Terry Knowles, European Correspondent05.24.23
News in and around the UK coatings sector has been abundant just recently so this month I have taken the opportunity to highlight some important items from all parts of the sector.
This is not the only manner in which the UK's paint and coatings sector is being squeezed. Raw material and packaging prices are also putting UK companies under pressure. Some recent price developments that have been monitored and recorded across the start of 2023 (effectively a winter quarter) by the BCF are as follows:
• Solvent prices typically increased by levels of 20-30% over the winter quarter. Typical examples have been the prices of acetone (26% higher), petroleum naphtha (28% higher), white spirit (up 30%) and finally xylene (up by 36%).
• Extenders have also been getting more expensive; silica matting agents, for example, have been 40% dearer.
• Pigments demonstrate even more sizeable leaps in price, these being at 44% for zinc phosphate and 38% for zinc dust. Prices for TiO2 are at over £3,000 per tonne and 8% higher than the corresponding quarter-to-quarter periods of 2022-3.
• Packaging prices have also risen, typically by 10-20%.
The purchase is as strategic as it is unexpected. Universal Matter Inc (UMI) has developed its own graphene upcycling technology (flash joule heating) that can transform carbon-containing feedstocks into high-value graphene products and has locations in the USA. Its combination with Applied Graphene Materials is a win-win scenario in terms of material supply being fed into industry-ready solutions which then open out further around the world, and most notably for Universal Matter, to Europe.
AGM’s platform of dispersion technology can now be leveraged to enable the further expansion and use of graphene materials into many of the strategic market segments that UMI has been pursuing. The company's strong pipeline of ongoing customer engagements for product and technology evaluation will also significantly expedite UMI’s overall product/market adoption strategies.
John van Leeuwen, CEO of Universal Matter, summarised the value of the takeover to the company by saying that, “The acquisition of AGM fits exceptionally well with UMI’s growth strategy by significantly enhancing our dispersion and application capabilities for advanced paints and coatings. Moreover, it will provide UMI with an important European footprint for strengthening our growth potential.”
Michael Rolland, Managing Director of The Paint Shed said, “Looking ahead, the partnership with Brewers supports our view that, whether online or in-store, independent paint retailing is the future. We plan on continuing to win market share in the locations we serve and grow The Paint Shed brand wherever we think we can add value to the customer. In our experience, people prefer to shop with specialist retailers, as opposed to generalists or single brand offerings.”
That said, the Government will still go ahead with the removal and/or replacement of 600 EU-origin laws by the end of 2023, however none of those laws is critical to the field of chemical safety. A longer list of laws remains up for scrutiny but within a more sensible time-frame. These include:
• The Planning (Hazardous Substances) Regulations 2015
• Control of Major Accident Hazards Regulations 2015
• Offshore Installations (Offshore Safety Directive) (Safety Case etc) Regulations 2015
• Offshore Installations (Prevention of Fire and Explosion, and Emergency Response) Regulations 1995
• Dangerous Substances and Explosive Atmospheres Regulations 2002
Each of these laws was originally of UK origin and then became enshrined in EU law – with adoptions and amendments – during the UK's 47-year membership of the bloc.
Prices and demand squeeze UK industry
Independent statistics recently published by the British Coatings Federation (BCF) suggest that annual UK coatings sales reached about 425 million litres for the year 2022, down from about 482 million litres at the end of 2021 when cumulative moving demand as recorded by 12-month periods reached a local maximum in the early spring of about 555 million litres, a decrease of nearly 12% across 2022. The statistics illustrate very clearly the huge boom that the COVID lockdown period of 2020 brought to the paint industry through greater uptake of DIY and craft projects when stay-at-home requirements were in force. That boom equated to a 19% increase from 450 million litres in the 12 months to April 2020 to the 555 million litres by April 2021. Latest figures shown up until February 2023 show UK paint demand continuing on a downward trend. Sharply lower demand is how the BCF characterises it.This is not the only manner in which the UK's paint and coatings sector is being squeezed. Raw material and packaging prices are also putting UK companies under pressure. Some recent price developments that have been monitored and recorded across the start of 2023 (effectively a winter quarter) by the BCF are as follows:
• Solvent prices typically increased by levels of 20-30% over the winter quarter. Typical examples have been the prices of acetone (26% higher), petroleum naphtha (28% higher), white spirit (up 30%) and finally xylene (up by 36%).
