offices/centers at
more than 300 locations and nearly 45,000 employees worldwide. Degussa Construction
Systems Americas, a division of Degussa Construction Chemicals, operates Degussa Building
Systems, and Degussa Wall Systems, Inc. Degussa Building Systems manufactures elastomeric
coatings under the Sonneborn and Thoro brands for the walls and floor coatings market
while Degussa Wall Systems, Inc. manufactures elastomeric wall coatings under the
Senerlastic brand name.
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Figure 3-8 outlines the elastomeric coatings the company manufactures.
Source: Frost & Sullivan
F i g u r e 3 - 8
Elastomeric Coatings Market: Elastomeric Coatings Manufactured by Degussa Construction
Systems Americas
Product Name Base Resin Substrate of Application Characteristics
Colorflex® Acrylic Stucco, Brick, Concrete, Concrete
Block Masonry (CMU), Exterior
Insulation and Finish Systems (EIFS)
One finish coat application on most
installations, available in 463 colors
Flexcoat® Acrylic Stucco, Brick, Concrete, CMU, EIFS Suitable for high humidity climates
Flextex® Acrylic Stucco, Brick, Concrete, CMU, EIFS Suitable for cool climates
IC2480 Polyurea Concrete, Metal Serviceable within one hour
Silflex® Silicone-
modified acrylic
Stucco, Brick, Concrete, CMU, EIFS Superior ability to bridge cracks with
total elongation of 700 percent
IC-5000 Polyurea Concrete, Steel Withstands vehicular traffic within
two hours
Thorogard™ Acrylic Previously coated surfaces, aged
stucco concrete and Portland cement
plaster, EIFS
Designed for recoat applications
Thorolastic® Acrylic Stucco, Concrete, Portland cement
plaster, Brick, CMU, EIFS
Bridges crack movement up to 27mils
Thorolastic
A+
Acrylic Stucco, Concrete, Portland cement
plaster, Brick, CMU, EIFS
Engineered for use in humid
conditions
Senerlastic Acrylic Concrete, Stucco, Masonry, EIFS Low temperature flexibility
Senerlastic
Plus
Silicone-
enhanced
Acrylic
Concrete, Stucco, Masonry, EIFS Excellent weather ability, protects
against wind-driven rain
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A b i l i t y t o A d d r e s s C u s t o m e r R e q u i r e m e n t s
Degussa Construction Systems Americas has identified that fast cure products are in great
demand, as polyurethane/ epoxy coatings require a turnaround time of 24-48 hours. To
address this need, the company manufactures two products, which are IC2480 and IC-5000.
Both these products are 100 percent solids, zero Volatile Organic Compounds (VOCs),
aromatic polyurea based elastomeric coatings, which necessitate a shutdown time of less than
two hours. The company also manufactures Flexcoat and Flextex acrylic coatings. These
coatings are both resistant to wind-driven rain and cover with one coat application on most
substrates. These coatings are also available in 470 colors. Degussa Construction Systems
Americas keeps the cost-conscious consumer in mind while manufacturing acrylic elastomeric
coatings, which are comparatively lower priced coatings.
M a j o r P r e s e n c e i n Tw o o f t h e T h r e e M a r k e t S e g m e n t s
Degussa Construction Systems Americas has a strong presence in both the elastomeric floor
coatings market as well as the elastomeric wall coatings market. The company ranks number
two in terms of sales in the elastomeric wall coatings segment and number three in the
elastomeric floor coatings segment. The company’s strong product line and its ability to
manufacture unique products are factors, which differentiates Degussa Construction Systems
Americas from the other companies participating in this market. For instance, Senerlastic
elastomeric wall coating is a unique product that shows remarkable flexibility, even at very
low temperatures and IC2480 is a sprayable polyurea-based elastomeric floor coating,
specifically engineered to withstand thermal movements besides being serviceable in one hour
and containing Zero VOCs.
R e s e a r c h a n d D e v e l o p m e n t F o c u s
Degussa Construction Systems Americas invests highly in research and development
activities, which enables new product development. The strong link with end users provides
it with information regarding the requirements of contractors and architects. Also, the
company’s technical capabilities ensure that its end users receive support at all times.
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S t r o n g B r a n d I m a g e
Degussa is a global company known for its quality products. The company’s brand image as
a technical innovator helps the company gain favor from architects and engineers when
exclusive and highly important projects are being considered. Also, the company’s extensive
distribution network, combined with its strong network of contractors, helps the company
increase its brand-value, enabling better business opportunities.
C o n c l u d i n g C o m m e n t s
In conclusion, Degussa Construction Systems Americas has well identified end user needs
such as low price, fast cure products, enhanced product functionality and so on, and has
products to meet these requirements. The company’s enormous research and development
capabilities make them one of the leading participants in the elastomeric wall and floor
coatings market. The company continues to concentrate on its core capabilities that enable it
to manufacture quality coatings, which adhere to the VOC regulations. Degussa
Construction Systems Americas is a deserving candidate of the 2005 Frost & Sullivan
Product Line Strategy Leadership Award for its outstanding contribution to the Elastomeric
Coatings Market.
Product Quality Leadership Award
The Frost & Sullivan Award for Product Quality Leadership is bestowed upon the company
that has demonstrated superior quality control—over their existing competitors—in product
manufacturing. Quality control is an essential element of satisfying customers, increasing
repeat buying behavior, and assuring long-term market survival.
R e s e a r c h M e t h o d o l o g y
To choose the Award recipient, the analyst team tracks all products and research and
development projects within the industry. This is accomplished through interviews with all
market participants, end-users, distributors, and extensive secondary and technology
research.
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M e a s u r e m e n t C r i t e r i a
In addition to the methodology described above, there are specific criteria used to determine
final competitor rankings in this industry. The Award recipient has excelled based on one or
more of the following criteria:
■ Lowest defect percentage per batch of units produced by suppliers in current base year
■ Product ability to fulfill customer needs, in terms of functionality and user friendliness
■ Number of breakdowns or services required per year
■ Degree of connectivity
■ Level of product support end-users receive from their vendors or suppliers
A w a r d R e c i p i e n t : U n i t e d C o a t i n g s
The 2005 Frost & Sullivan Product Quality Leadership Award for the U.S. Elastomeric
Coatings Market is presented to United Coatings. The award recognizes the company’s
pursuit for excellence and its ability to consistently manufacture high quality products, for
instance—Diathon and Elastuff 101/102. The company's research efforts, its commitment to
the environment and the technical support it extends to its customers are factors that clearly
differentiate United Coatings form the rest of the companies participating in this market.
United Coatings was founded in 1919 as a paint and hardware store. Today, it is a trusted
source of high-quality and high-performance coatings for contractors, architects, and
engineers worldwide. The company serves the architectural, roofing, industrial, and the
Do-It-Yourselfers (DIYs) segment. The company has a wide range of products to meet
different end-user requirements.
United Coatings manufactures acrylic elastomeric coatings such as Diathon, Acron 60 and
Acrycryl to primarily serve the roofing segment. The company serves both the renovation and
the new construction market. It also sells to substrate manufacturing companies, which sell
the coatings combined with their substrates as complete roofing systems. The company
retains a presence in the wall coatings market as well. It manufactures products such as
Aquathon and Marathon CWS coating systems. Marathon CWS is a unique acrylic coating
system that incorporates ceramic microspheres to the acrylic topcoat for enhanced
reflectivity. Chart 3.6 clearly shows United Coatings' strengths as a quality manufacturer of
elastomeric coatings.
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C h a r t 3 . 6
Elastomeric Coatings Market: Strengths of United Coatings (U.S.), 2004
Note: United Coatings is the recipient of 2005 Frost & Sullivan Product Quality Leadership Award.
Source: Frost & Sullivan
S u p e r i o r R e s e a r c h a n d D e v e l o p m e n t C a p a p b i l i t i e s
United Coatings possesses tremendous research acumen with leading industry experts and
chemists heading the R&D division of the company. The company has state-of-the-art
production facilities and quality control laboratories, which are among the finest in the
world. It also has certified quality control (QC) professionals and a highly experienced
technical support team to answer querries about their products.
The in-depth, and comprehensive research approach adopted by the R& D division of the
company ensures that every product adheres to the highest quality standards.
M a n u f a c t u r e o f L o w V o l a t i l e O r g a n i c C o m p o u n d ( V O C )
P r o d u c t s
United Coatings only manufactures 100 percent polyurethane products or water based
acrylic coatings which are both low on VOC content and hence very safe. This demonstrates
the company’s ability to manufacture quality products which are compliant with government
regulations. This ability has won the company many laurels including the environmental
protection agency’s Evergreen Award, which recognizes the company’s continued
environmental protection efforts. Also, United Coatings is the only company to win this
award twice.
Manufacture of Low VOC products
Strategic Partnership
Superior Research &
Development Capabilities
United Coatings
Contacts withEnd Users
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C o n t a c t s w i t h E n d U s e r s
United Coating believes that it is not only essential to manufacture and apply quality
coatings, but to also improve its formulation and functionalilty. As a result, the company
interviews its customers, on a regular basis by sending across questionnaires and thus
assessing the performance of its coatings and customer requirements. This aids in the
company obtaining a better understanding and insight as to how it can serve its customers
better.
United Coating’s technical support team, which has over 90 years of combined experience, is
ever receptive to questions about its products. Also, the company’s field officers,
warehousing representatives, and distributors ensure that assistance is available when
required.
S t r a t e g i c P a r t n e r s h i p
United Coatings has entered into a strategic partnership with Rohm and Haas Company to
provide the Duraplus Roofing System. The Duraplus roofing system comprises of a Spray
Polyurethane Foam substrate, topcoated with Diathon DP, a 100 percent acrylic elastomeric
coating supplied by United Coatings. The roofing system is available with a ten year
warranty from the Rohm and Haas Company, the world’s largest specialty chemicals
company. This partnership is a clear indication of the high quality coatings that United
Coatings manufactures.
C o n c l u s i o n
United Coatings is committed to the development and manufacture of high-quality products
that not only serves its purpose but also exceeds customer expectations. Its research focus
and excellent technical support ensure complete support throughout the life cycle of a
product. The company also ascertains that its products as well as the development process is
environment friendly. Also, its partnership with Rohm and Haas Company is a clear
testimony for the high performance of its products. Hence, these cumulative factors make
United Coatings a deserving candidate for the 2005 Frost & Sullivan Product Quality
Leadership Award in the U.S.Elastomeric Coatings Market.
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4U.S. Elastomeric Wall Coatings Market
I n t r o d u c t i o n
Market Overview
Elastomeric wall coatings represents the largest segment of all elastomeric coatings market in
the United States. They account for nearly 49 percent of the total market. These coatings are
generally acrylic or silicone-based and they mostly go over concrete or masonry surfaces in
commercial and industrial building walls. They also go over hard coat stucco which primarily
serve as substrates of exterior walls in residential homes. They are used on both new and
renovation projects. Elastomeric coatings are generally modified to go over different surfaces
depending upon the material and adhesion characteristics. The same coatings are also used
over different surfaces, but using an appropriate primer.
The performance requirements of wall coatings are that they should:
■ Maintain their aesthetic features, that is, color, finish and gloss
■ Be resistant to dirt and other particles
■ Be durable and long lasting
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Elastomeric wall coatings are very well suited for exterior walls. Besides meeting the above
aesthetic requirements, they also provide a uniform coating without cracking or peeling when
exposed to climatic variations. Cracks smaller than 1/16th of an inch need not be filled and
elastomeric coatings can directly be applied. Cracks larger than 1/16th of an inch need to be
caulked either with an acrylic or a silicone caulk as appropriate before applying the coating.
