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Editorial

PEB Steel new factory in Vietnam, RPM's slow sales in Q2, Goodlass Nerolac Paints's investment plans

Mark Drukenbrod – Dec 29, 2005

Hello and welcome to your late week international coatings industry update from PaintandCoatings.com. We have some interesting news and technology for this issue, so let me get right to it.

Our first item comes from Vietnam, where pre-engineered steel building manufacturer PEB Steel plans to invest US$1 million in a factory to produce water-proofing paint in the second quarter of next year. The company has anticipated that demand for the membrane product will be higher in the future, general director Sami Nour Kteily said.

It has won five deals to coat 35,000 square meters of roof since it started supplying the Top Seal paint produced by United Coatings in the country in June.

RPM International this week said that earnings for its fiscal 2006 second quarter will be below the prior year as a result of the US Gulf coast hurricanes, slower sales growth and higher raw material costs. The company expects second quarter 2006 diluted earnings per share of $0.22 - $0.24 versus year-ago EPS of $0.31, both prior to charges related to asbestos liabilities.

In Malaysia, Goodlass Nerolac Paints plans to invest up to RM1.13 billion in a partnership with its parent company to capture a slice of the home paint market. GNP has formed a joint-venture company with Japan's Kansai Paints Co Ltd, which fully owns the Indian firm.

Goodlass vice-president for special projects and head of corporate communications, Ashok Saini, said that the joint-venture firm has agreed to buy the paint business of Sime Coatings Sdn Bhd. Kansai Paints also has a stake in a Malaysian automotive coating firm, Sime Kansai Paints Sdn Bhd.

Sime Coatings, formerly called PAR, was founded in 1958. It was renamed Sime Coatings in 1999, reflecting the ownership by Sime Darby Bhd. It is the largest manufacturer of automotive original equipment manufacturer coatings in Malaysia. Sime's coating division consists of Sime Coatings, Sime Kansai Paints and Wuxi PAR Resources Coatings and Chemicals Co. It has established technical tie-ups with various paint manufacturers in the world.

In the same way that the opposite sex seems to become more attractive after starting to wear a wedding ring, there is news in the Wattyl matter in Australia. Allco Equity Partners may have a battle on its hands for control of Wattyl after Barloworld, a South African group that also owns several paint brands in Australia, signaled its interest in the manufacturer. Get the details where our editorial continues. Also, we take a look at a new technology that could open coatings to new markets. The materials themselves are called metallic glasses.

Barloworld this week announced that it has appointed ANZ Bank to advise it on a takeover offer for Wattyl.

In Australia, Dulux is the leading player with 38% of the domestic market. Wattyl is the No2 player, ahead of the Barloworld's Taubmans brand.

"We are a major player in the market and there is a bid on the table for Wattyl," said Garth Smart, the managing director of Barloworld Coatings Australia. "We have to look at the alternatives." Smart then said it would be "going too far" to assume that it was considering a counter-bid.

Barloworld, which also owns the Bristol and White Knight brands, has appointed ANZ Bank to review the terms of the Allco proposal and advice on a range of alternatives.

Mr. Smart said Barloworld expected to complete its considerations in early February. But he declined to discuss what the alternatives might be, adding that he could not say more than what was in the brief statement.

Interestingly, the Australian Competition and Consumer Commission rejected an attempt to merge Wattyl with Taubmans in 1995. Doing the math shows that they would control 56% of the Australian paint market together.

What Eisenhower called the "military-industrial complex" is a hotbed of material development in the US, and a new one came to light last week. This is just a mention to get metallic glasses on your radar screen.

Dr. Daniel B. Miracle has been working on research leading to the discovery of the atomic structure of metallic glasses. His research provides a new paradigm for the structure of condensed solids, and a new approach to efficient filling of space.

The advancements, spearheaded by Dr. Miracle and the AFRL Materials and Manufacturing Directorate Metals, Ceramics and Nondestructive Evaluation Division, will enable development of stronger, high performance aerospace components. Metallic glasses are important because they can greatly reduce structural mass in aircraft and high mach air vehicles and provide more affordable access to space.

In science, glass is defined as any material that can go from liquid state to solid state without crystallizing. Most metals in liquid state crystallize as they cool, and their atoms settle into highly regular spatial patterns known as "lattices." Metallic glass forms when crystallization does not occur. Instead, the atoms settle into random or "amorphous" arrangements. Ordinary window glass, although not metallic, possesses one type of amorphous atomic arrangement.

Metallic glasses are not transparent like window glass; however, they do have remarkable mechanical and magnetic properties, such as the exceptional ability to spring back into their original shape after being acted upon by an outside force. Conventional metals, by comparison, can be bent out of shape, and stay that way indefinitely, because their crystal lattices are loaded with defects.

Metallic glasses have specific strengths twice that of compositionally similar crystalline alloys, valuable magnetic characteristics, exceptional corrosion resistance, and outstanding wear resistance. Combined, these properties make metallic glasses excellent engineering solutions for important technology applications such as low loss power transformer cores, corrosion-resistant coatings for nuclear containment, and structural hinges with infinite fatigue life for digital mirror devices.

A principle objective of Dr. Miracle's work has been to provide a fundamental understanding of the features that influence the stability of metallic glasses, so that a quantitative ability to predict and design new bulk metallic glasses is established. While topology provides a dominant influence, chemical contributions are also known to be important in the stability of metallic glasses. Thus, the topological model cannot fully explain the stability and hence, the constitution of metallic glasses to the desired level of accuracy. Efforts are underway to establish a quantitative description of the chemical influence via collaboration with scientists from Johns-Hopkins University, The Ohio State University, and the University of Sydney (Australia), and atomistic simulations are being pursued where the chemical contributions can be adjusted independently of topological (size) effects.

Researchers anticipate that a fully predictive model for new metallic glasses will emerge, once the chemical contribution to metallic glass stability is better understood.

In other news, Fuji Photo Film Co., Ltd. announced that it has concluded a contract to acquire the Avecia Group's Inkjet business, headquartered in Manchester, England, a leading global player in production and sales of dyes and inks for inkjet printers ...more about this news

Celanese Emulsions, a business of Celanese Chemicals, announced a new agent and distributor for its Celanese Mowilith and Vinamul polymer emulsions in Poland ...more about this news

Kronos Worldwide, Inc. announced a price increase for all of its titanium dioxide grades sold in North America ...more about this news

And finally, effective February 15, 2006 the business line Goldschmidt Industrial Specialties of Degussa AG will increase prices in Europe by 5 to 11 percent for specialty surfactants in industrial applications ...more about this news

Thank you for reading and using PaintandCoatings.com.

Best,
Mark Drukenbrod
editor@paintandcoatings.com

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