Economic growth, strict environmental regulations, growing investment in infrastructure, and increasing demand for green and environment-friendly additives in the European region are contributing to the paint additives market growth. Europe Paint Additives Market size is forecast to reach $3,222.2 million by 2025, after growing at a CAGR of 4.4% during the forecast period of 2020-2025.

The Europe paint additives market is growing at a significant rate as the demand for paint additives is increasing from various industries such as automotive, marine, construction, industrial, and others. Paint additives are formulations that improve the consistency, versatility, and efficiency of paints and coatings and are distinguished by characteristics such as antibacterial, antifungal, and odorless. In these industries, these paint additives are used to modify, conserve, and control surfactant agents. The Growth for waterborne paints due to their low VOC (volatile organic compounds) content in the marine industry for applications such as marine vessels, offshore supplies, yachts, and container ships is also driving the market growth during the forecast period.

Paint additives are extensively used in the paint and coatings industry as it offers functional benefits, such as avoiding priming preparation, improved paint flow and levelling, improved paint spray ability, and more. In addition, a paint additive enhances the durability, corrosion-resistance, low odor, and hygiene that are required for every unique building. According to the European Construction Sector Observatory (ECSO), the construction industry's outlook is positive, with growth projected at 3.9 percent annually for 2018-2022 and 2.6 percent for 2023-2027. Thus, with the expanding building and construction industry in Europe, the demand for paint and coatings will also increase, which will boost the paint additives market growth in Europe during the forecast period.

Furthermore, the emergence of COVID-19, which is declared a pandemic by the World Health Organization (WHO), is having a noticeable impact on regional economic growth. According to the International Monetary Fund, Europe's GDP decline by 6.7% in 2020. In Europe, the hardest-hit nations in terms of the number of infections and deaths are the UK, France, Italy, and Spain. The pandemic is affecting operations of various industries including construction, automotive, and so on as these countries have issued “stay at home guidance” i.e., lockdown. According to the European Steel Association (EUROFER), in March 2020, demand for new commercial vehicles fell by 47.3% across the EU. In June 2020, registrations of new passenger cars in the EU totaled 949,722 units, a drop of 22.3% compared to the same month last year, as measures to prevent the spread of the coronavirus lead to the closure of dealerships. It is expected that the outbreak of COVID-19 will be seen in the whole year of 2020, and a few months in 2021.  As construction and automotive are the key industry of paint additives the decline in its operation is directly affecting Europe paint additives market growth. According to Eurostat, Europe as a whole lost 3.5% of the GDP. However, various countries are looking for a recovery plan, such as the U.K government is planning to invest £11.27 billion in the construction industry as an economic recovery plan. This will further support the Europe paint additives market growth.

The Germany holds a major share of the Europe paint additives market due to the increasing construction and automotive sector in the region. The flourishing construction industry has driven the growth of paint additives in the market for paint & coating applications. In Germany the housing market is facing a strong demand fueled by rising incomes, low interest rates. According to the German Trade & Invest, the construction volume of residential buildings in Germany increased from Euro 210 Billion in 2017 to Euro 245 Billion in 2019. The construction volume of commercial buildings in Germany increased from Euro 110 Billion in 2017 to Euro 125 Billion in 2019. For the largest share of paint additives, residential buildings are responsible. The high volume of construction permits being given demonstrates the continuing appeal of the new-build market. The increasing population and rapid urbanization in the country is enhancing the demand for construction industry thereby, accelerating the growth of the paint additives market in Germany during the forecast period.

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Europe Paint Additives Market Growth Drivers:

