The Powder Coating Oligopoly
Posted on Friday, September 29, 2017
When I began my career in the powder coating
industry back in the late 1970s, there were about
20 powder coating producers in North America. Most
had non-paint producing traditions, companies like
Ferro, H.B. Fuller, Armstrong, Polymer, Celanese,
Farboil, Dexter and Mobil. Of course, there was a
smattering of true paint companies, such as SherwinWilliams,
DuPont and Glidden, the place where I
started my coatings career odyssey. Soon thereafter
Sherwin and DuPont got out of the powder business,
leaving Glidden as the only sizable paint maker in the
fold at this juncture.
By the mid-1990s, the number of North American
powder manufacturers had ballooned to nearly 70
as the demand for powder coatings flourished and
the technology evolved. Not only had all the major
paint makers secured a foothold, mainly through
acquisition, but scores of small industrial coatings
producers also set up powder making operations.
The market quickly became oversaturated and the
resultant overcapacity caused profit margins to
plummet precipitously. Companies were selling
powder coatings at record low prices, espousing a
“just keep the lights on” mentality.
Since then, the pendulum has swung back,
witnessing an unprecedented merger and acquisition
spree that leads to our current situation. My unofficial
count of powder producers currently operating in
North America is 35. This figure doesn’t account
for powder distributors, importers or resellers. If
you sort the manufacturers by size a startling trend
emerges. The top seven powder producers account for
well over 80 percent of the North American market.
Twenty years ago, this was not the case.
The consolidation that has occurred since the
mid-1990s has been spellbinding. AkzoNobel bought
Courtaulds (International Paint), Ferro (who had
bought Glidden/ICI) and Dow (Rohm & Haas/
Morton). PPG acquired Evtech, Spraylat and IVC.
Axalta (formerly DuPont) bought Herberts (who had
gobbled up Dexter and O’Brien). And throughout all
of this, Protech has quietly acquired at least 20 smallto
medium-size powder companies, including Seibert,
Govesan and Oxyplast. And finally, Sherwin-Williams
has purchased Pratt & Lambert, Beckers and now
Valspar (who had bought Lilly, Farboil and HB Fuller).
SW’s acquisition of Valspar further consolidated the
grip the few behemoths have on the market.
Dictionary.com describes an “oligopoly” as “the
market condition that exists when there are a few
sellers, as a result of which they can greatly influence
price and other market factors.” Investors will trumpet
the benefits that consolidation bring, including higher
productivity, stronger purchasing power, increased
pricing control and distribution efficiency, which all
lead to a better return on investment.
To the consumer and employee, the benefits
may be harder to discern. In Barry Lynn’s 2011
book, “Cornered,” he carefully detailed the rising
concentration and consolidation of nearly every
American industry since the 1980s. He found
that dominance by two or three firms “is not the
exception in the United States, but increasingly the
rule.” The powder coating industry is not quite there
yet, but if PPG had been successful in their quest
to wrestle AkzoNobel from their shareholders, the
North American powder market would have only six
mega producers at the top. This includes 3M, which
arguably doesn’t participate in the same arena as the
other ones do.
The salient question regarding an oligopoly is
whether the concentration of market share by a few
causes an anti-competitive environment resulting in
parallel activities in pricing, terms, and availability
of products. We haven’t seen any evidence of this
thus far. The future of the North American powder
industry should be interesting nevertheless. Big
companies can become cumbersome and lethargic,
creating a culture that cannot innovate or respond
quickly to market needs. This could provide
opportunities to the nimbler small- to medium-size
powder producers. Conversely, the big guys may keep
absorbing their smaller counterparts and our industry
could ultimately wind up like the cable companies.
We wouldn’t like that, now would we?
Kevin Biller is technical editor of Powder Coated
Tough and the president of The Powder Coating
Research Group. He can be reached at