• Extenders have also been getting more expensive; silica matting agents, for example, have been 40% dearer.
• Pigments demonstrate even more sizeable leaps in price, these being at 44% for zinc phosphate and 38% for zinc dust. Prices for TiO2 are at over £3,000 per tonne and 8% higher than the corresponding quarter-to-quarter periods of 2022-3.
• Packaging prices have also risen, typically by 10-20%.
Acquisition of Applied Graphene Materials
Applied Graphene Materials, the UK-based startup that has made huge strides in graphene dispersion technology and established key supplier relationships in many parts of the world over the last three years, has been acquired by the Canadian company Universal Matter Inc. The Canadian company has bought it through its UK arm for a total of US$1.3 million.The purchase is as strategic as it is unexpected. Universal Matter Inc (UMI) has developed its own graphene upcycling technology (flash joule heating) that can transform carbon-containing feedstocks into high-value graphene products and has locations in the USA. Its combination with Applied Graphene Materials is a win-win scenario in terms of material supply being fed into industry-ready solutions which then open out further around the world, and most notably for Universal Matter, to Europe.
AGM’s platform of dispersion technology can now be leveraged to enable the further expansion and use of graphene materials into many of the strategic market segments that UMI has been pursuing. The company's strong pipeline of ongoing customer engagements for product and technology evaluation will also significantly expedite UMI’s overall product/market adoption strategies.
John van Leeuwen, CEO of Universal Matter, summarised the value of the takeover to the company by saying that, “The acquisition of AGM fits exceptionally well with UMI’s growth strategy by significantly enhancing our dispersion and application capabilities for advanced paints and coatings. Moreover, it will provide UMI with an important European footprint for strengthening our growth potential.”
The Brewers Group acquires The Paint Shed
Meanwhile in Scotland, national decorative paint retailer The Paint Shed has been sold by its growth capital investment owner BGF to The Brewers Group, in a deal that unites the two largest independent UK paint retailers on both sides of the border. The Paint Shed has a total of 20 stores in Scotland, as well as an online retail presence and employs 87 people. It still sees potential for the addition of further Scottish stores. Brewers, which is active across both England and Wales, has 193 stores. It is a long-established family business. Following the cross-border takeover, Brewers will operate The Paint Shed as a standalone subsidiary, but together the combined operations will gain through efficiencies in distribution, broader product offerings and customer services, thereby delivering a superior customer proposition within the market.Michael Rolland, Managing Director of The Paint Shed said, “Looking ahead, the partnership with Brewers supports our view that, whether online or in-store, independent paint retailing is the future. We plan on continuing to win market share in the locations we serve and grow The Paint Shed brand wherever we think we can add value to the customer. In our experience, people prefer to shop with specialist retailers, as opposed to generalists or single brand offerings.”
Government scraps EU legislation removal deadline
Finally, Rishi Sunak's Government has announced plans to abandon the deadline for the removal of all of the EU laws retained by the UK, post-Brexit. Originally the plans had been laid to scrap a host of laws that were due to expire at the end of 2023, unless there were particular decisions that had made been made to keep them. Of particular concern is the fact that over 5000 pieces of legislation associated with chemical safety might have been scrapped in what was seen as a “bonfire” of EU laws, without proper scrutiny having taken place in order to ensure that such a dramatic removal would impact safety laws without an equivalent being drawn up; in other words, a legislative gap that might otherwise leave a serious, if not life-threatening gap, in the sphere of chemical safety in the UK.That said, the Government will still go ahead with the removal and/or replacement of 600 EU-origin laws by the end of 2023, however none of those laws is critical to the field of chemical safety. A longer list of laws remains up for scrutiny but within a more sensible time-frame. These include:
• The Planning (Hazardous Substances) Regulations 2015
• Control of Major Accident Hazards Regulations 2015
• Offshore Installations (Offshore Safety Directive) (Safety Case etc) Regulations 2015
• Offshore Installations (Prevention of Fire and Explosion, and Emergency Response) Regulations 1995
• Dangerous Substances and Explosive Atmospheres Regulations 2002
Each of these laws was originally of UK origin and then became enshrined in EU law – with adoptions and amendments – during the UK's 47-year membership of the bloc.