Coatings Word November 2015

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    COATINGSWORLD (ISSN 152-711-29) is published monthly by Rodman Media Corp., 70 Hilltop Road, Ramsey, NJ 07446 USA. Phone: (201) 825-2552; Fax (201) 825-0553.Periodical postage paid at Ramsey, NJ 07446 USA and additional mailing offices. Publications Mail Agreement No: 40028970. Return Undeliverable Canadian Addresses toCirculation Dept. PO Box 1051, Fort Erie, On L2A 6C7, [email protected]: Send address changes to: Coatings World, 70 Hilltop Rd. Ramsey,NJ 07446. Free subscriptions to Coatings World are available to qualified individuals. Others are as follows: U.S. one year $75; two years $120. Outside U.S. and overseas:

    one year $95 (U.S.), two years $160 (U.S.), foreign airmail: one year $195 (U.S.). 5% GST required on Canadian orders. GST #131559148. The publisher reserves the right todetermine qualification of free subscriptions. Printed in the USA. Coatings World is used under license from Whitford Worldwide. Coatings Worlds circulation is audited byBPA International.

    4 | Coatings World www.coatingsworld.com November 2015

    Table of Contents November 2015 Vol. 20, No. 11

    ADVERTISING SECTIONSClassified Ads.......................................................49 Advertising Index................................................. 49

    COLUMNSBusiness Corner ................................................... 16

    Q&A with ColorBond and Reactive Surfaces

    International Coatings Scene ............................... 18Latin Report - Brazils Embraer Raises Aviation Coatings Demand

    Europe - Revival in Construction Leads to Bright Outlook

    for Wood Coatings

    Africa - Nigeria, Angola Oil and Gas Coatings Market onGrowth Path

    iPaint ....................................................................24Tying and Bundling Nice for your Holiday Giving, Not So

    Much When Youre Licensing Your IP

    DEPARTMENTSEditors Page .......................................................... 6

    As We Go To Press .............................................. 10

    Fresh Paint ........................................................... 12

    New Products ...................................................... 15

    Industry News ...................................................... 43

    Suppliers Corner .................................................. 46People.................................................................. 47

    Meetings .............................................................. 48

    Final Coat ............................................................. 50

    28 Exterior Architectural Coatings31 Green Coatings: PPG Coatings Featured on The Tower at PNC Plaza

    33 Adhesives and Sealants

    36 Media and Milling Equipment Directory38 Waterborne Traffic Markings

    Cover photo courtesy of: Dunn-EdwardsPhoto courtesy: PPG

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    Hearing OpportunityBefore It KnocksBecause we strive to always continue learning, we build meaningful

    relationships with every customer by seeking the most extensive

    knowledge and experience. Were more than a simple online search.

    Our expertise lies in collaborating with every customer to provide

    trusted business solutions.

    GUS MUNOZ

    Southwest RegionSales Manager

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    EditorsPage

    [email protected]

    A Rodman Media Publication

    70 Hilltop Road Ramsey, NJ 07446 USA

    (201) 825-2552 Fax: (201) 825-0553

    Web site:www.coatingsworld.com

    EDITORKerry Pianoforte [email protected]

    VICE PRESIDENT/EDITORIAL DIRECTORTom Branna [email protected]

    ASSOCIATE EDITORCatherine Diamond [email protected]

    TECHNICAL EDITORDarlene Brezinski

    ART DEPARTMENTMichael Del Purgatorio

    [email protected] Downing [email protected]

    INTERNATIONAL CORRESPONDENTSSean Milmo (Europe)

    Charles W. Thurston (Latin America/Americas)

    CONTRIBUTING EDITORSPhil Phillips Steve McDaniel

    EDITORIAL ADVISORY BOARDJim Berry (Berry Environmental)

    Joseph Cristiano (consultant)

    Thomas Frauman (consultant)

    Joseph Prane (consultant)

    Isadore Rubin (consultant)

    Richard M. Tepper (PPG Industries)

    Shelby F. Thames (University of So. Mississippi)

    PRESIDENTRodman J. Zilenziger, Jr.

    [email protected]

    EXECUTIVE VICE PRESIDENT

    Matthew J. [email protected]

    GROUP PUBLISHER / ADVERTISING SALESDale Pritchett [email protected]

    ADVERTISING SALES (U.S.)Kim Clement Rafferty [email protected]

    Donna Campbell [email protected]

    ADVERTISING SALES(Europe)

    Ria Van den Bogaert, BVBA Vandenbo

    Karmelietenstraat 24 C, Box 56, 1000, Brussels, Belgium

    Tel.: +32 2 569 8905 Fax: +32 2 569 8906

    Mobile: +32 497 05 0754 [email protected]

    ADVERTISING SALES (Hong Kong, Taiwan & China)Ringier Trade Publishing Ltd

    401-405 4/F New Victory House

    93-103 Wing Lok Street, Sheung Wan, Hong Kong(852) 2369 8788 Fax:(852) 2869 5919

    [email protected]

    CLASSIFIED ADVERTISING SALESPatty Ivanov 631-642-2048; Fax 631-473-5694

    [email protected]

    PRODUCTION MANAGERPatricia Hilla [email protected]

    AUDIENCE DEVELOPMENT MANAGERJoe DiMaulo [email protected]

    CIRCULATION MANAGERRichard DeVoto [email protected]

    ONLINE DIRECTORPaul Simansky [email protected]

    C W circulation is audited by BPA Worldwide.

