European Government Aim for Green Buildings is Majorly Boosting the Wood Coatings Industry

Wood coatings are used to enrich aesthetic appeal on the wooden surfaces of furniture, sidings, cabinets, decking & floorings, and others. It helps protect the wood from scratches, moisture damage, spills, stains, and UV damages from Sun. Due to environmental benefits, wood is preferred in building houses for interior purposes like flooring, wall, ceiling and exterior purposes like fencing, decking and sidings. In order to keep it protected and long-lasting wood coatings are used in the process. With the European sustainability law of decreasing carbon emission up to 55% by 2030 and use of 50% wood is mandatory in every new building construction. Thus, the rising use of wood in building and construction, furniture and other sector, is positively contributing towards market growth. Germany and France Wood Coatings Market size is forecast to reach US$944.9 million by 2026, after growing at a CAGR of 3.9% during 2021-2026.

As the Germany and France wood coatings market is a high capital-intensive it is consolidated with restricted number of suppliers. However, the demand for wood coatings is analyzed to grow which is turn boost the market growth rate owing the sustainability law in Germany and France by the European government in 2020 ensuring the use of 50% wood in all new building construction. In 2020 the French government invested US$23.1 million for the imminent construction of 100 urban farms in city suburbs by 2024. In which building construction will include 50% complete wood as per sustainability law. Thus, anticipating the growth in demand for wood coatings in the forecast period.

The usage of water-based wood coatings is steadily increasing in the Germany and France, as water-based wood coatings has low or zero volatile organic compound (VOC) and completely environment friendly. Water-based formulations are employed in wood coatings because they have a high degree of flexibility and reduce moisture and solar radiation absorption, resulting in greater environmental resilience and fewer solvent emissions. However, introduction of stringent VOC and other regulations in France is driving the water-based wood coatings in all the end-use sector. Manufacturers in the wood coatings market are constantly struggling to enhance the performance of water-based wood coatings and minimize its cost. The demand for water-based wood coatings is expected to increase at a faster rate in the coming years, which will further provide Germany and France wood coatings market various opportunities.

Global economies are currently recovering from the consequences of the globe-sweeping COVID-19 pandemic. Due to the increasing cases of the corona virus, European government imposed strict prohibitions, travel restrictions, lockdowns, and factory closures, which hampered the building and construction industry, effecting the demand growth of wood coatings market. For instance, new German housing starts were projected at 204,300 units in 2020 and 206,300 units in 2021. However, due to COVID-19, this was decreased by 6.7%. Besides, the pandemic also had a significant impact on France's socioeconomic outlook in 2020. In the first quarter of 2020, GDP shrank by 5.8% compared to the previous quarter as per the International Trade Administration.

Germany holds a major share of the Germany and France wood coatings market owing to the building and construction industry. Germany held the largest share in the wood coatings market in 2020. Considering the diversified demand from various sectors such as furniture, automotive and others, the demand for wood coatings in the country is growing rigorously. Germany’s federal government has set a target of reducing greenhouse gas emissions from the building and construction sector by 66% to 67% by 2030, which will lead to more preference to wooden houses as they are non-toxic and environment friendly. Thus, accumulating the growth of wood coatings.

Different strategies adopted by the key players to meet the increasing demand from different end users serves is supporting its market growth in that region. For instance in 2021 AkzoNobel expanded in powder coating technologies and has recently opened a new R&D centre for developing low-cure powder coatings to be used on heat-sensitive substrates like medium density fiberboard (MDF), plywood. The Como site in Italy is so far AkzoNobel’s largest plant in Europe.

The rising use of wood coatings in the building and construction and furniture industry owing to the properties such durability, superior gloss retention, good scratch and stain resistance is a major factor driving its market growth during the forecast period. In the Building and construction industry, Germany is one of the key players. According to the Federal Statistics Office, the German government is aiming for 375,000 new units of residential building per year. Thus, accumulating the demand of wood coatings in the forecast period. With the growing building and construction sector the demand for wood coatings is gradually increasing, which is anticipated to drive the Germany and France wood coatings market growth in the upcoming years.

The European government-imposed sustainability law that will ensure all new public buildings are built from at least 50% woods. The measure will be implemented by 2022 and affect all public buildings financed by the respective country. Thus, the rising building and construction activities in the Germany and France, the demand for wood coatings is also anticipated to rise. According to Food and Agriculture Organization of United Nations, the number of applications for the construction of wooden houses in Germany witnessed growth of 30% in 2020 compared to 2019. It is estimated that the construction of these houses could grow more 15-20% in the next six months. The France government had already pledged the sustainable city plan where use of natural materials such as wood, straw and hemp, and any buildings higher than eight storey built for the 2024 Paris Olympics must be made entirely of timber to showcase France's low-carbon ambitions in the lead-up to the 2024 Summer Olympics and Paralympics in Paris. The increasing usage of wood in building constructions for flooring, ceiling, walls, both interior and exterior is rising due to its environment benefits. Thus, in order to protect the woods from moisture, ultraviolet damages, and also to give an aesthetic look, the demand for wood coatings in the building and construction applications is projected to drive the industry growth over the forecast period. According to the survey conduct by Aalto University in 2020, in Europe about 80% of new residential buildings were made of wood. Wood was possibly used in the cladding, structures, and furnishings of houses. Resulting in, buildings would store 55 million tons of carbon dioxide every year. That's corresponding to about 47% of the annual emissions of Europe's cement industry. Therefore, the growth in the sector anticipates the growth in Germany and France wood coatings market.

Wood coatings are extensively used in furniture industry. Thus, the increasing production of furniture across Germany is enhancing the growth of the market. Wood coatings is widely preferred in furniture industry owing to the outstanding performance of the coatings, rapid curing (within fractions of seconds), product constancy, low method costs of surface, and emits low or zero emissions. Thus, wood coatings have attained a significant market share in furniture industry. Wood coating technology in furniture industry is focusing on the development with bio-based content and high-performance product that will let sustainable and low VOC coatings with a top quality and high level of properties. Furniture has been a fundamental piece of France lifestyle for centuries. Currently, the furniture market in France is flourishing. France marked third place in Europe and seventh in the furniture market globally. Thus, it shows the high potential growth of wood coatings market in the country. 

The major companies in the Germany and France wood coatings market include Akzo Nobel N.V., DAW SE, The Sherwin-Williams Company, Axalta Coating Systems, Jotun A/S, Hempel A/S, RPM International Inc., Meffert AG Farbwerke, Teknos Deutschland GmbH, and other. The key focus of the companies has shifted towards acquisition and product launch.

In September 2020, AkzoNobel acquired Stahl Performance Powder Coatings business which will help AkzoNobel to strengthen its global product range in wood coatings for heat sensitive substrates. This acquisition will provide AkzoNobel with low curing technology which will used to apply powder on temperature sensitive substrates like MDF, plywood, and others. Powder coating on wood is a rapidly growing within the coatings industry as consumers regard to embrace the sustainability advantages. The obtained technology is primarily focused on the furniture, architectural and building and construction markets.