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FTC Approves Sherwin-Williams’ Acquisition of Valspar, DKSH Starts Paints & Inks Innovation Center, Fraunhofer Researchers Find Way for Coating Silicon Spheres

SpecialChem / Mark Drukenbrod – Aug 10, 2017

Hello and welcome to your late week international coatings industry update, brought to you by SpecialChem. In industry news since last issue, Sun Chemical has named Veritiv as a distribution partner and IMCD will acquire 100% of L.V. Lomas. Ferro has acquired Dip-Tech and researchers have developed SelfPaint technology that enables the automated painting of small batches and even single pieces. There’s much more where we continue and as always, you can go to the above items now using the links, or checkout our latest stories, which we’ll get to right away…

FTC Gives Nod to Sherwin-Williams' Acquisition of Valspar 

The Federal Trade Commission has approved a final order resolving concerns that the acquisition of the Valspar Corporation by The Sherwin-Williams Company would likely allow the new company to exercise unilateral market power in the North American market for industrial wood coatings, following a public comment period. As announced in May 2017, the order requires Sherwin-Williams to divest two Valspar industrial wood coatings plants – one in High Point, North Carolina and the other in Cornwall, Ontario – to Axalta Coating Systems Ltd. Axalta will also acquire certain Valspar research and development facilities, warehouses and testing facilities, as well as customer contracts, intellectual property, inventory, accounts receivable, government licenses and permits and business records. The Commission vote approving the final order was 2-0.

DKSH Starts Innovation Center for Development of Paints & Inks

DKSH’s Business Unit Performance Materials has opened an innovation center in Canlubang Laguna to focus on the development of new concepts, high-performance products, formulations and technologies for the paints, inks and construction industries. The fully-equipped, state-of-the-art innovation center will enable DKSH’s highly qualified technologists to provide market and stability testing, product demonstration, product and cost improvement, trouble-shooting and hands-on technical training. The new facility joins a total of seven DKSH innovation centers worldwide, dedicated to the specialty chemicals industry. In line with DKSH’s commitment to quality assurance and compliance, the new facilities are fully controlled and adhere to the strictest international standards, including SHE (safety, health and environmental) compliance.

Fraunhofer Researchers Find Way for Coating Silicon Spheres Evenly

The prototype kilogram to which all scales are calibrated to is losing weight. International efforts are striving to redefine the base unit for measuring mass and, in future, redefine the kilogram on natural constants. For this purpose, the Avogadro experiment determines the number of atoms in almost perfect silicon spheres. Fraunhofer researchers have recently succeeded in homogeneously coating the spherical surfaces the measurement uncertainty can be limited to a range below 10 micrograms. The silicon sphere to be coated must be handled like a raw egg. Due to the fact that the prototype kilogram the unit of mass upon which the weight of a kilo is based, is becoming increasingly lighter. The reason for this, however, is unknown. Now researchers are seeking alternatives for the platinum-iridium alloy artefact that is stored in a safe in Paris. The basic plan is to redefine the kilogram. In future, a physical constant will replace the material kilogram.

Ferro Acquires Dip-Tech

Ferro Corporation announced that it has acquired Dip Tech Ltd. (“Dip-Tech”), a leading provider of digital printing solutions for glass coatings. Ferro paid $60.0 million, excluding customary adjustments and fees for Dip-Tech, which is a privately held company headquartered in Kfar Saba, Israel. The Company expects the transaction to be accretive to earnings in 2018 based on year-one synergy-adjusted EBITDA, which is forecasted to be in a range of $6 million to $7 million. Ferro expects a Return on Invested Capital of more than 15% within the first five years of the acquisition. The transaction was funded through excess cash and borrowings under Ferro’s existing revolving credit facility.

Peter Thomas, Chairman, President and CEO of Ferro Corporation, said, “This acquisition aligns very well with Ferro’s next phase of our value creation strategy: Dynamic Innovation and Optimization. It equips us with a fully commercialized and patent-protected digital glass printing business that generates gross margins at the high end of our Performance Colors & Glass portfolio. Dip-Tech’s digital glass printing technology is attracting customers because of the high-precision, multicolored effects possible with durable glass-based inks, along with greater production flexibility and efficiency.”