    This month two of our feature articles focus on the issues of sustain-

    ability and green coatings.

    Exterior Architectural CoatingsExterior Architectural Coatings Market (p. 28) examines the impact

    LEED and the green building movement have had on this market. Over

    the last two decades, paint and coatings manufacturers have increased

    research and development efforts to develop low- and zero- VOC tech-

    nology for paints, stains, caulks and sealants. Delivering premium quality

    that rivals their higher VOC counterparts, reduced VOC paint products

    offer many benefits for professionals and consumers alike.

    All of PPGs products are researched and tested to meet the highestquality standards, said Mary Ellen Shivetts, senior product stewardship

    manager, PPG Architectural Coatings, U.S. and Canada. PPG was one

    of the first pioneers in the paint industry in developing new performance

    standards for zero and low-VOC products.

    The use of water based coatings for wood architectural products

    and powder coatings for metal architectural products will continue to

    grow, predicted Dean Peterson, business development manager, metal

    building products, The Sherwin-Williams Company. Liquid coatings are

    now offered with higher solids, lower VOCs and sustainable raw mate-

    rials. The companys SHER-NAR 5000 Architectural Baking Enamel

    holds the sole U.S. spray license for Arkemas Kynar 500 FSF PVDF resin.

    This fluorosurfactant-free license means that 100 percent Kynar 500 FSFPVDF resin is used, which allows architects to meet the stringent AAMA

    2605-13 specifications and provide long-lasting performance in a variety

    of weather conditions.

    Green CoatingsOur feature on green coatings, PPG Coatings Featured on The Tower at

    PNC Plaza (p. 31)offers a glimpse at the products used on what has been

    dubbed, the worlds greenest building. The 33-story skyscraper features an

    innovative double-skin faade, one of the first of its kind in North America,

    that is designed to help the building naturally ventilate for more than 40

    percent of the year. The inner and outer curtain walls incorporate metal

    panels finished with PPGs Coraflon fluoropolymer powder coating in GrayMica and Sungate and STARPHIRE glasses laminated or fabricated into

    dual insulating glass units.

    Exterior andGreen Coatings

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    AsWeGoToPress

    Axalta Coating Systems to ConstructCustomer Center to Open in Concord, NC

    Axalta Coating Systems announced

    during a groundbreaking ceremo-

    ny that it will construct its new

    Customer Experience Center in Concord,

    North Carolina. The 45,000-square-foot

    facility will serve Axaltas refinish, light

    vehicle OEM and industrial custom-

    ers. The facility will provide the latest

    customer training resources for refinish

    technicians located in the mid-Atlantic

    region. The center will also house meet-

    ing and conference rooms for customersto participate in coatings-related train-

    ing and development programs. The new

    facility will be located on the campus

    of Hendrick Motorsports just outside

    Charlotte. Axalta is a 23-year sponsor of

    Hendrick Motorsports racing program.

    Axalta chairman and CEO, Charlie

    Shaver, owner of Hendrick Motorsports

    and chairman of Hendrick Automotive

    Group, Rick Hendrick, Four-Time

    NASCAR Cup Series Champion, Jeff

    Gordon and Axalta vice president andhead of Axaltas North America business,

    Nigel Budden participated in a ground-

    breaking ceremony to kick-off construc-

    tion. Our goal is to provide a service

    to our customers to help them realize

    improved shop productivity, efficiency

    and quality, said Shaver. We offer a

    hands-on, process-oriented approach.

    Our instructors, designers, and staff

    are committed to continuing the educa-

    tion and the development of our partner

    organizations.Weve enjoyed an unbelievable part-

    nership with Axalta over many years,

    and this represents another unique step,

    Hendrick said. The opportunities for us

    to collaborate, both in racing and in our

    dealership business, are incredible. Our

    two organizations are committed to each

    others continued success, and we look

    forward to many more years of working

    together in innovative ways.

    Axaltas Customer Experience Center

    is scheduled to open late 2016. The centeris expected to draw hundreds of customers

    each year for end of line repair and real-

    world training. It will be equipped with

    the technology to conduct interactive dis-

    tance learning while a customer is at his/

    her own plant or bodyshop. The facility

    will also house a complement of busi-

    ness conferencing resources as well as an

    Axalta exhibit space.

    AkzoNobel SuppliesCoatings for Van Gogh

    Museums New Entrance HallVisitors to Amsterdams world famousVan Gogh Museum can now enjoy step-

    ping through the venues new entrance

    hall, which features products and exper-

    tise supplied by AkzoNobel.

    Completely transparent thanks to the

    use of advanced glass building techniques,

    the spectacular new addition features the

    companys coatings on the walls, steel

    structure and lamp fixtures.

    The new entrance has created an ex-

    tra 800 square meters of floor space,

    which means the museum is now better

    equipped to welcome the growing num-

    ber of visitors and conference guests.

    We are delighted to have worked

    with AkzoNobel on our new entrance

    hall, said Axel Rger, director of the Van

    Gogh Museum. As well as providing the

    necessary expertise, the company has a

    strong focus on preserving culture and

    safeguarding heritage, a commitment we

    both share.

