Rácz, Yamaga 
& Associates

Francisco Z. Rácz & Washington T. Yamaga (R Y & Associates) - Paint & Pintura March 2020

On one hand there is a mismatch of chemical industry in emerging countries, in relation to other more advanced markets in the world. On the other, there is the opportunity to modify the use and manufacture of paints through advanced digital resources. Today we are focused on manufacturing excellence, customer experience and obsession to sell paint to new markets. The digital transformation in emerging countries can happen before many industries are expecting. The high-productivity digital integrated modules for clears, catalysts and colors are already being designed and produced in Brazil and exported to developed countries.

Francisco Z. Rácz, Washington T. Yamaga (R Y & Associates) for Paint & Pintura December 2019

The combination of Interest Rate, Inflation, Exchange Rate and GDP for the coming years, may impact the coatings industry very differently from the historical evolution.

Planning 2020 already points to opportunities for technological transformation and new business models unprecedented in Brazil coatings industry.

The Brazilian market in 2025 is expected to be over $ 6 Billion. The 80% of new paint and coating opportunities will be in the building elements, transportation, automotive and anti-corrosion segments.

Francisco Z. Rácz, Washington T. Yamaga - (R Y & Associates) for Paint & Pintura November 2019

Rácz, Yamaga & Associates will be at the next China Coat 2019 (November 18-19-20) and invited by its organization to develop the theme BRAZILIAN COATINGS MARKET - TRENDS & OPPORTUNITIES. The presentation discusses the impact of recent changes in political economic environment and its impact in the paint industry. It analyzes the competitive relationship between global, regional and local multinational companies, technology opportunities and supply chain modifications in South America, particularly in Brazil with market projections over $ 10 Billion by 2030.

Francisco Rácz & Washington Yamaga - Rácz, Yamaga & Associates para Paint & Pintura October 2019

The stage for South American coatings market is occupied by thousands of suppliers. This may sound daunting, but it is natural for a mature, sub-segmented market such as coatings: low risk and reasonable return on investment. Given the complexity of technology, distribution and segmentation, it is also natural that less than a hundred suppliers occupy almost 90% of the market, which in 2018 consumed $ 8.1 billion inks for a volume of 3.1 billion liters.

Francisco Z. Rácz & Washington T. Yamaga (R Y & ASSOCIATES) – Paint & Pintura September 2019

The prospects for South America Coatings are promising. The market will growth from $ 8.1 BL in 2018 to above $ 20 BL in 2030 in all countries.

The global coatings industry is impacted by mega drivers such as mobility, health and environmental protection, digital productivity changes and other trends. South America is not excluded from this process and from access to global opportunities, mainly due to the scale of value added in this market.

Francisco Rácz & Washington Yamaga (RY & Associates) for China Coat Journal – September 2019

Coatings market in South America was estimated to be at US$ 8.1 billions in 2018. It should reach a level close to US$ 12 billions in 2023 and over US$ 20 billions in 2030, with good and continuous growth rates in all countries. The South American region over the next 3 to 5 years is certainly not going to be at the forefront of disruptive paint technologies but certainly will be rapidly capturing opportunities to put them into new action. Most countries will see a continuity of higher growth rates in view of their overall stability, strong emerging middle class and infrastructure investments.

Paint and coatings are defined as mature market and depend on the evolution of substrates that will be painted. In emerging markets, innovation did not focus on disruptive events generation that could create new markets. The companies considered to be successful in these regions have been distinguished by the ability to understand Innovation much more as the art of putting the new in action with agility and high productivity impact.

EUROPEAN COATINGS April 2019

The article based on information provided by Franzisco Z. Rácz and Washington T. Yamaga of Rácz, Yamaga & Associates (www.ry-associates.com)

The paint market in Brazil has gone through a few difficult years, but seems to have bottomed out and has recently been developing slightly positively again. Sales are being driven above all by the growing middle class. Experts are forecasting annual growth of around 3.4% for the coming years. A market volume of over 2 billion litres is to be achieved by 2023.