Mr. Thomas added, “Dip-Tech’s printing solutions and glass coatings carry patent protection in all of its major markets. Their technology know-how, along with their patent portfolio, is unmatched in the industry. Our acquisition of Dip-Tech is a clear demonstration of the culture of innovation that we are developing at Ferro. We are pleased to welcome the Dip-Tech team to Ferro and look forward to leading the way in digital glass technology together.”

Ferro’s strong commercial presence in the global appliance, architectural and automotive glass markets provides opportunities for introducing Dip-Tech’s digital technology and for expanding sales. Ferro believes that its strength in developing inks and related raw materials, together with Dip-Tech’s technology, IP and established global success, provide numerous operating and commercial synergies.

Dip-Tech is a pioneer in digital glass printing and is the leading supplier of digital glass printers, software and digital inks for the flat glass market. It complements its technology with complete global technical, graphic, marketing, and business support. With a strong history of business with the world’s top glass designers and processors, and over 200 global equipment installations, Dip-Tech’s digital glass printers are used to produce millions of square meters of printed glass every year.

Dip-Tech’s digital printing solutions are marketed and supported through a network of direct marketing channels in Europe, the United States, and the Asia-Pacific region, ensuring local processors rapid response times and quality business development support. An innovation leader in digital glass printing, Dip-Tech's products are powered by a concentrated R&D program, the ongoing development of ink nanotechnology and new printing technologies, and patent protection across its portfolio.

IMCD to Acquire L.V. Lomas

IMCD N.V. last week announced that it will acquire 100% of the Canadian and US specialty chemicals and ingredients distributor L.V. Lomas. L.V. Lomas is an excellent fit with the IMCD business model and immediately provides IMCD with a significant presence in Canada and a further enhanced position in the US.

Established in 1960 and with activities at six locations in Canada and the US, including offices in Toronto (Head Office), Montreal and Vancouver, L.V. Lomas is one of North Americas leading distributors of specialty chemicals, ingredients and raw materials and is distinguished by its experienced and qualified professionals that provide its customers with advanced technical support and market intelligence. In 2016, the acquired business of L.V. Lomas generated revenue of C$383 million and realized a normalized EBITDA of C$18 million with approximately 280 employees.

Piet van der Slikke, CEO of IMCD, commented: “This is an important step in the further development of IMCD’s North America region as it not only expands our geographical presence into Canada in all core markets but also further strengthens our US organization and coverage.”

Rand A. Lomas, Chairman of L.V. Lomas added “IMCD will enhance our ability to provide our customers with a more extensive specialty product portfolio and will further develop our depth of technical expertise and innovation. My family built L.V. Lomas over several decades into an organization driven by teamwork, innovation and a dedication to excellence in all that we do. This is a vision closely shared by IMCD and together we will become a market leader in North America for the sales, marketing and distribution of specialty chemicals and food and pharmaceutical ingredients”

The acquisition will be paid from available cash and existing bank facilities.

The closing of the transaction is subject to customary regulatory review and is expected at the end of August 2017.

FTC Extends Public Comment Period On Zero-VOC Paint Claims Cases

The Federal Trade Commission is extending the public comment period on four recently announced proposed settlements with companies that allegedly deceptively promoted paint products as emission-free or containing zero volatile organic compounds (VOCs), including during and immediately after application.

According to the Commission’s complaints, announced on July 11, 2017, some promotions also made safety claims regarding the effects on babies, children, pregnant women, and other sensitive populations. However, the FTC alleged, the companies had no evidence to support these claims, and each company agreed to settle the charges against them.

The public comment period on the proposed settlements was originally set to close on August 10, 2017. After considering a request by an external party, the Commission has now extended the public comment period for 30 days, through September 11, 2017.

Interested parties can submit comments electronically on one or more of the proposed orders, including: Benjamin Moore & Co., Inc; Imperial Paints, LLC; ICP Construction Inc.; and YOLO Colorhouse, LLC.