    Added AkzoNobel CEO Ton Bchner:We attach great value to our partnership

    with the Van Gogh Museum. Working on

    the new entrance hall not only enabled us

    to showcase our expertise in a magnifi-

    cent setting, but also allowed us to make

    an important additional contribution to

    Van Goghs enduring legacy.

    AkzoNobel has been a partner of the

    Van Gogh Museums restoration studio

    since 2013. Through this collaboration,

    the company is contributing to the pres-

    ervation of its cultural heritage. CW

    Index to CompaniesThis index gives the starting page for a department or feature with a sig-

    nificant reference to a manufacturer of paint, coatings, adhesives and sealants

    Subsidiaries are indexed under their own names.

    AkzoNobel ......................................................................................................10

    Axalta Coating Systems............................................................................. 10, 12

    ColorBond ......................................................................................................16

    Dunn-Edwards ................................................................................................ 28

    DuPont...................................................................................................8, 10,25

    H.B. Fuller ......................................................................................................33

    Henkel ............................................................................................................ 33

    IVM Group .....................................................................................................20

    Sherwin-Williams .................................................................................16, 18,28

    Flowcrete Americas ......................................................................................... 16

    PPG ..........................................................................................12, 16, 28,31,50

    Valspar ............................................................................................................ 28

    Rust-Oleum .....................................................................................................12

    Sika ................................................................................................................. 33

    Tremco ............................................................................................................ 33

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    Fresh

    Paint

    AkzoNobels influential annual

    global study of color trends has

    been launched, with a shade of

    gold being unveiled as Color of the Year

    for 2016.

    An appropriate color for an Olympic

    year, it was chosen by a specially invited

    panel of independent design and color

    experts to spearhead the companys

    ColorFutures 2016 color trend guide.

    Recently launched at Somerset House

    in London, Color Futures underlinesAkzoNobels wealth of color know-how

    and is used by leading experts in archi-

    tecture, fashion, beauty and interior deco-

    rating to help keep their work fresh and

    contemporary.

    Color is an integral part of our busi-

    ness and sharing our knowledge with

    people around the world means everyone

    can be inspired and benefit from its trans-

    formative impact, said Ruud Joosten,

    AkzoNobels Executive Committee

    Member responsible for Decorative

    Paints. Studying global color and design

    trends also allows us to stay at the cut-

    ting-edge of what consumers want.

    Now in its 13th year, ColorFutures

    2016 focuses on one overall theme

    Looking Both Ways with gold being

    identified as the color that best connectsall the keys trends for next year.

    Gold exemplifies the overall theme

    of duality, explained Heleen van Gent,

    Head of AkzoNobels Global Aesthetic

    Center. Its bright enough to attract at-

    tention, while subtly referring to history

    and heritage. So it represents a fusion of

    our past, our present and our future.

    The study was developed by the com-

    panys Global Aesthetic Center in con-

    junction with leading design and color

    experts from around the world, who con-

    ducted detailed research into global social

    and design trends.The study drew from a

    multitude of influences, from fine art to

    technology, design to nature, architecture

    to fashion, and music to popular culture.

    PPG to Acquire RemainingInterest in Chemfil CanadaJoint VenturePPG Industries has reached a definitive

    agreement to acquire the remaining in-

    terest in Chemfil Canada Limited, a joint

    venture of PPG and Madinal Enterprises.

    The transaction is expected to close in

    AkzoNobel Goes for Goldas Color of the Year 2016

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    Fresh

    Paint

    the third quarter, subject to customary

    closing conditions. Financial terms were

    not disclosed.

    Chemfil Canada produces pretreat-

    ment products, as well as some general

    industrial chemicals, for automotive orig-inal equipment manufacturers (OEMs)

    and industrial customers in Canada.

    The acquisition will enhance PPGs

    pretreatment presence and capabilities in

    Canada, and after closing the acquired

    products and services will be offered un-

    der the PPG name. Also at the conclusion

    of the transaction, an affiliate of Madinal

    Enterprises will own the Windsor produc-

    tion facility and certain non-pretreatment

    business and product lines that will con-

    tinue to use the Chemfil name.Acquiring the pretreatment business

    of Chemfil Canada will enable PPG to

    further strengthen its pretreatment of-

    fering and services in this area for global

    automotive OEM and industrial custom-

    ers, said Cindy Niekamp, PPG senior

    vice president, automotive coatings.

    PPG looks forward to enhancing supply

    capabilities for Chemfil customers and

    providing them with access to PPGs full

    portfolio of coatings products.

    Honda Approves PPG forFlagship NSXEven before Hondas all new flagship

    sports car, the NSX, reaches its first cus-

    tomers in early 2016, PPG has already

    received global repair approval from

    Honda Japan for the stunning supercar.

    Back in 1990, the original NSX was a

    technological masterpiece and the second

    generation is set to follow suit. Along

    with advanced new light weight, multi-

    material construction, the new NSX fea-

    tures a hyper-sophisticated power unitincluding a twin turbo V6 engine, three

    electric motors and a nine speed dual

    clutch transmission which directs the to-

    tal system power of more than 410kW to

    the road via all four wheels.

