The Organic Pigments Landscape: Challenges for Producers Like Clariant and BASF

Apr 30, 2019

The pigments industry is seeing another brush of restructuring---Clariant and BASF have both announced that they are divesting their pigments businesses this year. When thinking about the best strategic course for a buyer of either business, a look at the challenges posed from the wider industry landscape is critical. Key questions are whether EBITDA margins are sustainable and how much can they be improved.

Overall the organic pigment industry consists of a handful of large multi-national companies (e.g., Clariant and BASF) with revenues >$1 billion and which offer a wide portfolio of colours for various applications.  The next tier of producers comprises the medium sized players (of around $100-$500 million in revenue) e.g., Heubach in Germany, Union Colours, Lily Group in China and Sudarshan in India. The medium-sized Asian players typically have “me-too offerings” in their portfolio to compete with the market leaders. Then there are small companies with revenues typically < $10 million which are focused on specific pigment chemistries.

Pigments are largely sold as dry powder (e.g., approximately 70% of Clariant sales volumes). These pigments are then formulated as dispersions with other additives

  • Coatings (in the form of paints and inks) are the largest market for colour pigments, representing more than half of demand. 
  • Other applications depend on the type of pigment but include higher volume concrete, ceramics and other building materials, plastics as well as lower volume but higher value cosmetics and other high-purity applications.
 

Jonathan Bourne
Vice-President, Energy & Chemicals Advisory
jbourne@nexant.com
+44 20 7950 1597

Kami Tang Pack (Author)
Senior Consultant, Energy & Chemicals Advisory
ktangpack@nexant.com
+44 20 7950 1543