The Commission vote authorizing the extension of the public comment period was 2-0.

Axalta Hosts Annual Latin American Distributors Convention 2017

Axalta Coating Systems held its Annual Latin America Distributors Convention in Los Cabos, Baja California Sur, with the presence of Charlie Shaver, Axalta Chairman and CEO, members of global and regional leadership teams as well as over 500 distributors, business partners, customers and colleagues from the region. The agenda included workshops that focused on business strategies to improve customer productivity and presentations on new products, technologies, and other commercial resources for customers.

Shaver reviewed Axalta’s latest achievements in Latin America, as well as the company’s global results, challenges, and opportunities. He highlighted the importance of the region’s contribution to Axalta’s growth, and the company’s commitment to continued investment and expansion in Latin America.

"Our operations in Mexico and across Latin America continue to position us well across the region. Our recent plant opening in Argentina and expanded production capacity in Mexico and Brazil provide a competitive advantage. We are especially grateful to our business partners in the region, including the distributors and customers at this important meeting, and look forward to serving them with innovative coating technologies in the years to come," said Shaver.

Axalta has operated successfully in Latin America for more than 75 years and the convention coincided with the company’s 65th anniversary in Mexico. Axalta supports growth of regional businesses through its mobile training programs for local refinish painters and technicians. Customers can receive training onsite at their body shops using Axalta’s leading refinish brands Cromax® and Standox®, among other brands.

"Our regional success has a lot to do with the focus we have on our customers and the training of master painters and workshops,” explained Daniel Salcido, President of Axalta – Latin America North and Vice President of Refinish for Latin America. “We are constantly implementing training programs and other initiatives that help us provide the best service and we continue to innovate for the benefit of our customers in Latin America."

“This year’s convention was a great opportunity to leverage our talent pool and experience across the entire hemisphere and better serve the increasingly globalized nature of our customer base,” explained Mike Carr, President of Axalta’s Americas Region. The company recently merged the management of previously separate North America and Latin America regions.

Dürr Introduces New Auto Coating Curing System

EcoInCure is a new body drying process developed by Dürr which heats and cools bodies from the inside. The technology meets all the requirements for future drying tasks connected to electromobility and new materials. The transverse mode of operation is the first of its kind and the key factor for a compact system design. The new heating concept also reduces power consumption by 25%.

The conduction of the air flow with EcoInCure is the key to the best possible top coat appearance and maximum process reliability.. Nozzles with long throw distances are aimed into the inside of the body through the opening for the windshield and heat it up from the inside out. This guarantees extremely even heating and cooling conditions for the entire body. Thermal component stresses are reduced, and the heating times for the body are reduced by up to 30%.

This new body drying method offers a particular advantage for the increasing number of electric vehicles. Among other things, these need well-reinforced rocker panels to protect the batteries in the event of a side impact. The EcoInCure principle, where bodies are heated from the inside, works especially well when drying these rocker panels with their increased material thickness. The same goes for future vehicle generations with new materials and material combinations in conjunction with new joining methods. Here, specifically, the reduced thermal component stresses achieved by the new drying method ensure increased process reliability.

On the outer skin EcoInCure allows for minimal flow velocities, which greatly improves the appearance and distribution of the top coat. EcoInCure enables efficient drying of different body types since the temperature and volumetric flows can be adapted individually.Custom heating and cooling processes can be defined for each body. This is made possible by the cyclic mode of operation of EcoInCure and the option to assign a separate unit to each module.

A new feature in EcoInCure is the heating concept based around a central heat exchanger. Instead of the local heat exchangers in the circulating air units, centrally heated circulating air heating gas is fed to each zone. This type of air circulaton is highly variable and more precise, reduces the pressure losses, and accordingly the total electrical energy requirement of EcoInCure by 25%.

The new system design, with bodies passing through transversely, permits an extremely space-saving layout: it halves the dryer length of EcoInCure compared with conventional dryers. In addition, integration of the recirculating air units on the same level means that less steel structure is needed. As a result, body drying in new paint shops as well as modifications in existing paint shops is much more space-efficient and thus also more variable with respect to capacity reserves.