    Exterior styling is another spectacu-

    lar highpoint. Every element of the low,

    wide and sleek aerodynamic

    body is designed to reinforce the

    cars state-of-the-art credentials.

    Attention to detail can be found

    everywhere, including a truly dynamic

    colour selection. Customers will be of-fered multiple three-stage colour options,

    including PPGs cutting-edge ANDARO

    tint dispersion technology. This inno-

    vative, PPG developed technology pro-

    vides the ability to achieve deep, pure

    and more chromatic colours than is pos-

    sible with traditional pigments. And the

    close relationship with Honda goes even

    further. Indeed, PPG coatings technol-

    ogy will actually be applied at Hondas

    new Performance Manufacturing Centre

    in Marysville, Ohio, where the secondgeneration supercar will be produced. A

    team of PPG staff from Japan and the

    U.S. has been supporting Honda during

    the development phase and the step into

    production that will see the revolutionary

    vehicle make its transition from concept

    to the road.

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    BIRLACARBON.COM

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    a deep, rich black that stands out in the market.

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    choose the world leader in carbon black.

    Lets work together on your next challenge.

    [email protected]

    Youll see the difference.

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    Fresh

    Paint

    Rust-Oleum Restore10X AdvancedDeck ResurfacerReceives the Good

    Housekeeping Seal

    Rust-Oleum has announced that Restore10X Advanced has earned the Good

    Housekeeping Seal. The next genera-

    tion deck resurfacer was evaluated by

    the experts at the Good Housekeeping

    Institute. Its engineers tested the Rust-

    Oleum Restore 10X Advanced on wood,

    composite, and concrete samples, and

    validated that it could stand up to rain

    and sun exposure. The Engineering Lab

    also evaluated Rust-Oleums own data to

    ensure the effects of the product would be

    long-lasting.Todays consumers are faced with

    a market full of products that make

    a large number of claims, said John

    Clarkson, brand director for Rust-

    Oleum. We are honored that Restore

    10X Advanced, our long-lasting re-

    pair coating made for severely worn

    decks and concrete patios, is backed

    by the Good Housekeeping Seal. The

    Good Housekeeping Seal will provide

    consumers with a trusted, third party

    review of the products claims and

    performance.

    Axalta Coating SystemsWins Contract forRestoration of PanamaCanalAxalta Coating Systems has won a four-

    year contract to supply industrial coat-

    ings and architectural building paint

    which will be used to restore and sustain

    different buildings and the locks of the

    Panama Canal.

    The Panama Canal is one of themost important engineering works in

    history, an iconic engineering achieve-

    ment, explained Alfredo Villalobos,

    Latin America Industrial Coatings

    Director. The canal will now be re-

    stored with some of the most advanced

    industrial coating products in the world,

    applications that will extend the produc-

    tive lifespan of the Canal Zone as a key

    asset in international trade.

    Several different Axalta coating prod-

    ucts, each formulated to meet the needs

    of different materials, will be used to re-invigorate the largest canal in the world

    and meet the needs of the many differ-

    ent structures in the Canal Zone that

    will be repainted during the restoration

    project. Axaltas Renzel and Galvox ar-

    chitectural paints will be used to bring

    life to interior and exterior building walls

    and trim. Floors will be protected with

    Axaltas Corlar and Imron Industrial

    coating products. Interior and exterior

    galvanized and other metal surfaces, in-

    cluding the actual canal locks themselves,will be coated with Ganicin, Speedtec and

    Galvox, which are especially designed to

    reduce application time by their ability to

    be directly applied to metal and for use

    on long-lasting, heavy-duty substrates,

    such as marine surfaces constantly ex-

    posed to water. CW

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    business strategy?

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    protecting your trade secrets, but at the core of our business

    are scientists who have long been involved in the specialty

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    Successful Strategies for Decision-Makers

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    concentrates on tactical &strategic activities surrounding

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  • 7/25/2019 Coatings Word November 2015

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    New

    Products

    Sherwin-Williams Protective &

    Marine Coatings now offers a prod-

    ucts for industrial businesses looking

    to enhance worker safety and minimize

    corrosion under insulation (CUI) risks.

    Heat-Flex 3500 is a multipurpose

    insulative acrylic coating for industrial

    systems thats designed for both person-

    nel protection and mitigating CUI. The

    coating enables dangerously hot systems

    like piping and ductwork to stay cool to

    the touch, preventing burns and protect-ing the safety of personnel. It can be ap-

    plied directly to ambient or hot surfaces

    up to 350 F (177 C), offering plants the

    flexibility to reduce downtime by keeping

    systems online during coating and recoat-

    ing applications. In addition, Heat-Flex

    3500 also insulates hot and cold surfaces,

    helping industrial processes retain heat

    and preventing condensation on cold

    surfaces by maintaining surface tempera-

    tures above the dew point.

    The insulative and anti-corrosiveproperties of Heat-Flex 3500 enable

    plant owners to eliminate concerns relat-

    ed to CUI. The protective coating system

    prevents corrosion-causing condensation

    on the exterior of piping, ductwork, and

    other surfaces wrapped in conventional

    insulation and cladding. It performs so

    well at mitigating corrosion that struc-

    tures coated with Heat-Flex 3500 can be

    removed from CUI inspection protocols.