Elastomeric coating allows the substrate to "breathe", thereby permitting the moisture to
escape. These coatings are also resistant to mold and mildew formation. Elastomeric wall
coatings generally come in both smooth and textured finishes. The smooth coating can be
spray or roller applied while the textured coating will generally require a trowel.
Exterior walls are generally made up of masonry, concrete or stucco. Since these surfaces are
porous, and prone to hairline cracks, applying an elastomeric coating would be a good
choice. These elastomeric coatings when applied, would expand and contract along with the
wall surface thereby, preventing water seepage. While all exterior building materials are
susceptible to this expansion and contraction due to climatic changes, concrete and stucco
are particularly vulnerable as they are made up dissimilar materials. Once the water migrates
out during curing, the hard material left behind shrinks and cracks, leaving the surface
exposed to moisture. Thus, elastomeric coatings are ideal for this kind of application.
As with traditional paints, the ability of elastomeric coatings to perform to its optimum
depends on proper surface preparation. Most exterior coatings i.e. elastomeric and normal
paints, fail due to the presence of contaminants on weathered surfaces. Dirt, dust, grease, oil,
rust, and chalk should be removed through pressurized water cleaning. Efflorescence may
require the use of chemical cleaners and pressure washing. If the surface is new, an
appropriate sealer must be used to seal out the alkalinity. Lastly, in renovation projects, old
paint films that are not bonded properly to the substrate must be removed otherwise the
curing stress of a newly applied elastomeric coating can cause the old coatings to come off.
This will result in elastomeric coatings not fulfilling its intended purpose.
Market Engineering Measurements
Chart 4.1 represents the Market Engineering measurements for the U.S. elastomeric wall
coatings markets in 2004.
#F397-39 © 2005 Frost & Sullivan www.frost.com 4-2
C h a r t 4 . 1
Elastomeric Wall Coatings Market: Market Engineering Measurements (U.S.), 2004
Market Engineering Drives Market
Strategy and Planning
MarketEngineer
ChallengeIdentification
MarketResearch
MarketEngineering
System
Implementation
MarketPlanning
MarketStrategy
Note: All figures are rounded. Source: Frost & Sullivan
M a r k e t S i z e
The elastomeric wall coatings market in the United States in 2004 was worth $300 million.
This is expected to grow at a compound annual growth rate (CAGR) of 7.6 percent to reach
$500.4 million by the year 2011.
M a r k e t A g e
The elastomeric wall coatings market is at a growth stage and has been growing at the rate of
5.5 to 6 percent for the last three years. The growth in this market is dictated by the high
performance requirements of end users and the growth in the usage of tilt-up concrete for
building construction.
Measurement Name Measurement Trend
Market age Growth ---
Revenues $300 million Increasing
Potential revenues (maximum future market size) $500.4 Increasing
Base year market growth rate 6.5% Increasing
Forecast period market growth rate 7.6% Decreasing
Average price $20 per gallon Increasing
Price range $12 to $30 per gallon Stable
Price sensitivity High Increasing
Competitors (active market competitors in base year) 100 Increasing
Degree of competition High Increasing
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C o m p e t i t i o n
The elastomeric wall coatings market in the United States is fragmented and is at a mature
stage with a few national suppliers and a number of regional suppliers. There are about a
100 suppliers. The top three manufacturers of elastomeric wall coatings are The Sherwin-
Williams Company, Degussa, and ICI Paints. Generally companies concentrate on
elastomeric wall coatings as applied to either new or renovation building construction
projects.
D i s t r i b u t i o n S t r u c t u r e
Many companies in the elastomeric wall coatings market sell their products through
distributors. There are also a few products that are available in Home depot, Lowe’s and
similar other places which are targeted at the Do-Iy-Yourself market.
Figure 4-1 shows the distribution channel adopted by the top companies participating in this
market.
Source: Frost & Sullivan
F i g u r e 4 - 1
Elastomeric Wall Coatings Market: Distribution Channel Followed by Key Suppliers (U.S.),
2004
Direct Sale to Sale through
Company Contractors Distributors Mix of Both
Benjamin Moore & Co. ■
Degussa Construction Systems Americas ■
Dryvit Systems, Inc. ■
ICI Paints ■
M.A.B. Paints ■
Neogard, a division of Jones- Blair Company ■
Sika Corporation ■
Sto Corporation ■
Textured Coatings of America, Inc. ■
The Sherwin- Williams Company ■
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F o r e c a s t s a n d T r e n d s
Market Drivers
Figure 4-2 shows the drivers, ranked in order of impact, for the U.S. elastomeric wall
coatings market for the period 2005-2011.
Source: Frost & Sullivan
P o p u l a r i t y o f T i l t - u p C o n c r e t e i n B u i l d i n g
C o n s t r u c t i o n F u e l s D e m a n d f o r E l a s t o m e r i c C o a t i n g s
Tilt- up concrete is increasingly being used in building construction. This construction is
gaining market share because of its speed of construction, low cost, and the architectural
treatments that they can be given. As per Tilt-up Concrete Association, the usage of tilt-up
concrete in 2004 has soared by 23 percent as compared to the previous year. With concrete/
masonry structures prone to cracking and elastomeric coatings known for its crack-bridging
and waterproofing abilities, the usage of elastomeric coatings is on the increase. This driver
is expected to highly impact the market in the near future.
P r o d u c t F u n c t i o n a l i t y I n c r e a s e s S a l e s
Elastomeric coatings are a unique product. Besides crack-bridging and waterproofing, they
are also weatherproof and dirt and mildew resistant. These coatings, especially the acrylic
and silicone coatings, are mostly used for wall coating applications and are easy to apply and
are low on VOC content. Building owners and contractors, particularly in the coastal areas,
use these coatings as they have the ability to protect the substrate against wind-driven rain
and the moisture in the air. However, due to their high costs, this driver is expected to have
only a medium impact throughout the forecast period.
F i g u r e 4 - 2
Elastomeric Wall Coatings Market: Market Drivers Ranked in Order of Impact (U.S.),
2005-2011
Rank Driver 1-2 Years 3-4 Years 5-7 Years
1 Popularity of tilt-up concrete in building
construction fuels demand for elastomeric coatings
Medium/ High High High
2 Product functionality increases sales Medium/ High Medium/ High Medium/ High
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Market Restraints
Figure 4-3 shows the restraints, ranked in order of impact, for the U.S. elastomeric coatings
market for the period 2005-2011.
Source: Frost & Sullivan
I n c r e a s i n g I n t e r e s t R a t e s f o r N e w H o m e S t a r t s C h e c k
G r o w t h
After witnessing historically low interest rates in 2004, lending rates for new housing starts
has begun to increase. But an overall improving economy, combined with an increase in
employment, is responsible for the high interest rates. This will result in fewer houses being
constructed which will check the growth of elastomeric wall coatings as well. This restraint is
expected to have a medium impact in the short term future and a lower impact in long term
as housing starts are expected to pick up.
T e n d e n c y o f A c r y l i c E l a s t o m e r i c C o a t i n g s t o B l i s t e r
I m p e d e s G r o w t h
Acrylic elastomeric wall coatings could sometimes blister if applied on moist masonry/
concrete substrate or if water has seeped through the coating and the coating has low water
vapor permeability. This moisture brings alkalinity along with it, which may blister or
separate the acrylic coating from the surface it is intended to adhere. Sometimes alkalinity, as
high as pH 10-11, is seen at the interfaces which affects the acrylic coating. The impact of
this restraint is low as most licensed contractors apply these coatings after the application of
a suitable primer or apply as per manufacturers instructions.
F i g u r e 4 - 3
Elastomeric Wall Coatings Market: Market Restraints Ranked in Order of Impact (U.S.),
2005-2011
Rank Restraint 1-2 Years 3-4 Years 5-7 Years
1 Increasing interest rates for new home starts check growth Medium Medium/ Low Medium/ Low
2 Tendency of acrylic elastomeric coatings to blister impedes
growth
Low Low Low
3 Lack of darker and brighter shades affect wall coatings
market
Low Low Low
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L a c k o f D a r k e r a n d B r i g h t e r S h a d e s A f f e c t W a l l
C o a t i n g s M a r k e t
Though resin technologies have advanced and a wide range of colors are available today,
darker and brighter colors can still be a problem. Creating these colors would need high
pigment loading which are UV sensitive and but these may decompose when exposed to
sunlight. Also, these colors are susceptible to moisture, which slows down curing time. End
users rarely wants dark or bright colors for their walls and hence this restraint is expected to
have a minor impact on this market for the next few years.
Revenue Forecasts
Figure 4-4 and Chart 4.2 show the revenue forecasts for the U.S. elastomeric wall coatings
market for the period 2001 to 2011.
Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
F i g u r e 4 - 4
Elastomeric Wall Coatings Market: Revenue Forecasts (U.S.), 2001-2011
Revenue
Revenues Growth Rate
Year ($ Million) (%)
2001 251.9 ---
2002 265.7 5.5
2003 281.7 6.0
2004 300.0 6.5
2005 320.4 6.8
2006 342.3 6.9
2007 366.5 7.1
2008 393.9 7.5
2009 425.9 8.1
2010 460.5 8.1
2011 500.4 8.7
Compound Annual Growth Rate (2001-2011): 7.6%
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C h a r t 4 . 2
Elastomeric Wall Coatings Market: Revenue Forecasts (U.S.), 2001-2011
Note: All figures are rounded. Source: Frost & Sullivan
In 2004, the revenues from the U.S. elastomeric wall coatings market were $300 million. The
market is forecast to grow to $500.4 million by 2011 at a CAGR of 7.6 percent. The key
driver for this is the increasing use of tilt-up concrete for residential and nonresidential
construction. Acrylic coatings, which constitute 90 percent of the elastomeric wall coatings
market, are the environment friendly and therefore, is also responsible for this high growth.
Market and Product Trends
The following are the market and product trends seen in the elastomeric wall coatings market
M a r k e t T r e n d s
Large Companies are Growing Faster Than Smaller Companies
The U.S. elastomeric wall coatings market has a few large national participants and several
small regional participants who serve the local market. Though the smaller companies
capitalize on local knowledge of what works and what doesn’t, its the large companies that
are seeing high growth in this market. The larger companies are gaining mainly because of
their wide distribution network coupled with the technical support they are able to provide
their contractors/customers. Contractors prefer using reputed brands as they are confident
that it will bring them repeat business. Also, large companies are in touch with their
contractors or end users all the time, and therefore, get a better understanding of their needs.
They invest heavily in R&D and have a broad product line. All these factors make companies
such as Sherwin-Williams, Dow Corning, Degussa and others perform better than their
smaller counterparts in the market.
0
100
200
300
400
500
600
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Rev
enue
s ($
Mill
ion)
0%
1%
2%
3%
4%
5%
6%
7%
8%
9%
10%
Gro
wth
Rat
e
Revenues ($ Million) Growth Rate (%)
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Demand for the Application of a Single Thick Coat
Contractors are demanding the formulation of an elastomeric coating which can be applied
in just one coat. Most of the current elastomeric coatings available in the market are to be
applied in two coats, which would ultimately dry down to a 15-25 mils. The application of a
single coat that would dry down to about 10 mils but will still retain all the properties of an
elastomeric coating.Contractors favor this as it would save them a lot in terms of time and
cost.
Product Trends
Every product in the elastomeric coatings market is moving toward lower VOCs so as to
meet government regulations in different regions of the United States. Hence companies are
moving toward creating more waterborne products. Besides these, there have been some
interesting product launches which suggest that a new product trend could emerge. One of
them is Loxon XP, launched by Sherwin-Williams in 2004 and it aims to cut down a step
during the application of an elastomeric coating. Loxon XP is an acrylic elastomeric coating
which can directly go over a concrete/masonry surface, thus eliminating the need for a
primer. This probably heralds a new trend in the elastomeric wall coatings market where new
products are created to counter the alkalinity of the concrete/masonry substrate directly
reducing the number of steps in the process and helping to increase the contractors’
productivity.