Each body gets an individual, software-supported quality certificate for the entire drying process. It accurately tracks the drying conditions both during drying of the paint as well as during bake-hardening of the steel and aluminum for the purpose of crash safety. The data is acquired and evaluated using the software solution iTAC.IoT.Suite (previously EcoEMOS). iTAC.IoT.Suite, the new generation of production control systems from Dürr, permits continuous digital tracking of the drying conditions for each body.

TOA Paint Plans IPO, Stock Listing

TOA Paint (Thailand) Plc, a manufacturer of paint and coating products, has applied to list on the Stock Exchange of Thailand to raise funds for its domestic and Asean expansion.

The proceeds from the initial public offering (IPO) will be used to expand its businesses in Thailand and overseas and as working capital

CEO Jatuphat Tangkaravakoon said in a statement on Monday TOA was building on its experience of five decades, strong brands and research and development.

“We have the vision to be a leader in the paint and coating market in Asean. We also believe that we will benefit from the Asean Economic Community”, he said.

TOA has 114 brands of decorative paint and coating products, which made up 70% of its sales in the first quarter of this year. It also has 88 brands of non-decorative paint and coating products, which made up 26.3% of sales in the same period.

The company has eight plants in six countries -- three in Thailand and one each in Vietnam, Laos, Malaysia, Myanmar and Cambodia. Another three are being built in Indonesia, Cambodia and Myanmar.

Its registered capital is 2 billion baht, divided into 2 billion shares at one-baht par.

TOA is seeking to offer up to 507.6 million shares, or 25% of its paid-up ordinary shares after the offering. Of the shares to be sold in the IPO, 254 million will be new shares and 253.6 million are owned by existing shareholder Wybrant Holding Ltd.

Tikkurila and Evonik Post Half-year Financials

Tikkurila published its half year financial report for January to June 2017. While revenues were stable, sales volumes were lower than anticipated. To boost profitability, Tikkurila has initiated an extensive savings program.

Revenue for the second quarter totaled EUR183.2 million. Adjusted operating profit was EUR20.0 .Operating profit (EBIT) was EUR20.0 (27.6) million, i.e. 10.9 (15.4) percent of revenue.

Erkki Järvinen, President and CEO commented, "The operating profit for the second quarter came well short of our expectations. Our sales volumes were lower than anticipated due to poor weather conditions, as well as the problems with the availability of raw materials and the new ERP system in Sweden and Finland. Higher raw material prices, the introduction of the new ERP system, and investments in sales promotion also significantly increased costs.

“We have initiated an extensive program to boost profitability. The program is aimed at generating at least EUR30 million in savings. As part of this program, a study on our future production network has been started. We will also continue the previously launched organisational and structural transformation, which is aimed at clarifying decision-making and responsibilities and eliminating overlaps. Improved cost competitiveness will support Tikkurila in seeking new growth opportunities."

Among Tikkurila's key markets in Sweden and Poland, the fairly strong economic growth is expected to continue in 2017. The economies of Finland and Russia are also anticipated to grow slightly. Demand for paint is predicted to moderately increase in Tikkurila's operational area during the current year. The importance of the professional segment is growing, which affects the sales structure of the Tikkurila Group.

That being said, Tikkurila expects its revenue to remain at last year's level.

Meanwhile at Evonik, the company grew sales to EUR7.3 billion in the first six months of 2017. Three factors have contributed to this rise of 15 percent compared with the first half of 2016.

The increase was partly due to the first-time consolidation of the specialty additives business of the US company Air Products. Evonik acquired this business in January. Other reasons for the increase in sales were the significant rise in demand and slightly higher selling prices.

"Our business development is on target," said Christian Kullmann, Chairman of the Executive Board. "Moreover, we are reaping the first benefits of the biggest acquisition in our history." Adjusted EBITDA rose 8 percent to EUR1.25 billion in the first six months, driven principally by better results in the Resource Efficiency and Performance Materials segments. Earnings in the Nutrition & Care segment were lower than in the prior-year period, mainly because of lower prices for feed additives.