    Available in white and slate gray, Heat-

    Flex 3500 is ideal for coating everythingfrom pipes, valves, tanks, vessels, heaters,

    and boilers to compressors, pumps, con-

    tainers, stacks, and ductwork that oper-

    ate in temperature ranges between -80 F

    and +350 F.

    Heat-Flex 3500 goes on fast and easy

    to save application time and costs. Its

    single-component, waterborne acrylic

    formulation can be applied with standard

    airless equipment. Its very fast dry time

    allows for recoating within two hours.

    In addition, Heat-Flex 3500 minimizesoverspray risks with droplets drying to a

    non-adhering dust within a 20-foot fall.

    Heat-Flex 3500 is suited for a wide

    range of environments, including oil and

    gas refineries, chemical, power, water,

    wastewater, and food and beverage plants.

    Flowcrete AmericasIntroduces New Anti-Corrosion Coatings, LiningsFlowcrete Americas has announced the

    launch of a new range of anti-corrosive

    vinyl ester coating and lining materialsdesigned to protect concrete and steel

    structures from the damaging effects of

    severe chemical and mechanical attack.

    Flowchem is a new range of seam-

    less, elastomer modified vinyl ester resin

    systems designed for tough industrial en-

    vironments including those found in the

    power, oil and gas, mining and petrochem-

    ical sectors, where they act as a barrier

    to inhibit the contact between chemical

    compounds or corrosive materials.

    Vinyl ester resin a hybrid of polyes-ter resin strengthened by the addition of

    epoxy resin - offers superior protection

    against highly concentrated and aggres-

    sive acids, alkalis and solvents including

    sulfuric, nitric and hydrochloric acid as

    well as ethanol, butane and methanol.

    Flowchem systems provide tempera-

    ture resistance of up to 350F, excellent

    bond strength and abrasion resistance as

    well as reduced shrinkage, durability and

    excellent bond strength.

    Systems available in the range includeFlowchem VE RC, a horizontal and ver-

    tical roller applied vinyl ester coating

    installed at 40 mils, Flowchem VE BC a

    more robust version installed at 60, 75

    or 125 mils with graded aggregates sand-

    wiched in between two layers of vinyl

    ester resin to provide enhanced traction,

    strength and impact resistance.

    Also available for hardier environ-

    ments where improved dimensional sta-

    bility is needed including areas subject to

    explosion risk or Liquid Nitrogen han-dling, is Flowchem VE GL, a glass fiber

    reinforced horizontal and vertical applied

    system installed at 125 mils.

    PPG LaunchesNUTRISHIELDFood-Can CoatingsPPG Industries packaging coatings busi-

    ness has launched NUTRISHIELD new-

    generation coatings for the food-can

    industry and Nutrishield SOLISTA inter-

    nal protective spray coatings for drawn

    and wall-ironed food cans. Nutrishieldbrand products are PPGs new generation

    of food-can coatings, designed to fulfil

    can-makers and brand-owners needs

    regarding enhanced food-contact regula-

    tory requirements.

    The Nutrishield Solista technology

    Bisphenol A non-intent (BPA-NI, or with

    no BPA intentionally added) spray coat-

    ings for drawn and wall-ironed food cans

    is the first BPA-NI high-performance so-

    lution for the food-can industry approved

    to pack ready meals, soups and infantfoods such as milk. The coatings comply

    with North American and European reg-

    ulations and are food-contact compliant,

    certified by independent institutes.

    Suitable for low- to high-pH and fatty

    foods, Nutrishield Solista spray coatings

    also have enhanced flavor-neutral proper-

    ties to help easily affected products pass

    extensive flavor tests.

    More than 3 billion food cans will

    have been coated with Nutrishield Solista

    spray coatings by the end of 2015. Thecoatings are now available commercially

    in the U.S. and were launched in Europe

    over the last year, and they are ready for

    global reach and supply with production

    capacity in all regions.

    PPG produces Nutrishield Solista

    coatings in vessels dedicated to the manu-

    facture of BPA-NI spray. In addition, PPG

    offers a complete new-generation system

    for drawn and wall-ironed food cans,

    with BPA-NI PPG Washcoat (PPG5200

    series), fully compatible with NutrishieldSolista internal spray coatings. CW

    Sherwin-Williams OffersThermal Insulative Coating

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    Business Corner Strategies & Analysis

    by Phil Phillips, PhD

    Contributing Editor

    [email protected]

    In the world of coatings and paints,

    there are many nooks and crannies

    where really neat things are going on,

    but we dont routinely hear much about

    them. Heres a couple of companies serv-

    ing niche needs and doing quite well.

    ColorBond and Reactive Surfaces (RSL).ColorBond is a revolutionary molec-

    ular bonding paint that penetrates deep

    into plastic, vinyl and leather. It provides

    easy restoration and can change the color

    of leather, carpet, plastics or metal in au-

    tomobiles, trucks, cars, boats, or motor-

    cycles with fantastic results. -Malcom

    Johnson, President & Founder

    CW:When did you form ColorBond &

    why did you feel you could have a viable

    product in these markets?

    ColorBond: ColorBond was establishedin 1996 because I felt that the available

    coatings for refinishing automotive leath-

    er and plastics were inferior and could be

    dramatically improved. At that time, the

    idea of a premium coating for leather and

    plastic was not being addressed, and we

    felt that there was a great market oppor-

    tunity for our company.