Pricing Trends
The following are the prices and the pricing trends in elastomeric wall coatings market.
P r i c e s o f E l a s t o m e r i c W a l l C o a t i n g s
The average price for a gallon of elastomeric wall coating in the United States is $20. Acrylic
wall coatings are cheaper and are priced between $12 to $30, while the silicone elastomeric
coatings are priced between $25 and $30.
P r i c i n g T r e n d s
The prices of elastomeric wall coatings have been on the rise as a result of uncertainty and
shortage in crude oil supplies and elastomeric resins. The monomer, butyl acrylate, which is
used in the manufacture of the acrylic elastomeric coatings, has been in shortage and so resin
manufacturers are faced with the dilemma of finding newer ways to meet this demand.
Hence, resin manufacturers have increased their prices which in turn has lead to elastomeric
wall coatings manufacturers to increase their prices by 5-10 percent in 2004. Though the
prices are unlikely to increase at the current rate in future, they are completely governed by
the crude oil supplies.
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C o m p e t i t i v e A n a l y s i s
Competitive Structure
Figure 4-5 presents the competitive structure of the total U.S. elastomeric wall coatings
market for 2004.
Source: Frost & Sullivan
In 2004, there were about a 100 elastomeric wall coatings suppliers. The top suppliers were
The Sherwin-Williams Company, Degussa, and ICI Paints. These three companies accounted
for more than 15 percent of the elastomeric wall coatings market. Besides these companies,
there are a few of other large companies such as Sto Corporation and Dow Corning
Corporation who have a major presence in this market. Several medium and small sized
regional suppliers also participate in this market who cater only to a particular region based
on their local knowledge.
The companies participating in this market could be classified based on their type as paint,
chemical, and specialty companies. A brief description of each type of suppliers in this
market is provided below.
F i g u r e 4 - 5
Elastomeric Wall Coatings Market: Competitive Structure (U.S.), 2004
Number of Companies in the Market Around 100
Types of Competitors Paint companies
Chemical companies
Specialty companies
Distribution Structure Direct sale to contractors
Sale through distributors
A mixture of both
Key End Users Nonresidential buildings, industrial buildings, residential homes and
buildings
Competitive Factors Price, quality of the product, reputation of the company, warranty,
environmental compliance, ease of application
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P a i n t C o m p a n i e s
Paint companies such as Sherwin-Williams, ICI Paints, Benjamin Moore, and M.A.B. Paints
constitute a big segment in this market. Also, there are a lot of traditional paint companies
trying to cash in the elastomeric coatings market. These companies are typically small and
have a few products in their product line. With elastomeric coatings gaining importance,
especially in coastal areas, many companies are buying these products from other companies,
rebranding it, and selling it as theirs. By this, the company can have a wider product offering
and can also meet the requirements of the contractors. The company also might want to try
selling these products before deciding to set up a manufacturing facility as being a paint
manufacturer, its easy to incorporate these elastomeric coatings into their product offering.
Hence, a large number of traditional paint manufacturers are playing an active role in this
market.
C h e m i c a l C o m p a n i e s
The other type of companies participating in this market are the chemical companies such as
Degussa, Dow Corning Corporation, and Sika Corporation that have an arm in the
elastomeric coatings market. Besides elastomeric wall coatings, these companies manufacture
adhesives, sealants, membranes, reinforcements, and the like. Hence, these companies are
characterized by their ability to cater better to a building construction.
S p e c i a l t y C o m p a n i e s
The specialty companies include companies such as Neogard, specializing in elastomeric
waterproofing products and companies such as Edison Coatings Inc. and IPA Systems Inc, in
elastomeric wall coatings besides a few other restoration products, sealants, and adhesives.
These companies are characterized by the fewer number of markets they participate in. Most
of these companies are small because of the nature of their business as they participate in
niche markets.
C o m p e t i t i v e F a c t o r s
The following are a few competitive factors based on which companies compete amongst
each other in the elastomeric wall coatings market:
Brand Image
Companies participating in this market make use of their already existing brand name and
image to penetrate this market. End users rely on the brand name for quality products,which
also provides them with some proof of work in the local region. This serves as a testimony to
the customer for purchasing a particular brand.
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Price
The elastomeric wall coatings market is very closely fought on price. Large commercial
projects require many hundreds of gallons of the coating and therefore, favor companies with
a good brand name selling at a competitive price. Hence companies are always on the
lookout to keep their prices as low as possible to lure these projects.
Technical Assistance
Technical assistance is also an important aspect to the contractor, especially the smaller ones.
Manufacturers who give good information about the product, their method of application,
etc. are always favored. Good technical assistance helps a contractor grow and gain
reputation making it an important factor while choosing a manufacturer for the elastomeric
coatings.
Market Participants
The following are a few companies that participate in this market:
T h e S h e r w i n - W i l l i a m s C o m p a n y
Sherwin-Williams is the market leader in the elastomeric wall coatings market. The company
manufactures acrylic elastomeric coatings and markets their products under the brand
names- Loxon XP, SherLastic, Conflex XL, and VIP. The company’s high investment in R&D
coupled with its extensive distribution network and technical support has enabled it to gain
the largest market share.
D e g u s s a C o n s t r u c t i o n S y s t e m s A m e r i c a s
Degussa is another major participant in the elastomeric wall coatings market. The company
participates in this market through its Construction System Americas business unit. The
elastomeric wall coatings are marketed under the brand names—Colorflex, Flexcoat, Silflex,
Thorogard, Thorolastic, Sonneborn®, and Senerlastic. Degussa supplies both acrylic-based
and silicone enhanced or siliconized acrylic coatings for exterior wall applications. The
company's products are sold mostly through independent distributors across the country.
Degussa is one of the leading chemical companies in the world with their extensive product
line and their image as technological innovators helps them market their products
successfully.
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I C I P a i n t s
ICI paints is another important participant in this market. The company sells its Decra-Flex
elastomeric coatings line in three textures that are smooth, coarse, and fine. The company
being a major paints manufacturer worldwide, has a good reputation and an established
distribution channel which enables them to sell their products in large volumes.
D o w C o r n i n g C o r p o r a t i o n
Dow Corning Corporation is a pioneer in the development and manufacture of silicone-based
high performance products. This company plays a very specific and an important role in the
elastomeric wall coatings market. The company manufactures the one component,
100 percent AllGuard elastomeric silicone coating for use over exterior walls. The AllGuard
coating has been used in many prestigious retrofit projects and can also be used in new
construction projects. Besides elastomeric coatings, the company manufactures over
7000 products for use in several industries.
S t o C o r p o r a t i o n
Sto Corporation is another major participant in the elastomeric wall coatings market. The
company manufactures both acrylic and silicone elastomeric wall coatings through their
brand names StoLastic and Sto Silco® Lastic. Besides these coatings, the company also makes
exterior wall claddings, concrete repair products, and air and moisture barrier products. Sto
invented the Exterior Insulation & Finish System (EIFS) and is a global participant.
D r y v i t S y s t e m s , I n c .
Dryvit Systems Inc., a subsidiary of RPM International Inc., is another major supplier of
elastomeric coatings that find applications over stucco, masonry, concrete, CMU, and EIFS
substrates. The company promotes its elastomeric coatings under Whetherlastic brand.
B e n j a m i n M o o r e & C o .
Benjamin Moore sells acrylic elastomeric wall coatings under Moorlastic brand. These
products are sold through independent paint dealers throughout the United States. The
company banks on its technical capabilities and its reputation to sell into this adjoining
market.
I P A S y s t e m s , I n c
IPA is a niche company which is involved in repair and restoration of masonry/concrete
structures, besides manufacturing a few specialty products for new construction. The
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company manufactures IPALastic which is a 100% acrylic elastomeric coating. The company
takes pride in being able to provide quality products and meeting its customer’s needs.
Market Share Analysis
The elastomeric wall coatings market in the United States was very fragmented and
comprised around 100 suppliers in 2004. The market was characterized by a handful of big
suppliers and a number of regional or niche coating manufactures. For the purpose of market
share analysis the competitors in this market are classified in the following three tiers.
T i e r 1 C o m p a n i e s
Companies with market shares in the range of five to ten percent of the total segment revenue
fall under this category. The Sherwin-Williams Company, Degussa, and ICI Paints were
identified as Tier 1 suppliers of elastomeric wall coatings in the United States. Sherwin-
Williams was the leading supplier, followed by Degussa in the second position, and ICI Paints
in the third position.
T i e r 2 C o m p a n i e s
Companies with market shares in the range of two to five percent of the total segment
revenue fall under this category. Sto Corporation, Dryvit Systems, Inc., Benjamin Moore &
Co., Dow Corning Corporation, Sika Corporation, and Textured Coatings of America, Inc.,
were identified as Tier 2 companies in this market.
T i e r 3 C o m p a n i e s
Tier 3 companies have market shares less than two percent of the total segment revenue. A
large number of paint manufacturers with a few elastomeric products in their portfolio
participated in this market. Some notable suppliers in this category include Neogard, United
Coatings, Tremco Inc., National Coatings Corporation, DeHaven Construction, Edison
Coatings, Inc., Everest Coatings, Inc., Metacrylics, Nationwide Chemical Coatings
Manufacturers, Inc., Rainguard Products Company, and Tamms Industries, Inc. among
others.
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S t r a t e g i c A n a l y s i s b y P r o d u c t s
Acrylic Elastomeric Coatings
M a r k e t O v e r v i e w
Acrylic-based elastomeric coatings are the most popular coatings used in exterior wall
applications. They constitute 90 percent of the elastomeric wall coatings market as
elastomeric acrylic resins offer good adhesion characteristics, high degree of flexibility and
elasticity, high tensile strength, and superior alkali and dirt resistance. Acrylic coatings are
generally water-based and have low VOC content, thus in line with the government
regulations. Also these coatings being one component coatings, can be easily applied with a
roller brush or can be spray applied, thus saving trouble for the applicators.
Acrylic elastomerics can also be applied by do-it-yourselfers, but to obtain better results,
manufacturers recommend the coatings to be applied by the authorized contractors. Most
companies also give a 5 year warranty period.
Another class of products which are sold in the market are the siliconized acrylics. These
Siliconized acrylics, comparatively a newer product, which combine the benefits of both-
acrylics and silicone elastomerics. These products have better adhesion and are easily
cleanable as the acrylics while at the same time have better UV resistance as that of the
silicones.
C o m p e t i t i v e A n a l y s i s
Most of the elastomeric wall coatings suppliers compete in this arena and they offer a
100 percent acrylic elastomeric coating. This is because of the growing popularity of acrylic
coatings which comes across as a good and clean waterproof coating to most end users.
Almost all of these coatings are compatible with concrete stucco, masonry, and EIFS. Though
the market is dominated by the same major manufacturers- The Sherwin-Williams Company,
Degussa, ICI Paints, and Sto Corporation, there are more than 75 medium and small coatings
manufacturers. Companies such as M.A.B. Paints and Textured Coatings of America Inc. or
Texcote are major participants in their local region. These companies compete on their
knowledge of the local market and weather conditions and their ability to manufacture such
suitable coatings. These companies mainly sell their products to contractors who then use it.
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Silicone Elastomeric Coatings
O v e r v i e w
Silicone elastomeric coatings were introduced in the early 1990s and since then Dow Corning
Company has been a pioneer in this field. Silicone coatings have exceptional water vapor
permeability and alkaline resistance. They have the ability to withstand high pH without the
need of a primer. These coatings could hence be used after a two day cure period over
concrete stucco or masonry surfaces. Elastomeric silicones also have high UV resistance and
have the inherent ability to withstand light, heat, and most chemicals. Many of these coatings
are one component coatings and hence are easy to apply. They have the ability to function at
extreme temperatures.