Net income slipped 3 percent to EUR394 million, principally as a result of one-time expenses in connection with the acquisition of the Air Products specialty additives business. Integration of these units, which were acquired at the start of the year, is proceeding smoothly and successfully. Initial synergies were leveraged in the second quarter. Good progress is also being made with the acquisition of the silica business of US company, J.M. Huber. Evonik expects to close this transaction as planned in the second half of 2017.

Evonik confirmed its forecast to increase both sales and operating profit for the full year 2017. Adjusted EBITDA is still expected to grow to between EUR2.2 billion and EUR2.4 billion (2016: EUR2.165 billion).

Powder Coating Research Group Moves into New Facility

The Powder Coating Research Group has relocated to a new facility in Columbus, Ohio, USA. PCR Group, an independent research and development company, recently moved to 1823 O’Brien Rd. on Columbus’ west side. The new facility boasts a 3000 square foot operation including an expanded processing area, two isolated spray rooms, a comprehensive testing lab and conference room.

“Our new location gives us greater processing and evaluation capabilities,” said senior testing manager, Nick Page. “In addition, this modern facility offers greater convenience and amenities compared to our former downtown location.” The PCR Group will host the 2017 PC Summit in October at the Columbus Westin and in their new lab.

The Powder Coating Research Group is the world’s only independent powder laboratory providing the invaluable combination of expert consultation, research & development and coating evaluation services. They provide formulation assistance and powder sample preparation using state-of-the-art processing equipment that is scalable to production machinery.

Since 2007 the organization has been working with entrepreneurs to Fortune 50 companies to develop technology to surpass conventional finishing materials and methods. PCR Group is a platinum member of The Powder Coating Institute and a founding member of The Center for Bioplastics and Bio-composites (CB2).

Sun Chemical Selects New Distribution Partner for Solvent Inkjet Inks

Sun Chemical has named Veritiv as a distribution partner of its Streamline solvent inkjet inks for wide format and super wide format printers.

The new distributor partnership allows Sun Chemical and Veritiv to reach their North American inks customers faster and more efficiently and jointly provide customers with technical and product support. Veritiv customers will now have access to Sun Chemical’s full range of Streamline inkjet eco solvent inks for Mutoh and Roland printers, as well as super wide format inks for three- and five-meter solvent printers.

“We are excited that Veritiv has added Sun Chemical’s line of digital Streamline inks to its distribution list,” said Lynn Worley, Sales Development Manager at Sun Chemical. “Veritiv is a leader in providing wide format solutions to their customers and we are pleased to have our products in their portfolio.”

“As we continue to expand into new wide format markets, one of our goals is provide our customers with the leading products, selections and solutions available,” said Scott Dickerson, Product Manager – Wide Format for Veritiv.

“We are pleased to be able to offer Sun Chemical’s product line which is supported and developed through industry leading research and technical expertise.

Japan's DIC Goes Solar at Ibaraki Factory

Japanese organic pigments and synthetic resins firm DIC said Monday it is going to develop a 1.6-MW photovoltaic (PV) project in Kamisu city, Ibaraki prefecture.

The system is to supply power to the company's Kashima factory. It is expected to generate 1,700 MWh per year and reduce the facility's carbon dioxide (CO2) emission by 3% from 2016 levels, the firm said.

Construction is scheduled to start sometime this month and be completed by January 2018.

The Kashima factory has already cut its annual CO2 emissions by 25,600 with other clean energy projects, such as cogeneration and biomass boilers.

From last fiscal year, DIC has set its own medium-term goal of reducing greenhouse gas emissions by 1% annually. Overall, the company expects to reduce its emissions by 7% before 2020, it noted.