    We were fortunate to be approached

    by Visteon, at that time owned by the

    Ford Motor Company, to partner with

    them in developing the technology. Weworked with Ford Research Labs and

    Visteon for seven years and this collabo-

    ration culminated in ColorBond earning

    two Ford World Wide OEM perfor-

    mance specifiations.

    CW: According to Michael Porter

    (Harvard Professor of), a NICHE position

    in a specific well-defined market segment

    has the highest profits in that segment as

    well as a UNIQUE offering. UNIQUE is

    defined as having something no one elsepossesses. Would you say your offerings

    are unique by this definition? Why?

    ColorBond: ColorBond is unique because

    it is a one stage coating that can be used

    on any substrate that is manufactured

    for the automotive industry including,

    leather, vinyl, ABS, PC, TPU and TPO

    and metal. It doesnt crack flake or peel,

    is colorfast , dries within one minute and

    is bonded in ten minutes. Colorbonds

    versatility allows the user to stop in the

    middle of a job and resume the project at

    a later date. There will be no evidence ofa tape line, only a seamless OEM finish.

    It creates an OEM appearance.

    ColorBond can be used on carpet, soft

    interior trim, rigid interior trim, exterior

    trim and convertible tops. We currently

    manufacture and inventory 172 contem-

    porary OEM specific aerosol colors.

    CW:Can you provide some insight into why

    or how your Colorbond technology works

    with so many different type substrates?

    Colorbond: The key is our unique resin.It is ideally suited for use on all of these

    substrates.

    CW: Your literature shows ColorBond

    spray-on products applied over rigid,

    supple, and even very soft pliable surfac-

    es. Tell me - what is the longevity of your

    coating system over a leather automobile

    seat where flexibility, abrasion and over-

    all toughness prevail?

    Colorbond: ColorBonds longevity de-

    pendent upon the preparation of thesurface and the skill of the individual ap-

    plying it. When the easy to use directions

    are followed accurately, ColorBond will

    maintain its flexibilty and abrasion resis-

    tance for a minimum of four years.

    Both Ford performance specifications

    require that ColorBond perform for the du-

    ration of a typical four year warranty. This

    includes UV stability, flex, and abrasion.

    CW:Are the coating formulas you mar-

    ket exclusive to your use or do you alsoallow other coating companies to market

    your unique products?

    ColorBond:The formulas are proprietary

    however we do manufacture private label

    colors for many customers

    CW: How do you go-to-market current-

    ly? Direct, Stocking Distributors, etc.?

    Colorbond: We are nimble and have

    the capabilities to distribute to a wide

    spectrum of customers. The list includes

    stocking distributors, mobile technicans,

    retailers, catalogue houses, aftermarketparts distributors, private labels and more.

    We are very pleased with the perfor-

    mance of our web site www.colorbond-

    paint.com Two years ago we invested

    heavily in the redesign of our web site. The

    platform fully engages in social media and

    SEO. We speak directly to the consumer

    on a daily basis. This allows us to never

    lose the connection with the most impor-

    tant person, The Customer.

    CW: Are your target end-use mar-kets growing and equally important, is

    Colorbond keeping pace?

    ColorBond: Our target end use markets

    expand every year and we continue to

    grow every year. New markets continue

    to develop that we had never imagined

    such as painting 3-D substrates.

    CW: As an private individual, how can

    I order these coatings from Colorbond?

    Direct? Distributor?

    ColorBond: An individual can order online atwww.colorbondpaint.com or con-

    tact us at 877 882 6567.

    CW: Can you tell us about the Cleo

    Award that you established in 2014 ?

    ColorBond: The Cleo Award was estab-

    lished to honor a legend in the automo-

    tive world, Mr Leo Kagan. Leo is 99 years

    old and was responsible for moving the

    SEMA show from Anaheim to its pres-

    ent location in Las Vegas. He has been a

    member of SEMA for 50 years.A $ 500 cash prize, and crystal vase

    Q&A with ColorBond and Reactive Surfaces

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    Business CornerStrategies & Analysis

    are awarded to an individual who restores

    the interior of any make of vehicle using

    ColorBond products. Last years winner

    restored a 1967 Cadillac Deville and this

    years winner restored a 1954 Rolls Royce

    Silver Wraith. The Rolls will be on displayin our booth at SEMA this year.

    Austin, Texas based Reactive Surfaces

    is a bioengineering company that devel-

    ops enzyme-based additives for paint

    to detoxify neurotoxins, including nerve

    agents and pesticides.

    CW: When did you form Reactive

    Surfaces & why did you feel you could

    have a viable product in these markets?

    Reactive Surfaces:We started Reactive

    Surfaces with the concept that it might bepossible to extract valuable functionality

    from nature and entrain it into coatings

    in a long-term stable manner.

    The attack on the World Trade center

    brought our self-decontaminating coatings

    into the spotlight in 2001. We started the

    company in earnest in 2002. By 2008,

    we had developed the technology well

    enough to be awarded the 2008 American

    Coatings Award for innovative technology.