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Planning for structural growth in the Brazilian coatings market

By Francisco Rácz & Washington Yamaga, Rácz, Yamaga & Associates

EUROPEAN COATINGS SHOW DAILY 3/ 21 MARCH 2019

Coatings are known for its wide spectrum of applications and as such, their consumption is driven by several factors related to the markets where they are utilized. Brazil is moving out of a deep recession and the years of 2017/2018 marked a halt in the depression. The 2019 is the beginning of a new cycle.

Francisco Racz & Washington Yamaga (RY & Associates) – Paint & Pintura July 2019

An accelerated process to convert the concepts of paints by their performance and function, is already a strategic focus for the leading brands in Brazil.

The architectural coatings in the past ten years had their average price decreasing 10% in dollars. There was a loss of margins for not recomposing costs and an involution of product mix. The lower value coatings grew while more functional defined coatings lost their share. The premium wall paints fell by 31% in volume between 2009 and 2018 while the other paints grew 33% in a market that practically did not grow during the same period. The end user consumed more paints with lower durability and inferior application yield, despite numerous new products launching in the period.

FRANCISCO RÁCZ & WASHINGTON YAMAGA (RÁCZ, YAMAGA & ASSOCIATES) – Paint & Pintura May 2019

There is a certain degree of uncomfortable optimism within coatings industry and its supply chain, indicating that market recovery would be slow and incompatible with the need to recover the lost 10 years in 5 years. This was the attention focus for industry's CEO panels during recent Paint & Pintura Forums in Recife and Joinville.

It is time to accelerate a technological agenda and regulatory agenda to protect value creation. We must begin now if we do not want lose competitiveness and become an outdated industry.

Francisco Racz & Washington Yamaga (RY & Associates) - Paint & Pintura June 2019

The 2019 first semester closing brings to the paint market a small volume of recovery over the first half of 2018, but far from expectations for 2019.

Coatings drivers continue anchored in the middle-class consumption and infrastructure initiatives. The expected reaction for the year 2019 has not yet occurred, basically due to the volume of architectural coatings, which are directly linked to the middle-class consumption and investments. Performance coatings performed better mainly due to industrial and automotive coatings.

Francisco Racz & Washington Yamaga (RY & Associates) – Paint & Pintura April 2019

The coatings industry has enjoyed a remarkable period of innovation in recent decades. Some of the major drivers were the conversion of solvent based paint to water based, VOC reduction, the improved film functionalities, popularization of tinting systems among many. The digital processing and measurements as well as nanometric formulations and the use of materials from renewable sources dictate the new trend. The understanding of customer journey and the impact on purchase decision are now the focus of value generation.

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Francisco Rácz & Washington Yamaga (RY & Associates) for Paint & Pintura March 2019..

Axalta CEO Charles Shaver's recent statement during the Coatings Summit in Paris in February 2019 can be interpreted as reinforcing many of the industry's reflections in regions such as South America:

"Coatings industry has a strong financial position and is well positioned to continue the activities of mergers and acquisitions."

Our articles and lectures have addressed these issues within the context of South America, anticipating regional responses to global statements.

Francisco Rácz & Washington Yamaga (RY & Associates) - Paint & Pintura January 2019

A good number of companies will carry out some type of investment in 2019. Two concentrations of initiatives are noteworthy. The first is the concern of companies to regain the workforce capacitation, accelerating training and qualification programs. The second focus is productivity demand and innovation-focused technologies. 60% of the industry will launch new product and services.

Coatings companies Brazil shared the same concern, and those who have prepared in difficult times will step forward in domestic market positioning as well global export markets as they achieved quality and competitiveness becoming globally competent.