One of the concerns which most building owners have is that once silicone elastomerics are
applied, they generally cannot be recoated with another elastomeric coating. Elastomeric
silicone coatings contribute 10 percent to the elastomeric wall coatings market.
C o m p e t i t i v e A n a l y s i s
The elastomeric silicone coatings market is dominated single-handedly by Dow Corning
Corporation. There are also other companies such as GE Silicones, Everest Coatings, and
Gaco Western Inc. who also participate in this market but Dow Corning is the undisputed
market leader with its AllGuard Silicone Elastomeric Coating. Dow Corning has successfully
waterproofed many buildings throughout the United States with its AllGuard Elastomeric
Coatings, for instance- the Barton Oaks Plaza at Austin, Texas. This has saved many
buildings from water leakage and expensive re-cladding without disturbing work within and
all this within a reasonable period of time.
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5U.S. Elastomeric Floor Coatings Market
I n t r o d u c t i o n
Market Overview
The elastomeric floor coatings contribute over 19 percent to the total elastomeric coatingsmarket. These coatings are used on decks, parking garages, terraces, parapets, walkways,stadium surfaces and other similar surfaces.The bulk of these floor coatings arepolyurethane-based. Polyureas and acrylics also have a small share in this market.
The performance requirements of floor coatings are listed as below:
■ The coated floor should be capable of withstanding the traffic over it. This includes bothvehicular and foot. Certain areas have very high traffic such as parking decks anddriveways.
■ Abrasion and chemical resistant
■ Dirt and dust resistant. Areas with high traffic accumulate dirt quickly.
■ Durable and long lasting.
■ The floor must be weatherproof. This mostly applies to exposed surfaces.
■ The coated floor should maintain its color and finish.
Elastomeric floor coatings are well engineered to handle these requirements. Theirweatherproofing and waterproofing qualities contribute to their durability and long lastingproperties. The polyurethane coatings which comprises the majority of the coating sold inthis market come in both one and two components, while the polyureas are two componentsystems.
Coatings are engineered differently to meet each of the different performance requirements.For instance, in case vehicular traffic decks, these coatings are engineered to offer additionalstrength and skid resistance on areas such as ramps and curves and in the case of specialtydecks as in mechanical equipment rooms, suitable coatings provide protection over andaround equipment pads and protrusions. Elastomeric coatings are also widely used forrecreational purposes such as decks surrounding swimming pools, tennis courts where thesecoatings offer an attractive and a skid resistant surface.
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Elastomeric floor coatings are applied both new construction as well as renovation projects.
These coatings are sold accordingly to building contractors or restoration/ waterproofing
contractors and applied at the job site.
Market Engineering Measurements
Chart 5.1 presents the Market Engineering measurements for the U.S. elastomeric floor
coatings markets in 2004.
C h a r t 5 . 1
Elastomeric Floor Coatings Market: Market Engineering Measurements (U.S.), 2004
Market Engineering Drives Market
Strategy and Planning
MarketEngineer
ChallengeIdentification
MarketResearch
MarketEngineering
System
Implementation
MarketPlanning
MarketStrategy
Note: All figures are rounded. Source: Frost & Sullivan
Measurement Name Measurement Trend
Market age Growth ---
Revenues $120 million Increasing
Potential revenues (maximum future market size) $171.1 million Increasing
Base year market growth rate 4.0% Increasing
Forecast period market growth rate 5.2% Decreasing
Average price $30 per gallon Increasing
Price range $15 to $45 Stable
Price sensitivity High Increasing
Competitors (active market competitors in base year) 40 Increasing
Degree of competition Medium Increasing
Market concentration (percent of base year market controlled by top three
competitors)
42% Decreasing
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M a r k e t S i z e
The elastomeric floor coatings market in the United States in 2004 was worth $120 million.
This is expected to grow at a compound annual growth rate (CAGR) of 5.2 percent to reach
$171.1million by 2011.
M a r k e t A g e
The elastomeric floor coatings market is at a growth stage and has been growing steadily at
the rate of 3.5 to 4 percent for the last three years. In the next 5 to 7 years the market is
expected to grow by four to six percent. The growth in this market is dictated by the
different performance requirements of various end uses and the ability of elastomeric
coatings to meet the requirement.
C o m p e t i t i o n
The elastomeric floor coatings market comprises of a few national suppliers and many
regional suppliers. There are about 50 suppliers in all in the United States. The top three
manufacturers of elastomeric floor coatings are Neogard, 3M, and Degussa Building Systems.
These companies alone account for 42 percent of the entire elastomeric floor coatings
market.
D i s t r i b u t i o n
One of the following distribution channels are followed by elastomeric coatings
manufacturers in the United States:
■ Direct sale to contractors
■ Sales through independent distributors
■ Mix of both of the above
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Figure 5-1 shows the distribution channel followed by a few key suppliers in this market.
Source: Frost & Sullivan
Many of the elastomeric coating manufacturers sell their products directly to contractors.
This is because elastomeric floor coatings when applied in certain areas have to meet a few
performance requirements which only when applied by an authorized contractor, can the
manufacturer ensure its longevity and durability. Also for large projects such as parking
decks, it is more economical for the contractor to buy directly from the manufacturers than
through the distributors. Hence, in these cases both manufacturers as well as contractors
prefer dealing directly with each other. A lot of coating manufacturers are also selling
through a mix of both the distribution channels. Selling through distributors enables them to
widen their reach within the country thereby enabling them to make newer contacts and do
greater business.
F i g u r e 5 - 1
Elastomeric Floor Coatings Market: Distribution Channel Followed by a Few Key Suppliers
(U.S.), 2004
Direct Sale to Sale through
Company Contractors Distributors Mix of Both
Degussa Construction Systems Americas ■
Neogard, a division of Jones- Blair Company ■
Pacific Polymers International Inc. ■
Sika Corporation ■
Tremco Sealants/Waterproofing Division ■
3M ■
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F o r e c a s t s a n d T r e n d s
Market Drivers
Figure 5-2 shows the drivers, ranked in the order of impact, for the U.S. elastomeric floor
coatings market for the period 2005-2011.
Source: Frost & Sullivan
H i g h P e r f o r m a n c e R e q u i r e m e n t s C r e a t e D e m a n d f o r
E l a s t o m e r i c C o a t i n g s
Areas such as parking decks and parking garages would require coatings that can withstand
the vehicular or foot traffic while areas such as aircraft hangars or mechanical rooms where
heavy industrial equipment are placed, will need a coating that can withstand the vibration
of equipment without rupturing or delaminating. Elastomeric coatings have high traffic
bearing capacity and excellent impact, chemical, and abrasion resistance. These coatings can
extend by 200 to 400 percent as the situation demands and can waterproof the surface. These
coatings are designed to be turned up at the walls and columns so as to maintain one integral
waterproofing membrane. All this contributes to these elastomeric coatings being widely used
in situations which demand high performance.
F a s t S e t t i n g T i m e o f P o l y u r e t h a n e s a n d P o l y u r e a s S p u r s
G r o w t h
Polyurethanes and polyureas cure rapidly to form a monolithic waterproofing membrane. On
an average, polyurethane-based coatings cure in 48 hours at suitable temperatures and
humidity levels polyurea-based coatings cure in 30 minutes as against other traditional
systems which are both time and labor intensive. This reduces shutdown time and enables
work to commence immediately, which is very critical in industrial work floors. Hence, the
use of elastomeric polyurethanes and polyureas for floor coating applications are increasing.
The impact of this driver is expected to be high for the next two to three years.
F i g u r e 5 - 2
Elastomeric Floor Coatings Market: Market Drivers Ranked in Order of Impact (U.S.),
2005-2011
Rank Driver 1-2 Years 3-4 Years 5-7 Years
1 High Performance Requirements create demand for elastomeric
coatings
High High High
2 Fast setting time of polyurethane and polyurea Medium/ High High High
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Market Restraints
Figure 5-3 shows the restraints, ranked in the order of impact, for the U.S. elastomeric floor
coatings market for the forecast period 2005- 2011.
Source: Frost & Sullivan
H i g h e r C o s t o f P o l y u r e t h a n e a n d P o l y u r e a - b a s e d
E l a s t o m e r i c F l o o r C o a t i n g s A f f e c t G r o w t h
Though the polyurethane and polyurea-based elastomeric coatings offer superior surface
properties, they come at a premium price. Both polyurethane/polyurea-based elastomeric
coatings are priced between $20 and $45.Hence, this factor is always considered before
building contractors make the final choice. This restraint is expected to have a high impact in
the short term future.
U s e o f S p e c i a l S k i l l s a n d E q u i p m e n t t o A p p l y R e s t r a i n s
G r o w t h
Polyurethane coatings are available as both one component as well as two component
systems. The two component systems combined with polyurea-based elastomeric coatings,
which are two component coatings, necessitate the use of pumps and special spray delivery
equipment besides special skills to apply. Although their fast setting properties will favor
their application in large open areas, industrial setups with a lot of machinery will require
pre-installation masking, protection, and detailing which may exceed the time savings. Hence
this factor serves as a roadblock when polyurethanes or polyureas are being considered for
application.
F i g u r e 5 - 3
Elastomeric Floor Coatings Market: Market Restraints Ranked in Order of Impact (U.S.),
2005-2011
Rank Restraint 1-2 Years 3-4 Years 5-7 Years
1 Higher costs of polyurethane and polyurea- based
elastomeric coatings affect growth
High Medium/
High
Medium/ High
2 Use of special skills and equipments to apply restrains
growth
Medium Medium/ Low Low
3 Competition from epoxies and cementitious products
check growth
Very Low Low Low
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C o m p e t i t i o n f r o m E p o x i e s , C e m e n t i t i o u s P r o d u c t s
C h e c k G r o w t h
Epoxies and polymer modified cement coatings compete with elastomeric coatings for use in
decks, industrial floors, and so on. These materials adhere well to common construction
surfaces such as masonry, concrete, metal, and wood, are easy to apply, and have good
chemical resistance. Since, elastomeric coatings possess a few superior properties such as
their ability to waterproof and are more durable and long lasting, the impact of this restraint
is low.
Revenue Forecasts
Figure 5-4 and Chart 5.2 show the revenue forecasts for the U.S. elastomeric floor coatings
market for the period 2001 to 2011.
Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
F i g u r e 5 - 4
Elastomeric Floor Coatings Market: Revenue Forecasts (U.S.), 2001-2011
Revenue
Revenues Growth Rate
Year ($ Million) (%)
2001 107.2 ---
2002 111.2 3.7
2003 115.4 3.8
2004 120.0 4.0
2005 125.2 4.3
2006 131.1 4.7
2007 137.6 5.0
2008 144.7 5.2
2009 152.6 5.5
2010 161.4 5.8
2011 171.1 6.0
Compound Annual Growth Rate (2004-2011): 5.2%
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C h a r t 5 . 2
Elastomeric Floor Coatings Market: Revenue Forecasts (U.S.), 2001-2011
Note: All figures are rounded. Source: Frost & Sullivan
In 2004, the revenues from the U.S. elastomeric floor coatings market were $120 million.The market is likely to grow to $171.1 million by 2011 at a CAGR of 5.2 percent. Thisgrowth will be due to the high performance requirement in several areas such as parkinggarages, industrial workshops, hangars and so on. The fast setting time which theseelastomeric coatings offer will further favor its growth.
Market and Product Trends
The following are a few trends in the elastomeric floor coatings market:
M a r k e t T r e n d s
Small Manufacturers are Gaining Market Share
The elastomeric floor coatings market has got is a mix of large national manufacturers suchas Neogard and 3M as well as small regional suppliers such as Metacylics and AlliedWaterproofing, Inc. Since these small regional companies cater mostly to local needs theyhave the competitive advantage of knowing many contractors locally and being located closeto the job site enables instant delivery of products. Their familiarity with the local weatherconditions and ability to sell their products at a much more competitive price than largenational suppliers helps them gain market share quickly.