    After over ten years, we can say that its

    not only possible to place biological mol-ecules into resin systems but that it can be

    accomplished for a wide array of natural

    functions from enzymes generating self-

    degreasing surfaces capable of removing hu-

    man fingerprints from touch screen devices

    and countertops, to non-toxic peptides that

    create anti-microbial surfaces for medical

    devices and kitchen appliances. The formu-

    lator can now dependably dial in natural

    functionality to its existing coating products.

    CW: According to Michael Porter, aNICHE position in a specific well-defined

    market segment has the highest profits

    in that segment as well as a UNIQUE

    offering. UNIQUE is defined as having

    something no one else possesses. Would

    you say your offerings are unique by this

    definition? Why?

    RSL: We believe RSL is the first and

    only company commercializing bio-based

    molecules as functional additives for coat-

    ings. But, the competition is not far behind

    since the industry is realizing just howvaluable such functionality can be, and

    how biological molecules such as enzymes,

    peptides, antibodies, and the like exist in

    Nature ready-made for such work. We are

    the only group that presently offers these

    bio-based additives, as well as functional-

    ized coatings containing them. With thelaunch of our e-RACE line of anti-finger-

    printing touch screen protectors, we can

    also say we are unique in offering a finished

    consumer product coated with a functional

    coating entraining a bio-based molecule

    (the naturally-occurring enzyme, lipase).

    CW: Can you provide some insight into why

    or how your bio-based additive technology

    works with so many different types of resin

    systems and on a variety of substrates?

    RSL:The trick seems to be that in theirnatural condition, many of these mol-

    ecules are actually entrained into bio-

    logical surfaces. Take for instance our

    anti-microbial peptide products like

    ProteCoat. Almost all higher organ-

    isms use anti-microbial peptides as a part

    of their natural defense systems against

    surface contamination. These peptides

    are present on the surfaces of the organ-

    isms most at-risk of infection. Enzymes

    like to packaged and constrained from

    unfolding, so the cross-linked cages cre-ated by polymerization of a wide number

    of resin systems do a nice job of that.

    CW:Most people in the industry regard

    biological molecules as too unstable and

    short-lived to be useful as additives in

    coatings. What is the longevity of your

    additives in a coating and how rugged are

    they to weathering?

    RSL: I understand the sentiment, and I

    initially felt the same way. But, now with

    tons of testing and years of experience, wenow have a rule of thumb around here if

    the coating lasts, the functionality will last.

    For example, we have entrained enzymatic

    degreasing functionality (DeGreez) in

    coatings, coated panels with them, and then

    subjected those coatings to MEK double-

    rubs down to the bare metal. Not only did

    the enzymatic activity remain all the way

    until the coating is finally scrubbed off, it

    actually increased as more of the surface

    was exposed to the grease challenges it

    was designed to combat. Additionally, weentrained enzymes capable of detoxifying

    nerve gases (OPDtox) into military

    coatings and placed panels coated atop

    black rotor blades of military helicopters.

    These coupons were left in the desert sun

    for months, and they demonstrated virtu-

    ally the same enzymatic activity they hadthe day they were made. This is also true

    our peptide biocides (ProteCoat), being

    subjected to long-term (4+ years) outdoor

    weathering at USM. The panels coated

    with the peptide-containing outdoor

    white paints remain virtually microbe-free

    throughout the testing period as opposed to

    heavy contamination of control coatings.

    CW: Are the bio-based additives, coat-

    ings and coated products you market ex-

    clusive to your use or do you also allowother coating companies to market your

    unique products?

    RSL: We have a manufacturing facility in

    Hattiesburg, MS where our labs are also

    located. We build the additives, formulate

    the coatings and manufacture the sheet

    materials for touch screens there. Our

    marketing capability is somewhat limited.

    We are the epitome of the Little Engine

    That Could mentality. However, it has al-

    ways been the overriding goal to partner

    commercialization of the technology wehave developed with others in order to ac-

    cess the larger commercial markets.

    CW: How do you go-to-market current-

    ly? Direct, Stocking Distributors, etc.?

    Colorbond: We directly market our bio-

    based functional coatings applied to adhe-

    sive sheet materials, such as are designed

    for anti-fingerprinting touch screen protec-

    tors (e-RACE), through mass-marketing

    channels (internet, TV, printed catalogs,

    etc.). We use fulfillment services for some ofthis. We also spend a considerable amount

    of manpower publishing articles in industry

    publications. www.reactivesurfaces.com.

    Using these approaches, we have been able

    to garner the attention of larger corporate

    partners who are interested in incorporat-

    ing our additives or bio-based coatings con-

    taining these into their own product lines,

    and we are presently moving toward com-

    mercialization with several of them.

    CW: We will revisit you and RSL again in

    the near future and look forward to muchanticipated progress. CW

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    International Coatings Scene Latin America

    by Charles W. Thurston

    Latin America Correspondent

    [email protected]

    The strong growth recovery of Brazils

    Embraer, one of the top five small jet

    makers in the world, should raise de-

    mand for aviation paint and coatings, in contrast

    to other segments with slow or no growth in

    the economically challenged country. Embraer

    sales, which are very global in distribution, roseto $402 million during third quarter this year

    from $213 million in the comparable period

    last year. The Sao Jose dos Campos, Sao Paulo

    state company also has a growing pipeline of

    orders. This year, Embraer predicts $1.85 bil-

    lion worth of global sales of 90 light jets and

    40 medium jets, representing 28 percent of the

    companys total revenue. Embraer has sold a

    cumulative 850 small jets in the world, 200 of

    which are within Latin America.