Francisco Rácz & Washington Yamaga (RY & Associates) – Paint & Pintura December 2018

Considering the moment of urgency and importance, the perceptions and reactions with the short-term repositions are optimistic. The coatings market in Brazil finishes another year with growth but expects a short term a full recovery with the return of structural investments.

For all segments, the new volume levels for the resumption will require not only the response to the demand with capacity utilization, but also a review in the productivity patterns.

Francisco Rácz & Washington Yamaga (RY & Associates) - Paint & Pintura September 2018

Considering the evolution of the middle class in a conservative growth of the economy, the market of architectural coatings in Brazil should reach a volume close to 1.9 billion liters in 2030, with an average growth rate of 3% aa. from 2017 to 2030. Sales in this market will exceed US $ 5.0 BL in 2030, with average growth of around 6% aa in the same period (Diagnosis of Architectural Coatings market in Brazil August 2018 – Paint & Pintura).

Francisco Rácz & Washington Yamaga (RY & Associates) for Paint & Pintura 2018

The volume projections for Brazil coatings industry planning cycle have always referred to macroeconomic factors projections such as the GDP. However, 2018 volatility and the decreasing volume expectation, take the industry into urgency. The projections for 2019 already clearly indicate the need for business above the projected population growth and certainly with significant productivity gains.

Francisco Rácz & Washington Yamaga (RY & Associates) – Paint & Pintura May 2018

The Automotive Refinish Coatings market in Brazil has been increasing in the last decades and should continue for the coming years. It follows the growth of the Brazilian vehicle fleet from 34 million units (motorcycles not included) in 2009 surpassing 52 MM in 2017  is expected to approach 65 MM in 2022/23 despite the economy oscillations.

Francisco Rácz & Washington Yamaga (RY & Associates) - Paint & Pintura June 2018

Decorative Coatings, a market of US $ 2.8 Billion, almost 60% of the Brazilian paint market, has projected an average growth in sales volumes of 3.5% per year for the next five years.

Exhausting the repertoire of organic cost reduction, productivity gains have proved insufficient to prioritize growth strategies and sustain margin margins. The industry has reacted to the needs with clear repositioning in response to the new business demand.

Francisco Rácz & Washington Yamaga (RY & Associates) – Paint & Pintura July 2018

There are three areas within coatings innovation and digitization which are already highlighted with investments and structural changes: Sales, Marketing and Research & Development. The changes in priorities are on customers' values and purpose interaction and  time to market reduction.

Francisco Rácz & Washington Yamaga (RY & Associates) American Coatings Show Daily3 – April 2018

The year of 2017 represented a turning point for the Brazil coatings market development. After several years of recession, the reduction of unemployment and the reaction of consumer reflected as an interruption of continuous fall of the decorative coatings market and other materials related to the home improvement, maintenance and even some new constructions.

Francisco Rácz & Washington Yamaga (R & Y & Associates) - Paint & Painting April 2018

The annual volume growth in the period will show rates of 3.4% to 12% in the period 2017-2022. The revenues of paint industry in these segments reached about US $ 1.9 billion in 2017 and may go beyond 3, 1 B US $ in 2022, representing 44% of the total paint market in Brazil.

Francisco Rácz & Washington Yamaga (RY & Associates) - Paint & Pintura March 2018

More than the expectation of a political threshold for the resumption of growth industries must decide on their competitiveness.

The South American automotive refinishing market remains attractive

The strong need for mobility in a continent with huge distances for a growing middle class is the major driving force for this market. South American countries will continue to show a growth in their car park. Regardless hiccups in several countries’ economies the need for mobility drives the growth of the fleet back to their long-range projections. Response came from automakers’ globalization strategy through flexible value onboard platform adaptable to any part of world. Color and repair services are part of this challenge as it is related to auto protection and glamour.

Rácz, Yamaga & Associates

Racz, Yamaga & Associates present in the 2017 European Coatings Journal Dossier – Automotive Coatings, a selection of best technical paper published within past 3 years by ECJ.