Move toward Distribution of Coatings through Independent Distributors
Many elastomeric floor coatings manufacturers sell directly to contractors as the general sizeof the project is large.Projects such as parking decks, airplane hangars require several gallonsof coatings and hence the contractor would prefer buying it directly from the manufactureras this would save costs. Many manufacturers have realized selling through distributorsenables them to sell to new areas and to newer people. This enables them to establishcontacts with newer contractors and so a lot of companies are now selling throughdistributors as well.
0
20
40
60
80
100
120
140
160
180
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Rev
enue
s ($
Mill
ion)
0%
1%
2%
3%
4%
5%
6%
7%
Gro
wth
Rat
e
Revenues ($ Million) Growth Rate (%)
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The following are a few product trends in the elastomeric floor coatings market:
P r o d u c t T r e n d s
The following product trends are observed in the elastomeric floor coatings
High Demand for Polyurea-based Elastomeric Coatings
Polyurea-based elastomeric coatings are experiencing high demand because of its fast curing
time. Typically, polyurea-based coatings cure fully in 30 minutes and hence help in
minimizing shutdown time. These coatings can also be applied over a wide temperature
range. They are also abrasion and chemical resistant besides possessing the ability to
waterproof. Hence, in places where there is a high performance waterproofing requirement
with minimum shutdown time, for example, industrial work floors, parking decks and other
similar surfaces, polyureas seem to be in great demand.
Hybrid Products Emerging in the Coatings Market
Since both polyurethanes and polyureas have similar chemistry and comparable physical and
chemical properties, scientists are working toward creating a polyurethane-polyurea hybrid
elastomeric coating. This will combine the benefits of both polyurethanes that are available
at a lower cost and polyureas which have excellent properties such as wider application
temperatures and fast cure.
Increase in Acrylic Reinforced Products
Acrylic coatings have a small share in this market. One of the major reasons for this is that
these coatings have lower tensile strength as compared to the polyurethanes and polyureas.
However, acrylics are the most versatile of all coatings and possess outstanding flexibility
and adhesion characteristics. Also, they come at a lower cost than the polyurethane and
polyurea-based coatings. It is for this reason, a lot of manufacturers are reinforcing acrylic
coatings with some other external material so as to increase its strength. Hence, the
companies market these reinforced-acrylic coatings as coating systems. For instance- Elasto-
Tex Deck Coating manufactured by Pacific Polymers International, Inc. uses fiberglass to
strengthen the acrylic coatings.
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Pricing Trends
The following are the pricing and the trends in pricing seen in the elastomeric floor coatings
market.
P r i c i n g
The average price for a gallon of elastomeric floor coatings is $30. The price of a gallon of
acrylic elastomeric floor coating varies from $15 to $30, the same amount of polyurethane
floor coating will range between $20 to $40 and polyurea-based elastomeric floor coating
will range between $25 and $45.
P r i c i n g T r e n d s
The prices of elastomeric floor coatings have remained almost flat over the past two to three
years with very little variation. Though crude oil prices continued to escalate, the
manufacturers mostly absorbed these costs so as to be more competitive in the market but
now it has reached a situation where manufacturers are no longer able to contain the prices
and are passing on the increasing costs to the end users. The average prices of elastomeric
floor coatings were estimated to have increased by three percent during the year 2004. The
prices of these coatings in future depend entirely on the crude oil supply.
C o m p e t i t i v e A n a l y s i s
Competitive Structure
Figure 5-5 presents the competitive structure of the U.S. elastomeric floor coatings market in
2004.
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Source: Frost & Sullivan
In 2004, there were around 20 suppliers of elastomeric floor coatings in the United States.
The top three suppliers- Neogard, 3M, and Degussa Building Systems accounted for
42 percent of the total sales in the elastomeric floor coatings market, which clearly shows the
high level of concentration in this market.
The companies participating in this market could be classified into three types—chemical,
specialty, and paint companies. Chemical giants such as Degussa, 3M, and Sika Corporation
participate in the coatings market, at the same time specialty companies such as Neogard and
Carlisle Coatings & Waterproofing Inc. also participate. The large chemical companies serve
several markets and have presence in many countries. These companies have high R&D
expenditure and an extensive distribution channel.
The specialty companies, on the other hand, can be further split into two segments which are
large national companies and small niche companies. Large national companies such as
Neogard and Carlisle serve the elastomerics market in many parts of the country. These
companies are specialized and participate in only a few markets where all their efforts are
focussed. These companies have high R&D expenditure, a good brand name, and
manufacture competitive products. The small niche suppliers are very focussed in a particular
area. For instance, Allied Waterproofing Inc participates in the concrete restoration market.
This company also sells elastomeric deck coatings, membranes, and some caulks and
sealants. Their knowledge of local environment conditions, purchasing trends of customers,
and their local contact with contractors enables them to customize their products better to
their region of focus.
F i g u r e 5 - 5
Elastomeric Floor Coatings Market: Competitive Structure (U.S.), 2004
Number of Companies in the Market 40
Types of Competitors Chemical companies
Specialty companies
Paint manufacturers
Distribution Structure Direct sale to contractors
Sale through distributors
Mix of both
Key End-UsesFor application over parking garages, mechanical rooms, stadium
surfaces, walkways, parapets, terraces and so on
Competitive Factors Price, ease of application, company credentials, speed of application
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A few paint companies such as Sherwin-Williams and Life Paint Company also participate in
this market. Sherwin-Williams is one of world’s leading paints and coatings companies while
Life Paint company is a small paints and coatings company operating only within California.
Paint companies have a limited presence in this market.
C o m p e t i t i v e F a c t o r s
The following are a few competitive factors in the elastomeric floor coatings market.
Building Contractors consider each of these factors before finalizing in on the most
appropriate coating.
Price: The elastomeric floor coatings market is a very price competitive market. This factor is
at the top of the list while deciding a coating manufacturer for a particular project.
Ease of Application: This is another major factor while deciding on the coating especially,
when these coatings are to be applied over large areas. Acrylic elastomerics are the easiest to
apply while polyurea-based elastomerics are the most difficult, requiring expensive
equipment.
Company Credentials: The brand name, number of years the company has been in service,
job history, performance history are all important factors while deciding on the coating
manufacturer.
Speed of Application: This is a very important factor that is dependent on the urgency of the
job. Industrial work floors generally need the application of coatings in the shortest possible
time so that shutdown time is minimal and work is resumed immediately after.
There is usually a trade-off while deciding the type of coating. Depending on the priorities,
the contractor makes his final choice.
Market Participants
The following are a few companies that participate in this market
N e o g a r d , a d i v i s i o n o f J o n e s - B l a i r C o m p a n y
Neogard is the largest company operating in the floor coatings market accounting for
20 percent of total sales. The company makes polyurethane-based elastomeric floor coatings
for parking decks, walkways, sports stadiums, pavements etc., through its Auto-Gard,
Peda-Gard, Pool-Gard, and Perma-Gard 3 brands. Neogard also makes seamless
polyurethane and epoxy flooring systems. The company procures its products based on
performance. has a strong brand name and supplies throughout the country.
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3 M
3M is also a major participant in this market accounting for 12 percent of the total market,
though participating only in floor restoration systems. The company makes
polyurethane-based elastomerics and markets its products under the Scotch-Clad name. 3M
has the largest solvent free line of polyurethane elastomeric coatings. 90 percent of the
company’s urethane coatings are used for coating parking garages. 3M is a global chemical
company manufacturing a range of products for many industries. Its brand name coupled
with an excellent supply chain management reinforces its position at number two in the
elastomeric floor coatings market.
D e g u s s a B u i l d i n g S y s t e m s
Degussa Building Systems, another important participant in this market, sells polyurethane,
polyurea, and acrylic-based elastomeric floor coatings and contributes ten percent of the
total sales in this market. The company sells its products under the ThoRoc and Sonneborn
brand. Degussa relies on its technical expertise to manufacture newer and better products.
Their latest offering, IC 2480, is a fast setting polyurea-based elastomeric coating which can
be serviceable within one hour.
L y m T a l I n t e r n a t i o n a l I n c .
LymTal International is mid-sized and an important participant in the elastomeric floor
coatings market. The company manufactures polyurethane floor coatings for decks,
stadiums, plazas etc. Besides elastomeric coatings the company manufactures a range of
epoxy coatings, sealants, grouts and other similar coatings. The company manufactures an
extensive product line of polyurethane coatings, under the IsoFlex brand name, with many of
them being one component and low in VOC content. The company takes pride in providing
high quality products, product development, and the technical support it can offer to its end
users.
A l l i e d W a t e r p r o o f i n g I n c .
Allied Waterproofing is a small company participating in the concrete waterproofing and
repair industry. The company supplies elastomeric deck coatings for parking garages, sun
decks, pool decks, and balconies. The company also supplies some expansion joints, caulks,
and sealants. Allied waterproofing operates from Lyons, Illinois, and caters mostly to the
local region.
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Market Share Analysis
Figure 5-6 and Chart 5.3 represent the market shares by revenues of major participants in the
U.S. elastomeric floor coatings market in 2004.
Note: Others include Carlisle Coatings and Waterproofing Inc., Tremco Sealants/Waterproofing Division, LymTal International Inc., Pacific Polymers International Inc, The Sherwin- Williams Company, United Coatings, Edison Coatings, Inc., DeHaven Construction Company.
Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
C h a r t 5 . 3
Elastomeric Floor Coatings Market: Company Market Share by Revenues (U.S.), 2004
Note: All figures are rounded. Source: Frost & Sullivan
The top three suppliers namely Neogard, 3M, and Degussa Building Systems together
accounted for 42 percent of the total market. This shows that unlike the wall coatings
market, the floor coatings market is concentrated and is dominated by a few manufacturing
powerhouses. These companies have excellent R&D centers and the best distribution
networks. Neogard and 3M have a mix of both distribution channels, which gives them the
competitive edge.
F i g u r e 5 - 6
Elastomeric Floor Coatings Market: Company Market Share by Revenue (U.S.), 2004
Company 2004 (%)
Neogard 20
3M 12
Degussa 10
Others 58
TOTAL 100
Neogard20%
3M12%
Degussa10%
Others58%
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Other notable companies which also have a major presence, though locally, in this market
include Carlisle Coatings and Waterproofing Inc., Tremco Sealants/Waterproofing division,
LymTal International Inc., and Pacific Polymers. These companies have an extensive line of
products and they are major suppliers in their respective areas.
S t r a t e g i c A n a l y s i s b y P r o d u c t s
Polyurethane Elastomeric Coatings
Polyurethane-based elastomeric coatings have 90 percent of the floor coatings market share.
This is because these coatings have very high tensile strength and abrasion resistance and
hence can withstand heavy vehicular and pedestrian traffic. These coatings have been there in
the market for the last 20 years and have gained wide acceptability. They have excellent
chemical and sunlight resistance and suit public areas. Polyurethane coatings come in both
single and two-component systems. The two-component systems require the components to
be mixed in the correct ratio for their best performance.
The presence of moisture can cause foaming and can thus hinder curing. Many
polyurethane-based elastomeric coatings are solvent-based and companies are slowly moving
toward water--based urethanes since they are environment friendly and better comply with
the VOC regulations. Polyurethanes are also priced attractively when compared to its closed
competitor polyureas.
