Overview of the Paint and Coating Market in Vietnam
The paint and coating industry in Vietnam is a dynamic market, driven domestically, serving various sectors including construction, wood manufacturing, and industrial production. These products not only enhance aesthetics but also provide significant protective benefits, especially in the steel and shipbuilding industries, where they protect materials from degradation caused by environmental factors.
The Vietnam Paint and Printing Ink Association (VPIA) reports that the production value of the industry reached 1.559 million dollars as of 2023, corresponding to a domestic production output of 454 million liters. The decorative segment leads the market, accounting for 53.5% of the total domestic supply output, followed by wood paints and coatings, which hold a 20% market share in 2023.
Production output of paint and coatings in Vietnam by category in 2023 (Unit: % )
Source: Vietnam Paint and Printing Ink Association (VPIA)
The majority of domestic output is consumed locally, with exports of paints and coatings accounting for only 6% of the supply value in 2023. While domestic production capacity has met the general demand for paints and coatings within the country, the Ministry of Industry and Trade (MoIT) notes that Vietnam still has to import some high-tech products from neighboring countries.
However, the sector has faced significant setbacks in recent years, with 2023 marking the lowest performance and the second consecutive year of decline in two decades. Output and value decreased by 21% and 19% respectively from 2022 to 2023. The output of decorative products and wood paints decreased by 23% and 29% compared to the same period last year, while the output of powder coatings fell by 25% during the same period.
The fluctuations in the paint and coating market in Vietnam are largely attributed to trends and demands in the country’s main customer sectors, as most of the output from this market supports domestic manufacturing industries. For example, a report by Savills highlighted the lowest level of new residential housing supply in the past 10 years in 2023, reflecting the declining domestic demand for decorative paints.
Similarly, the Vietnam Timber and Forest Products Association (VIFOREST) reported a 22.5% decrease in exports of wood products and furniture from 2022 to 2023, corresponding with fluctuations in demand for wood paint and coatings. Additionally, several industrial manufacturing sectors experienced a decline in their Industrial Production Index (IIP) in 2023 compared to the previous year, further illustrating the market’s sensitivity to broader economic changes.
Market Concentration and Competitive Landscape in Vietnam’s Paint and Coatings Industry
The domestic paint and coatings market is concentrated among leading companies and characterized by fierce competition between Vietnamese companies and FDI. According to B&Company’s business database, in 2022, the industry achieved total revenue of approximately 2.7 billion USD with over 1,200 companies. However, large foreign-invested companies contributed a significant portion to the industry’s total revenue at 55%. Furthermore, 67 large companies accounted for 71% of the market’s revenue, highlighting the concentrated nature of the market.
Vietnam’s Paint and Coatings Industry by Company Size in 2022 (Unit: %)
Source: Vietnam Business Database
Vietnam’s Paint and Coatings Industry by Revenue Contribution in 2022 (Unit: %)
Source: Vietnam Business Database
FDI companies hold a dominant market share, with only 107 companies accounting for over 60% of market revenue. These companies represent two-thirds of the large domestic operations, with industry leaders such as Akzo Nobel Vietnam Ltd., Jotun Vietnam Co., Ltd., 4 Orages Co., Ltd., and Nippon Paint (Vietnam) Co., Ltd.
Foreign brands have thrived locally by leveraging product quality to dominate many market segments. These companies lead in premium industries and protective coatings, while their decorative products offer advanced features that local manufacturers cannot match. Nippon Paint, a representative from Japan in the market, has succeeded with a wide product portfolio across all segments. The company provides various types of industrial, marine, and high-end protective paints, along with durable architectural paints featuring additional technologies such as waterproofing, dust resistance, crack resistance, and heat resistance.
On the other hand, Vietnamese brands focus on affordability for the mid-range and low-end market segments. Some have invested in advanced technology to enhance product quality and compete with foreign brands. The Kova Paint brand of Vietnam has become one of the industry leaders by offering high-tech paints and coatings combined with technological advancements. Overall, domestic manufacturers can maintain stable growth despite the market dominance of foreign brands.
Growth opportunities in the future of the paint and coating market in Vietnam
Despite fierce competition and recent market fluctuations, Vietnam’s paint and coating market remains promising with growth potential.
Customer industries for paints and coatings have shown signs of recent recovery. The government is working to address challenges in real estate and construction while promoting the supply of residential housing. The industrial manufacturing sector is expected to recover strongly in 2024, with the IIP increasing by 10% compared to the previous year. Exports of wood products and furniture increased by over 20% in the first nine months of 2024, signaling a promising year for the wood coating industry. The paint and coating market is rapidly developing and offers significant growth potential for both domestic and foreign companies, as well as opportunities to expand their product portfolios into other market segments to fully capture market growth.
The government recognizes the importance of the paint and coating industry and has implemented policies to promote growth. Decision No. 726/QD-TTg creates a favorable business environment by addressing market challenges and encouraging investment in high-value, sustainable paints. This decision prioritizes high-tech production while promoting domestic input material supply to reduce dependence on imports. These policies create growth potential for both domestic manufacturers and foreign companies looking to invest in domestic production. Growing concerns about environmental and health issues are driving future growth in the industry. The demand for solvent-based and water-based paints with low volatile organic compound (VOC) content is increasing due to the harmful effects of VOCs such as formaldehyde on consumer health. Similarly, powder coatings and water-based paints are alternatives to solvent-based products in the industrial sector to reduce environmental impact. Leading companies in the industry, such as Nippon Paint (Vietnam), have actively invested in expanding production capacity for these alternatives, reflecting a shift in demand across the industry.
Conclusion
In summary, the paint and coating market in Vietnam is at a turning point. Despite fierce competition and challenges in the industry, recent signs of recovery indicate growth opportunities. Vietnam has focused on creating a favorable environment and supporting the domestic market by addressing current market gaps and leveraging government support. By actively investing and renovating, expanding product offerings, and shifting towards sustainable development, companies can benefit from the market recovery and see economic results.
Source: b-company.jp