Huntsman Announces that Venator Closes its IPO

Huntsman Corporation on August 8th announced its subsidiary, Venator Materials PLC ("Venator"), a global chemical company dedicated to the development and manufacture of titanium dioxide ("TiO2") pigments and performance additives, today completed its initial public offering ("IPO") of 26,105,000 ordinary shares, which includes 3,405,000 ordinary shares issued upon the exercise in full by the underwriters of their option to purchase additional ordinary shares. Venator's ordinary shares trade on the New York Stock Exchange under the ticker symbol "VNTR."

Huntsman intends to use approximately $725 million of net proceeds from the Venator debt distribution and the net IPO proceeds of about $475 million, excluding anticipated taxes, to pay down existing Company debt. The significant reduction of $1.2 billion in debt will put Huntsman's trailing twelve month pro-forma leverage (net-debt-to-EBITDA) around 2.5 times. In addition, Huntsman's annual cash interest expense is expected to decrease by about $45 million. Since January 2016, and including the Venator proceeds, Huntsman has repaid over $2 billion of debt.

Peter Huntsman, our President and CEO commented: "This IPO marks a significant milestone for Huntsman Corporation and creates substantial value for our shareholders. I want to thank the employees who worked relentlessly over the last several months to turn our Pigments and Additives division into Venator, a new standalone publicly traded company which I believe is well positioned for the future.

"Huntsman shareholders will benefit from the $1.2 billion reduction of debt and we will look to pay down additional debt as we monetize our remaining position in Venator over time and in an orderly fashion. The completion of this IPO and our increased financial strength positions us well as we work towards completing our merger of equals with Clariant."

Pröll KG to Highlight Inks, Coatings at Fakuma 2017

Pröll KG will highlight its inks and coatings at Fakuma 2017, which will be held Oct. 17-21 in Friedrichshafen, Germany.

Pröll KG’s core businesses are custom-made chemical products for coating/decorating plastics and other materials, innovative ink systems for IMD/FIM technology, and screen and pad printing inks.

Among the product that will be highlighted are Norilux DC, a formable, abrasion resistant Dual-Cure screen printing lacquer. Norilux DC can be used as protective lacquer or hard coat on PC, PMMA, ABS and PP films.

Norilux DC is suited for first surface coating/protection of products manufactured in IMD/FIM technology. The glossy version of the Dual-Cure lacquer can be printed on textured film surfaces to produce abrasion resistant and transparent display windows.

The matt version of Norilux DC can be printed on uncured transparent hard coat films such as Makrofol HF 278 or 312 to create matt and high gloss effects in one item. Besides the high glossy Norilux DC lacquer, various satin gloss, textured and matt grades as well as pigmented and UV-stabilized versions are available.

Tactile surface structures e.g. brush effects and 3D patterns can be printed with the highly resistant lacquer. The Dual-Cure screen printing lacquer can be used for overprinting silicone-free UV, solvent and water-based screen printing inks as well. Norilux DC dries by evaporation of the solvents in jet dryers. Films decorated with Norilux DC can be 3D formed after box oven drying e.g. by high pressure forming or thermo forming. Afterwards, the formed films must be UV cured.

The cured lacquer layer shows excellent resistances to abrasion, chemicals and cleaning agents and passes various creme tests of the automobile industry. In automotive interior, center stacks, touch panels and decorative trims are first surface protected with Norilux DC. Second surface decoration is printed with the IMD/FIM ink system NORIPHAN HTR N.

In other news, a recent report from Marketsandmarkets, the acrylate market was valued at USD 6.86 Billion in 2016 and is projected to reach USD 9.88 Billion by 2022. Growing demand for acrylate in paints &...more about this

Using the theme “Brighter Ideas for Labels,” Sun Chemical will showcase a wide range of innovative ink and coating solutions for the narrow web, tag and label market during Label Latinoamerica 2017...more about this

Transparency Market Research has published report on the global printing inks market which is expected to be valued at more than US$20 bn by 2020. One of the prime drivers for the global printing...more about this

And finally, Praj Industries Ltd and Gevo, Inc. have unveiled a new commercial opportunity in renewable bioproducts, jointly announcing that Gevo’s proprietary isobutanol technology will now be available for...more about this


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