C o m p e t i t i v e A n a l y s i s
Almost all the companies participating in the floor coatings market have at least a
polyurethane product suitable for floor coatings. The leading manufacturers are Neogard,
3M, and Degussa. Neogard, and 3M manufacture only polyurethane coatings while Degussa
makes polyurethane, polyurea, and acrylic-based coatings. Neogard and 3M sell most of
their coatings for application on parking decks and since parking decks are huge projects, the
contractors prefer to buy it directly from the manufacturers. Hence, these companies sell a
lot of their coatings directly to manufacturers. While, Degussa sells a lot into other flooring
applications as well and sell their coatings through their distributors. Neogard and 3M sell
through distribution as well. Besides these companies Tremco Sealants/ Waterproofing
division, Pacific Polymers and LymTal International also play a key role in this market.
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Polyurea Elastomeric Coatings
Polyurea-based elastomeric coatings contribute seven percent to the elastomeric floor
coatings market. They are fast setting and are insensitive to moisture. They have excellent
adhesion characteristics, chemical resistance, abrasion resistance, and also have high tensile
strength. They are easy to apply and contain low or zero VOCs. These coatings are the most
expensive of all elastomeric coatings we are considering in this study. For applications such
as industrial work floors where work has to resume as quickly as possible, polyurea-based
coatings are the best alternative.
C o m p e t i t i v e A n a l y s i s
Fewer companies participate in the polyurea-based elastomeric coatings market as comparedto the polyurethane elastomeric coatings market. This is because polyureas are a newerproduct and also they are the most expensive of the elastomeric coatings. Also a lot of hypehas been created about these products which has deterred many companies from enteringinto this line. However, the features polyurea-based coating offer are unmatched, forexample, their fast setting times, their moisture insensitivity, and their ability to perform inextreme conditions.
Degussa is a major participant in this market. Sherwin Williams markets its EnviroLastic,polyurea-based elastomeric coatings for use on decks and floors. There are also a few smallcompanies participating in this market such as Polyurea Coatings Systems Incorporated andVersaFlex Incorporated.
Acrylic Elastomeric Coatings
Acrylic elastomeric coatings constitute three percent of the elastomeric floor coatings market.Though they have excellent adhesion characteristics, high degree of flexibility, and elasticity,these coatings are of lower tensile strength than polyurethanes and polyureas. Since flooringapplications require very high tensile strength to withstand the traffic above it, polyurethanesand polyurea-based coatings are preferred. However, acrylic coatings are generally waterbased and have low VOC content, thus in line with the government regulations. Thesecoatings being one component coatings, can be easily applied with a roller brush or can bespray applied and are the least expensive of all coatings.
C o m p e t i t i v e A n a l y s i s
A few companies manufacturing acrylic elastomeric coatings for floor coating applicationsinclude Degussa, Pacific Polymers International Incorporated and United Coatings. Manycompanies are reinforcing these coatings with other materials or are creating hybrid productsin order to make them stronger while retaining all the other beneficial properties of acrylics.For instance, Pacific Polymers’ Elasto-Tex deck coating is a fiberglass reinforced acrylic decksystem while Degussa manufactures Son-No-Mar under the Sonneborn brand which is apolyurethene-acrylic hybrid coating.
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6U.S. Elastomeric Roof Coatings Market
I n t r o d u c t i o n
Market Overview
Elastomeric roof coatings contribute over 32 percent to the total elastomeric coatings
market. These coatings are made to protect roofs of commercial, residential buildings, and
houses. Roof coatings are a very important system as a damaged or a leaking roof could
completely disrupt the work within.
The different substrates over which elastomeric coatings can be applied include asphalt,
modified bitumen, metal, spray polyurethane foam(SPF), built-up roof (BUR) amongst
others. The elastomeric roof coatings mostly include acrylic, silicone, and polyurethane
besides a few polyurea-based coatings. The selection of a particular type of elastomeric
coating depends primarily on the roofing substrate. For instance- Silicone-based elastomerics
adhere well to SPF roofs. The polyurethane and polyurea-based coatings would be mostly
used in places which would have some pedestrian traffic. Most of these coatings are used in
retrofit or renovation type projects.
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Since roof coatings are a very important system, there are a few performance requirements
these coatings are expected to meet. They are:
■ Roof coatings should have good adhesion characteristics. If these coatings are unable to
adhere to the substrates well, one will have to replace these coating sooner or later. To
ensure good adhesion, the application of a primer is usually recommended.
■ Since roof coatings are exposed to the brunt of nature, these coatings should have the
ability to withstand variations in temperature, that is, should not crack or peel due to
varying temperatures.
■ They should have high water resistance as sometimes these coatings would be expected to
handle waterlogging and in some cases, snow logging and therefore, the roofs are
generally sloped.
■ They should maintain their reflectivity for long.
■ They should be resistant to dirt and other dust particles.
■ They should be durable and long lasting.
■ They should maintain their color/finish.
Elastomeric coatings are very well engineered to meet these requirements. In addition to all
this, these coatings also offer excellent waterproofing, thereby ensuring that the roof lasts
long. A proper white reflective elastomeric coating could offer reduction in temperature and
hence reduction in cooling costs. Temperature reduction up to 50 degree Fahrenheit and
reduction in cooling costs by 20-25 percent is quite common. This would further translate
into reduced fuel usage and lower power-plant emissions. In addition to landfill usage, to
which roofing materials are a major contributor, in urban areas, the cumulative effect of
multiple cool roof systems will also reduce the urban ambient temperature.
Market Engineering Measurements
Chart 6.1 represents the Market Engineering measurements for the U.S. elastomeric roof
coatings markets in 2004.
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C h a r t 6 . 1
Elastomeric Roof Coatings Market: Market Engineering Measurements (U.S.), 2004
Market Engineering Drives Market
Strategy and Planning
MarketEngineer
ChallengeIdentification
MarketResearch
MarketEngineering
System
Implementation
MarketPlanning
MarketStrategy
Note: All figures are rounded. Source: Frost & Sullivan
M a r k e t S i z e
The elastomeric roof coatings market in the United States in 2004 was worth $200 million.
This is expected to grow at a compound annual growth rate (CAGR) of 15.4 percent to reach
$545.1 million by 2011.
Measurement Name Measurement Trend
Market age Growth
Revenues $200 million Increasing
Potential revenues (maximum future market size) $545.1 million Increasing
Base year market growth rate 20.0% Increasing
Forecast period market growth rate 15.4% Decreasing
Average price $17 per gallon Increasing
Price range $10 to $50 per gallon Stable
Price sensitivity High Increasing
Competitors (active market competitors in base year) 75 Increasing
Degree of competition High Increasing
Market concentration (percent of base year market controlled by top
three competitors)
23.3% Decreasing
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M a r k e t A g e
The elastomeric roof coatings market is at a high growth stage where it has been growing at
a CAGR of 17 percent from 2001 to 2004. The growth in this market is dictated mainly by
the lower life cycle costs of the roof experienced by its usage.
C o m p e t i t i o n
The elastomeric floor coatings market in the United States is at a growth stage with nearly
75 companies participating in this market. Among these, there are a few national suppliers
and the others mostly catering to few regions. The top three manufacturers of elastomeric
roof coatings are Henry Company, United Coatings, and National Coatings Corporation
accounting for 23.3 percent of the entire elastomeric coatings market.
D i s t r i b u t i o n
One of the following distribution channels are followed by elastomeric coating
manufacturers in the United States:
■ Direct sale to contractors
■ Sales through independent or company owned distributors
■ Mix of direct sale to contractors and sale through distributors
Figure 6-1 gives the distribution channels followed by a few key companies in this market.
Source: Frost & Sullivan
F i g u r e 6 - 1
Elastomeric Roof Coatings Market: Distribution Channel Followed by a Few Key Suppliers
(U.S.), 2004
Direct Sale to Sale through
Company Contractors Distributors Mix of Both
Elastomeric Roofing Systems, Inc. (ERSystems) ■
Henry Corporation ■
National Coatings Corporation ■
Neogard, a division of Jones- Blair Company ■
United Coatings ■
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Many of the elastomeric roof coating manufacturers sell their products directly tocontractors. This is because these coatings meet the performance requirements only whenapplied by an skilled contractor making it important for many large companies such asNational Coatings Corporation to sell their coating through approved applicators. A lot ofcoating manufacturers also sell these roof coatings through distributors. Selling throughdistributors enables them to widen their reach within the country thereby enabling them tomake newer contacts and do better business. Companies such as United Coatings sell throughboth the channels which gives them the competitive edge.
F o r e c a s t s a n d T r e n d s
Market Drivers
Figure 6-2 shows the drivers, in their order of impact, for the U.S. elastomeric roof coatings
market for the period from 2005 to 2011.
Source: Frost & Sullivan
L e s s e r L i f e - c y c l e C o s t o f E l a s t o m e r i c C o a t i n g s D r i v e s
D e m a n d
The lesser life cycle cost encountered when elastomeric coatings are applied onto the roofs isthe strongest driver for this market. People are realizing the application benefits ofelastomeric coatings such as reduced frequency of a roofing job and high energy savings forseveral years if a light colored roof coating is applied. With ordinary coatings, there is agreater possibility for the water seeping through the substrate and damaging the roof. Anordinary coatings has to be replaced every two to three years. With elastomeric roof coating,manufacturers offering long warranties (10 to 15 years), people are realizing that white orlight colored elastomeric roof coatings are the best alternatives.
F i g u r e 6 - 2
Elastomeric Roof Coatings Market: Market Drivers Ranked in Order of Impact (U.S.),
2005-2011
Rank Driver 1-2 Years 3-4 Years 5-7 Years
1 Lesser life cycle cost of elastomeric coatings drives
demand
Very High Very High Very High
2 Increasing demand for environment-friendly coatings
favors elastomeric coatings
Very High Very High High
3 Government encouragement to use white solar-reflective
coatings drives growth
High Medium/ High Medium/ High
4 Trend in roofing material favor elastomeric coatings
favor elastomeric coatings
Medium Med/High Medium/ High
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I n c r e a s i n g D e m a n d f o r E n v i r o n m e n t a l l y - F r i e n d l y
C o a t i n g s F a v o r s E l a s t o m e r i c C o a t i n g s
The U.S. environmental protection agency (EPA) also has driven change in the coatings
industry by continually tightening the solvent volatile organic compound (VOC) emission
regulations. These regulations require roof coating manufacturers and raw-material suppliers
to produce products that meet the lower VOC regulations. Since asphalt-based coatings
contain solvents and are high VOC coatings, people are favoring solvent free and water
based elastomeric coatings. This drives the growth of these environmentally friendly
elastomeric roof coatings. This driver is expected to highly impact the market in the next few
years.
G o v e r n m e n t E n c o u r a g e m e n t t o U s e W h i t e S o l a r
R e f l e c t i v e C o a t i n g s D r i v e s G r o w t h
Energy-efficient roofing systems are in demand as a result of rising energy costs, evolving
building codes, and greater sensitivity to the effects of urban heat islands. The use of
energy-efficient roofing materials results in cooler roof surfaces thus, less energy is spent on
air conditioning.
As a result of this demand and media focussing on ENERGY STAR® ratings and reflectivity,
acrylic coatings frequently are specified as finish coats for built-up and modified bitumen
roof systems and maintenance coatings for existing roof systems, including built-up,
modified bitumen, metal, spray polyurethane foam, and concrete.
T r e n d i n R o o f i n g M a t e r i a l F a v o r s E l a s t o m e r i c C o a t i n g s
In the 1980s, asphalt, bitumen, and metal roofs constituted most of the roofing substrates
but now the trend is changing. Roofing contractors are installing a lot of ethylene propylene
diene monomer (EPDM), SPF, single ply, and other roofing membranes. This gradual change
taking place in the roofing market is driving the growth for elastomeric roof coatings since
asphalt-based coating mostly go only over asphalt/bitumen roofs, while elastomeric roof
coatings could be applied over a wider range of substrates. This driver is expected to have a
low impact in the short term future though the roofing trends promise a higher impact in the
long term future.