  • Increasing Demand for Eco-Friendly Additives
The growing need for environment-friendly paints and coatings has led players in the market to invest in extensive research and development. Manufacturers are increasingly focusing on enhancing the performance of coatings. Also, manufacturers are striving to reduce costs in coating processes through proper rheological modification. Therefore, there is a lot of focus on the development of low- and zero-VOC products, which is conversely influencing the growth of the paint additives market. For instance, Elementis plc, a specialty chemicals company, offers Thixatrol, an environment-friendly coating additive. In 2018, Akzonobel Specialty Chemicals (Nouryon) and Renmatix, Inc., global leaders in plant-based technology, announced to jointly develop bio-based performance coatings to improve the properties of architectural coatings. Therefore, the increasing focus on enhancing performance, hybrid coatings as well as innovative eco-friendly products such as green coatings, nano-coatings, and so on is influencing paint additives market growth. 
  • Rising investments for infrastructure development
There has been an increase in the usage of paints and coatings in the construction sectors due to increased spending on construction activities which is having a positive impact on demand for paint additives. The additives used in the construction sector helps in enhancing surface properties, stabilizing pigment, enhancing wetting and dispersing properties, and defoaming properties, and so on. According to the Global Construction Perspectives and Oxford Economics report, the U.K is expected to become the world’s sixth-largest construction market by 2030. Over the next 15 years, U.K. needs to build 3.3 million homes to meet the needs of the growing population. According to Destatis, in 2018, German construction firms invested a total of EUR 4.7 billion (US$5.2 billion) and reached their highest level in 24 years. All sectors of the German construction industry, including buildings, infrastructure, and underground construction, recorded a significant increase in investments in 2018. According to the European Commission, the house price index in Belgium has experienced an 11.6% increase over 2010-2016, thus evidencing the recovering demand in the housing market. Belgium government is taking initiatives to support the construction of new houses in the country. For instance, a system of tax reductions on homes and mortgages, Accesspack loan scheme, and an investment fund for public housing, aiming to fund the construction of 6,000 new dwellings has been undertaken by the Government in the period 2016-2017. According to Denmark official statics, total residential constructions increased from 28,393 in 2018 to 33,232 units in 2019. In addition, Paris will host the Summer Olympic Games in 2024. It is expected that construction work related to the Games will also increase, as the government plans to spend 6.8 billion Euros to develop and refurbish the infrastructure needed to complete such a large-scale sporting event. Thus, growth in the construction sector is fuelling demand for paints and coatings, which is having a positive impact on demand for paint additives.

R&D Investment:
New technology and product innovation primarily drive the European paint additives industry. Significant R&D investments aim at developing high-performing paint additives which comply with legal requirements that are competitively priced. For several European paint additive manufacturers and their suppliers, climate change is currently setting the R&D priorities. The goal at this time is to find ways to use new and existing technology to reduce the carbon footprint throughout the life cycle of a product in its manufacturing, application, storage and disposal process. Limits in the content of volatile organic chemicals (VOC), and registration, evaluation, authorization and restriction of chemicals (REACH) have created innovation opportunities and have brought about new technological developments in the paint additives industry. The development of new product ingredients, including zero-VOC additives, multipurpose additives and auto-healing additives has contributed to these patterns. As one of the largest producers of paint additives in Germany, BASF is one of the mostly involved companies in the development of chemistry that contributes to the manufacturing, including carbon-based materials, of new materials with low carbon footprints. BASF has also been engaged in joint research and development ventures in low-carbon painting technology with other German chemical firms, typically with the aid of German government funds.

The Major Players in this Market Include
The major companies in the Europe paint additives market include Nouryon Chemicals B.V., Arkema S.A., BASF SE, Evonik Industries AG, Ashland Global Holdings Inc., The Dow Chemical Company, Elements PLC, Angus Chemical Company, Atlanta AG, and Eastman Chemical Company. The key focus of the companies has shifted towards expansion and acquisition. For instance, In January 2020, BASF announced a single-digit million-euro investment in the capacity expansion of water-based polyurethane dispersions at its Castellbisbal site in Spain. The expansion will allow BASF to increase its production capacity by 30 percent.  In August 2019, Nouryon will double capacity at its surfactants plant in Stenungsund, Sweden to support the growth of several existing products as well as new sustainable technologies for markets including oil and gas, lubricants and fuels, and asphalt. In February 2020, Evonik has successfully closed the acquisition of the US Company PeroxyChem for US$640 million after the responsible court in Washington D.C. dismissed the lawsuit filed by the Federal Trade Commission (FTC) to block the acquisition. In December 2018, Elementis, announced that through Elementis Specialties (India) Private Limited, it has entered into an agreement to acquire a production facility in Mumbai, India.

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