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Market Restraints
Figure 6-3 shows the market restraints in their order of impact for the U.S. elastomeric roof
coatings market for the forecast period 2005 to 2011.
Source: Frost & Sullivan
A p p l i c a t i o n L i m i t a t i o n s o f E l a s t o m e r i c C o a t i n g s
R e s t r i c t s G r o w t h
Elastomeric coatings have a few application requirements which restrict its usage. For
instance, these roof coatings should be applied over 45 degree Fahrenheit and therefore, can
be applied mostly during summer. Acrylic elastomeric coatings require two physical changes
to occur for complete curing:
■ Water must evaporate first for initial drying to occur
■ Acrylic polymers must fuse together.
The first process occurs quickly while the second takes about two to four weeks sometimes.
Climatic conditions such as cold weather, rainstorms, high humidity and/ or fog and reduced
daylight hours during winters can hamper this process. Hence, in regions such as the pacific
northwest, these coating can be mostly applied only from May through October. This factor,
hence, significantly affects the elastomeric coatings’ market.
C o m p e t i t i o n F r o m O t h e r R o o f C o a t i n g s L i m i t s G r o w t h
Ordinary roof coatings are cheaper, have been in the market for a greater period of time and
are generally more acceptable to most people. Also with asphalt/bitumen roofs still
occupying a significantly greater market share in the roofing market, asphalt/ bitumen
coatings represent a cheaper and acceptable option.
F i g u r e 6 - 3
Elastomeric Roof Coatings Market: Market Restraints Ranked in Order of Impact (U.S.),
2005-2011
Rank Restraint 1-2 Years 3-4 Years 5-7 Years
1 Application limitations of elastomeric coatings restrict
growth
High Medium/ High Medium/ High
2 Competition form from other roof coatings limits growth Med/High Med/High Med/High
#F397-39 © 2005 Frost & Sullivan www.frost.com 6-7
Revenue Forecasts
Figure 6-4 and Chart 6.2 show the revenue forecasts for the U.S. elastomeric roof coatings
market for the period 2001 to 2011.
Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
C h a r t 6 . 2
Elastomeric Roof Coatings Market: Revenue Forecasts (U.S.), 2001-2011
Note: All figures are rounded. Source: Frost & Sullivan
F i g u r e 6 - 4
Elastomeric Roof Coatings Market: Revenue Forecasts (U.S.), 2001-2011
Revenue
Revenues Growth Rate
Year ($ Million) (%)
2001 123.9 ---
2002 142.5 15.0
2003 166.7 17.0
2004 200.0 20.0
2005 240.3 20.1
2006 285.2 18.7
2007 332.9 16.7
2008 379.5 14.0
2009 430.8 13.5
2010 486.1 12.8
2011 545.1 12.1
Compound Annual Growth Rate (2004-2011): 15.4%
0
100
200
300
400
500
600
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Rev
enue
s ($
Mill
ion)
0%
5%
10%
15%
20%
25%
Gro
wth
Rat
e
Revenues ($ Million) Growth Rate (%)
#F397-39 © 2005 Frost & Sullivan www.frost.com 6-8
In 2004, the revenues from the U.S. elastomeric roof coatings market were $200 million. The
market is forecast to grow to $545.1 million by 2011 at a CAGR of 15.4 percent. The key
driver responsible for this high growth is the lower life cycle costs associated with the usage
of elastomeric coatings. Acrylic coatings, which constitute 80 percent of the roof coatings
market, are the most environment friendly of all the other elastomeric coatings leading to
increase in demand and thereby, a higher growth.
Market and Product Trends
The following are the market and product trends seen in the elastomeric roof coatings
market.
M a r k e t T r e n d s
Roofing Companies Entering the Coatings Market
Many roofing companies are now participating in the coatings market. These companies
typically sell roofing membranes, some sealants, and adhesives. Since elastomeric roof
coatings are witnessing a high growth rate, a lot of roofing companies have entered and are
considering to enter this lucrative market. Many times these companies do not have the
required infrastructure and equipment to manufacture these coatings and hence indulge in
private labelling. These roof restoration companies purchase the elastomerics from another
major manufacturer and sell it along with their roofing products with their label on them.
P r o d u c t T r e n d s
Apart from the elastomeric roof coating, manufacturers moving toward waterborne coatings
which have low or no VOCs within them. The following are a few product trends.
Companies Concentrate on Manufacturing Fast Cure Coatings
Since the application of elastomeric coatings is greatly dependant on weather conditions,
companies are working toward the creation of fast cure products. Typically acrylic coatings
take two to four weeks to cure completely and to acquire their actual tensile strength and
flexibility characteristics. The emergence of fast cure products will greatly help this market
grow as elastomeric products are a superior product and fast curing products will increase its
usage in seasons other than summer. Polyureas are one class of elastomeric coatings which
can cure completely in 30 minutes.
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Acrylic and Polyurea-based Elastomeric Roof Coatings Grow Faster
Acrylic and polyurea-based elastomeric coatings are growing faster than silicone and
polyurethane-based elastomerics as acrylics are cheap, easy to apply, and offer good tensile
strength and durability. Also, with the state governments promoting the cool roofing
technology, white acrylic elastomeric coatings market is growing faster. Polyurea-based
elastomerics are growing fast as these coatings cure fast and offer excellent weatherproofing
and durability characteristics.
Breakthrough Product
National Coatings Corporation has come up with an innovative and a breakthrough product
for the SPF market. The company has manufactured AcryLock Base Coat A140 which is an
acrylic elastomeric coating which can go over silicone coatings. Earlier, only expensive and
solvent borne silicone coatings could be used over worn out silicone coated SPF roofs, but
now homeowners and contractors have the choice of using a high performing, less expensive,
and a waterborne acrylic coating.
Pricing Trends
The following are the pricing and the trends in pricing seen in the elastomeric roof coatings
market.
P r i c i n g
The average price for a gallon of elastomeric roof coating in the United States is $17 and
varies from $10 to $45. The price for a gallon of acrylic elastomeric roof coating falls
between $10 to $20. A gallon of elastomeric silicone coatings cost between $25 to $30. The
price range of the polyurethane and polyurea-based elastomeric roof coatings is $25 to $50.
P r i c i n g T r e n d s
The prices of elastomeric roof coatings have been going up in the last two to three years due
to the overall increase in the fuel and raw material prices. In 2004, the overall prices went up
by 10 to 15 percent though the prices of polyurea-based coatings have mostly remained
steady. This is probably because the manufacturers are realizing that the high costs are
restraining its growth and hence, they want to price it competitively. In future, though it is
unlikely that the prices continue to increase at the current rate, the costs are entirely
dependant on the crude oil supplies.
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C o m p e t i t i v e A n a l y s i s
Competitive Structure
Figure 6-5 presents the competitive structure of the U.S. elastomeric roof coatings market in
2004.
Source: Frost & Sullivan
In 2004, there were around 75 suppliers of elastomeric roof coatings in the United States.
Out of these around 75 percent of the companies concentrate on the roof restoration market.
The top three suppliers- Henry Corporation, United Coatings, and National Coatings
Corporation accounted for 23.3 percent of the total sales in the elastomeric roof coatings
market.
The companies participating in this market could be classified into four types- Roofing,
Specialty, Chemical and Paint companies. A short briefing about each of these are as follows:
R o o f i n g C o m p a n i e s
These companies are basically involved in manufacturing roofing materials, roof restoration,
and roof protection products. They have a good line of products which include elastomeric
coatings, roofing membranes, adhesives, and a few other products. These companies serve
their customers through contractors. Since the application of roof coatings is specialized, the
large companies generally have a few approved contractors, through whom they ensure that a
good job has been done. For instance- Henry Company is a leading roofing company
participating in this segment.
F i g u r e 6 - 5
Elastomeric Roof Coatings Market: Competitive Structure (U.S.), 2004
Number of Companies in the Market 75
Types of Competitors Roofing companies
Specialty companies
Chemical companies
Paint companies
Distribution Structure Direct sale to contractors
Sale through distributors
Mix of both
Competitive Factors Company credentials, Energy Star approval, warranty, price
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S p e c i a l t y C o m p a n i e s
These companies are generally focussed and manufacture a few products to suit a particular
industry. This could include elastomeric coatings, a few reinforcement membranes, adhesives
and so on. There are large companies as well as small companies which would fall into this
segment. Companies such as United Coatings manufacture coatings for architectural,
industrial, roofing, and do-it-yourself applications. These companies are characterized by a
good distribution network and a high R&D investment while smaller companies like Aldo
Products Company, Inc. have a few products for limited end uses. These companies are
regional and they do good business because of their strong business contacts.
C h e m i c a l C o m p a n i e s
These companies make several products, serving many industries and are usually
characterized by a good distribution system. Companies like Tremco participate in this
market but have limited presence in this market.
P a i n t C o m p a n i e s
Paint companies such as Sherwin-Williams and ICI paints have a limited presence in this
market as well. These large companies have a good distribution system in place coupled with
a strong brand name, which helps their products to do well in this market.
A lot of private labelling too takes place in this market. Many roofing companies sell
elastomeric coatings since its in line with their business. However, some of them get these
coatings from another manufacturer, rebrand them and then sell it.
Some companies also have approvals from associations such as Underwriters Laboratories
and Factory Mutual. Underwriters Laboratories is a world leader in testing and safety of
products while Factory Mutual is a leading organization in property loss prevention and risk
management. Companies like United Coatings, Henry Company, Everest Coatings, and
Conklin Company Inc. have got such approvals and are hence expected to gain market share.
C o m p e t i t i v e F a c t o r s
The following are a few competitive factors in the elastomeric roof coatings market. Building
Contractors consider each of these factors before finalizing in on the most appropriate
coating.
Company Credentials
The brand name, job history, performance history, and the number of years the company has
been in service are important factors that influence architects/contractors while deciding on
the coating manufacturer in this industry.
#F397-39 © 2005 Frost & Sullivan www.frost.com 6-12
Energy Star’s Approval
Many contractors these days are looking at coatings that have Energy Star’s approval before
using them. Energy Star is a government backed initiative that recognizes products and
businesses that help conserve energy. Energy Star approved elastomeric coatings can provide
temperature reduction of about 50 Fahrenheit and 10 to 15 percent energy savings. Hence,
building contractors and home owners are more and more conscious about using an Energy
Star approved elastomeric coating.
Warranty
Contractors prefer using coatings, which have long warranties. Companies give warranties
anywhere from 5 years up to 20 years. Long warranties help contractors gain recognition for
their work as much as for the coatings and hence, this factor is another key consideration
before selecting the manufacturer.
Price
Though not the most important factor while choosing a roof coating, the cost of the coating
is also of consideration while deciding on the type of coating and the manufacturer.
Market Participants
The following are a few companies that participate in this market
H e n r y C o m p a n y
Henry Company is the leading manufacturer of elastomeric roof coatings. The company
accounts for 12 percent of the total sales in the elastomeric roof coatings market. The
company manufactures acrylic elastomeric coatings, a silicone-based coating and several
other roof maintenance and restoration products. Henry company is committed to R&D and
is known for the quality of their products. The company’s brand name backed by the
experience of its approved contractors is what makes Henry hugely successful in this market.
U n i t e d C o a t i n g s
United Coatings is another leading participant in this market. The company retains sevenpercent of the market. The company manufactures a range of products for architectural,industrial, roofing, and do-it-yourself applications. United Coatings offer a complete line ofacrylic, silicone, and polyurethane elastomeric coatings for SPF roofs under the Diathon,Acron, Unisil, and Elastuff brands. Another unique product is the Roof Mate, which is anacrylic, high solids elastomeric coatings system which is designed to extend the life of bothnew and existing roof substrates. The company’s technical expertise and their reputation formanufacturing environment friendly coatings sets them apart from their competitors.
#F397-39 © 2005 Frost & Sullivan www.frost.com 6-13
N a t i o n a l C o a t i n g s C o r p o r a t i o n
National Coatings is another major participant in this market. The company has a market
share of 4.3 percent. National Coatings have earned the reputation of being technical
innovators besides manufacturing environment friendly products. The company mostly
manufactures one component waterborne acrylic elastomeric coatings under the brand name
AcryShield besides some reinforcements to extend the lives of the roofs. The company’s
technical knowledge, job history, and performance history gives it the competitive edge in
this market.
E l a s t o m e r i c R o o f i n g S y s t e m s , I n c ( E R S y s t e m s )
ERSystems is a leader in cool roofing technology. The company provides customized high
performing restoration systems to suit different substrates. The company manufactures a
complete line of high quality elastomeric coatings, membranes, sealants, and adhesives. The
elastomeric coatings include acrylic, polyurethane, and silicone-based coatings. The company
leads in restoring single-ply membranes and asphalt-based roofs. ERSystems is a charter
member in the Energy Star roof products program and was instrumental in developing the
Cool Roof Rating Council.
S t r u c t u r a l E l a s t o m e r i c P r o d u c t s , I n c
Structural Elastomeric Products, Inc makes the Elastek line of elastomeric coatings. This
company is comparatively small and regional but has an extensive product line to suit
different roofing substrates. The company’s success is attributed to its knowledgeable and
friendly staff and the ability to customize every project, thereby serving the end user better.
A l d o P r o d u c t s C o m p a n y , I n c
Aldo products is a specialty roof coating company that manufactures energy efficient
elastomeric roof coatings and a few primers and sealers. The company markets acrylic and
polyurethane elastomeric coatings under the brand name Aldocoat. The Aldocoat products
are Underwriters Laboratories and Factory Mutual approved. The company markets its
products through approved contractors as well as distributors.
#F397-39 © 2005 Frost & Sullivan www.frost.com 6-14
Market Share Analysis
Figure 6-6 and Chart 6.3 represent the market shares by revenues of major participants in the
U.S. elastomeric roof coatings market in 2004.
Note: Others include ERSystems, Gaco Western Inc, Everest Coatings Inc., Tremco Sealants/Waterproofing Division, Neogard, The Sherwin- Williams Company and Textured Coatings of America, Inc.
Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
C h a r t 6 . 3
Elastomeric Roof Coatings Market: Company Market Share by Revenues (U.S.), 2004
Note: All figures are rounded. Source: Frost & Sullivan
The top three suppliers namely, Henry Company, United Coatings, and National Coatings
Corporation together accounted for 23.3 percent of the total market. Other major
participants in this market include ERSystems, Gaco Western Inc., and Everest Coatings.
These companies besides investing heavily in R&D and manufacturing high quality products,
have the most experienced and skilled contractors which gives them the competitive
advantage.
F i g u r e 6 - 6
Elastomeric Roof Coatings Market: Company Market Share by Revenue (U.S.), 2004
Company 2004 (%)
Henry Corporation 12.0
United Coatings 7.0
National Coatings Corporation 4.3
Others 76.7
TOTAL 100.0
Others76.7%
˝
United Coatings7.0%
Henry Corporation12.0%
National Coatings Corporation 4.3%
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S t r a t e g i c A n a l y s i s b y P r o d u c t s
Acrylic Elastomeric Coatings
Acrylic elastomeric coatings represent the most important class amongst all elastomeric
coatings used for roof coating purposes. Acrylics constitute 80 percent of all elastomeric
coatings used in this market. This is because these coatings are waterborne, one component
coatings that have excellent adhesion characteristics, flexibility, dirt and mildew resistance,
and are easy to apply. These coating also have good tensile strength and durability. White
colored acrylic elastomeric coatings are most widely used although other lighter shades are
available. These coatings gain a competitive edge due to their lower costs, as compared to the
other elastomerics, and their environment friendly characteristics.
C o m p e t i t i v e A n a l y s i s
Almost every company that participates in this segment manufactures acrylic elastomeric
coatings. These coatings have become synonymous with roof coatings as they are used for
most roofing projects. The companies leading in manufacturing acrylic coatings would be the
same companies leading the roof coatings market segment namely—Henry Company, United
Coatings, and National Coatings. These companies gain their competitive edge due to their
high R&D investment, superior products, brand name, and their good network of approved
contractors. Most of the small companies too make many acrylic-based elastomeric coatings
for roofing purposes. This is because these coatings are versatile i.e. they can go over most
substrates and are competitively priced. A good roof coating is quite dependant on good
workmanship and hence most companies have their approved contractors.
Polyurethane Elastomeric Coatings
Polyurethane elastomeric roof coatings represent an important class of roof coatings which
need to withstand some foot traffic. These coating have a market share of 6 percent.They are
usually solvent-based and they come in one component as well as two component mixtures.
These coatings are superior to the acrylics as these coatings have higher tensile strength and a
better UV resistance. These coatings have the ability to withstand water and snow logging for
extended periods of time and are more resistant to weathering. Despite such superior
properties, polyurethanes are witnessing more or less a flat growth owing to their high cost
and their comparatively higher VOC content. Many companies are manufacturing fabric or
mesh reinforced acrylic elastomeric coatings, which are checking its growth.
#F397-39 © 2005 Frost & Sullivan www.frost.com 6-16
C o m p e t i t i v e A n a l y s i s
There are not many companies involved in the manufacture of polyurethane elastomeric roof
coatings. Polyurethanes are a preferred product for floor coating applications and hence,
many companies that manufacture these floor coatings are involved in polyurethane roof
coatings. A few of them are Neogard, Tremco Sealants and Waterproofing division, General
Coatings Corporation, and Gaco Western, Inc.
Silicone Elastomeric Coatings
Silicone elastomeric roof coatings constitute a small but prominent segment in this market.
They have a market share of 14 percent. They are one or two component solvent-based
coatings. They have the inherent ability to withstand harsh environmental conditions and are
capable of handling water and snow logging. They are also strong, flexible, and have good
resistance to mold and mildew. All these factors make them an excellent roofing material
which are highly durable and long lasting. Silicone coatings are more expensive than acrylic
coatings but they have superior properties. Silicone coatings are mostly applied over SPF
substrates.
C o m p e t i t i v e A n a l y s i s
There are fewer companies in the roofing arena which sell silicone-based elastomeric roof
coatings when compared to acrylic elastomeric coating. A few leading companies that sell
silicone coatings are Dow Corning, Henry Company, United Coatings and Gaco Roof, a
division of Gaco Western, Inc.
#F397-39 © 2005 Frost & Sullivan www.frost.com 6-17
7Appendix
D e c i s i o n S u p p o r t D a t a b a s e T a b l e s
Historical U.S. New Construction by Type
Figure 7-1presents the historical value of new construction for the period 1999 to 2004.
Definition: Above figure represents the value of private construction residential and nonresidential buildings only
Note: All figures are in terms of current dollar
Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
F i g u r e 7 - 1
Decision Support Database: Value of New Construction by type—USA (Million USD)
Years
Types 1999 2000 2001 2002 2003 2004
Residential 350,562 374,457 388,324 421,912 476,143 544,424
Industrial 32,639 31,801 29,521 16,403 14,231 14,750
Official 47,582 55,605 52,260 37,578 32,579 34,296
Hotels, motels 15,951 16,293 14,490 10,443 9,928 11,744
Other Commercial 54,317 58,067 58,471 53,397 52,396 55,396
Religious 7,371 8,030 8,393 8,335 8,481 8,073
Educational 9,645 11,375 12,591 12,841 13,096 12,549
Hospital and institutional 13,530 14,434 14,910 17,423 17,716 18,796
Miscellaneous 10,301 10,332 9,418 8,269 7,508 7,568
Farm nonresidential 5,059 5,988 5,135 5,786 5,284 5,702
Total 546,957 586,382 593,513 592,387 637,362 713,298
#F397-39 © 2005 Frost & Sullivan www.frost.com 7-1
U.S. New Onsite(Put in Place) Construction Forecast
Figure 7-2 presents the value of New Onsite (Put in place) Construction in the United States
for the period 2001 to 2011.
Definition: Above figure represents the value of construction installed or erected at the site during a given period
Note: 1.All figures are in terms of current dollar.2.Values include installed cost of normal building service equipment & site fabricated industrial production equipment3.Values do not consider cost of land, shipbuilding and machinery & equipment4.Different from building permit and construction contract data in terms of timing & coverage
Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
F i g u r e 7 - 2
Decision Support Database: US—Value of New Construction Put in Place (USD Million),
2001—2011
Year Total Growth Rate (%)
2001 858,291 -
2002 871,342 1.52
2003 915,742 5.10
2004 999,601 9.16
2005 1,092,264 9.27
2006 1,195,068 9.41
2007 1,310,201 9.63
2008 1,439,484 9.87
2009 1,585,217 10.12
2010 1,748,727 10.31
2011 1,933,865 10.59
CAGR % (2004—2011) 9.89
#F397-39 © 2005 Frost & Sullivan www.frost.com 7-2
U.S. Residential Remodelling and Repair Forecasts
Figure 7-3 presents the spending on residential remodelling and repair forecasts for the
period of 2001 to 2011.
Definition: Above figures represents total expenditure for maintenance, repairs, improvements, additions & alterations and major replacements of all US residential properties.
Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
F i g u r e 7 - 3
Decision Support Database: Spending on Remodeling and Repairs of all Residential
Properties—US, 2001—2011
US
Year Mn USD Growth Rate (%)
2001 627,300 -
2002 689,700 9.95
2003 707,000 2.51
2004 745,885 5.50
2005 788,400 5.70
2006 834,916 5.90
2007 885,011 6.00
2008 939,882 6.20
2009 1,000,974 6.50
2010 1,068,340 6.73
2011 1,141,628 6.86
CAGR % (2004—2011) 6.27
#F397-39 © 2005 Frost & Sullivan www.frost.com 7-3
U.S. Nonresidential Remodelling and Repair Forecasts
Figure 7-4 presents the spending on nonresidential remodelling and repair for the period
2000 to 2011.
Definition: Figures indicate total expenditure for maintenance, repairs, improvements, additions & alterations and major replacements of all US nonresidential properties.
Note: Above figure represent the expenditure incurred for maintenance, repairs and improvements of Commercial buildings only
Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
F i g u r e 7 - 4
Decision Support Database: Nonresidential Remodeling and Repairs—US, 2000—2011
Year US
Bn USD Growth Rate
2000 161.5 -
2001 158.8 (1.67)
2002 155.9 (1.83)
2003 159.6 2.37
2004 164.9 3.32
2005 170.8 3.58
2006 177.2 3.75
2007 184.2 3.95
2008 191.8 4.13
2009 200.3 4.43
2010 209.9 4.79
2011 220.2 4.91
CAGR (2004-2011) 4.22
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U.S. Roof Renovation Spending Forecasts
Figure 7-5 presents the roof renovation spending forecasts in the United States for the period
2001 to 2011.
Definition: Above figure represents the money spent on renovating roofs of owner-occupied properties.
Note: 1. Figures for 2004 are Frost & Sullivan estimates2. Figures include expenditure on Total Maintenance & Major Replacement
Note: All figures are rounded; the base year is 2004. Source: Frost & Sullivan
F i g u r e 7 - 5
Decision Support Database: Money Spent on Renovating Roofs —US, 2001—2011
Year US
Mn USD Growth Rate
2001 1,449 -
2002 1,869 28.99
2003 2,662 42.43
2004 2,759 3.64
2005 2,870 4.02
2006 2,997 4.43
2007 3,143 4.87
2008 3,306 5.19
2009 3,489 5.54
2010 3,707 6.25
2011 3,962 6.88
CAGR (2004-2011) 5.31
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