    Within Brazil, the national small jet fleet

    grew by 3.6 percent last year, Embraer calcu-lates. Company expectations are that over the

    current decade, Brazil will add 560 small busi-

    ness jets valued at $9.4 billion.

    Embraer Executive Jets, which has a manu-

    facturing plant in Melbourne, Florida, recently

    celebrated the sale of its 300th Phenom 300.

    The light jet has been the most-delivered busi-

    ness jet in the world for the past two years, the

    company claims.

    Further bolstering aviation expansion in

    Brazil, the Air Force in April agreed to buy 36

    Gripen NG aircraft for $4.6 billion including aturnkey weapon system with comprehensive lo-

    gistic support that includes training, spare parts,

    support, planning and maintenance, a state-

    ment indicates. In addition, Brazil will partner

    with Saab in Sweden for the development and

    production or eight two-seater aircraft, that will

    be delivered between 2019 and 2024.

    In mid-2015, Embraer employees will be

    trained in Sweden on maintenance and develop-

    ment of the Gripen NG. This training technol-

    ogy will then be transferred to Brazil through

    the development of an Engineering Center tobe built at Embraers plant in Gavio Peixoto,

    state of So Paulo, including Saab support of

    the Gripen aircraft for the Air Force.Apart from Embraer activity in aviation,

    AgustaWestland do Brasil is planning to build a

    new plant at Itapevi, state of Sao Paulo, that would

    include a helicopter final assembly line; construc-

    tion of the new facility is scheduled to be completed

    in 2016. The project is being supported by Investe

    So Paulo, the state investment promotion agency

    within the Secretariat of Economic Development,

    Science, Technology and Innovation.

    Drone development in Brazil could also spur

    coatings demand. An Embraer joint venture

    with Israeli manufacturer Elbit resulted in thelatters opening of subsidiary AEL Sistemas in

    Porto Alegre, state of Rio Grande do Sul. The

    state cancelled a contract for drones from the

    company in December 2014, purportedly for

    political pressure. Drone use in Brazil still could

    be spurred by a new government regulation

    over the use of the products, now limited to

    state security, which was used during the World

    Cup in soccer and is expected to be in use for

    the 2016 Olympics in Rio de Janeiro.

    Within the global thermal spray coating

    market, estimated to reach $12.3 billion by2022, corrosion resistant coatings in aero-

    space will help spearhead demand, according

    to Grand View Research. Aerospace is now the

    largest segment for thermal spray, valued at

    $2.6 billion last year, and increasing global gov-

    ernment spending in civil aviation will propel

    the thermal spray coating market over the next

    seven years, the analysts opine.

    Among major suppliers of aviation coatings

    are AkzoNobel, PPG, Sherwin-Williams, BASF

    and Henkel, which are also active in the archi-

    tectural, automotive and other industrial seg-ments of the Brazilian market. CW

    According to

    Embraer, within

    Brazil, the

    national small

    jet fleet grew by

    3.6 percent and

    expectations

    are that over the

    current decade

    Brazil will add 560

    small business

    jets valued at $9.4

    billion.

    Brazils Embraer RaisesAviation Coatings Demand

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    ISO 9001

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    International Coatings Scene Europe

    20 | Coatings World www.coatingsworld.com November 2015

    by Sean Milmo

    European Correspondent

    [email protected]

    T

    he short to medium outlook for wood

    coatings in Europe is looking bright

    at the moment as a result of a revivalin the construction industry in the European

    Union and increased sales of wood products in

    segments in which previously the material has

    been little used.

    In the longer term the biggest driver in the

    sector is the widespread belief that wood offers

    more opportunities than other materials for

    combating climate change.

    However, the expansion of the European

    wood market presents challenges to producers

    of wood coatings and related treatments like

    stains and oils, which goes beyond productinnovation. The coatings industry has to be

    able to demonstrate that the sustainability of its

    products matches that of wood itself.

    Currently growth in demand for timber has

    not been uniform across Europe or even within

    individual European countries. But analysts

    reckon it has been averaging a rate well above

    GDP growth in Western Europe of around 1-2

    percent, which is about the level of expansionof the whole of the regions coatings market.

    Hardwood output went up by 8 percent last

    year but many hardwood sectors were still at

    production levels below those before the 2008

    recession, according to the European Timber

    Trade Federation (ETTF).

    Timber sales in Germany went up 4 per-

    cent in 2014, considerably above the countrys

    GDP rise, reports GD Holz, the German tim-

    ber trade association.

    But this increase was offset by a 7-percent

    drop in sales in the first four months of thisyear with building product sales going down

    Revival in Construction Leads to BrightOutlook for Wood Coatings

    The expansion

    of the European

    wood market

    presents

    challenges to

    producers of

    wood coatings

    and related

    treatments like

    stains and oils,

    which goes

    beyond product

    innovation. The

    industry has to

    demonstrate that

    the sustainability

    of its product

    matches that of

    the wood itself.

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    International Coatings SceneEurope

    November 2015 www.coatingsworld.com Coatings World | 21

    by 7 percent.

    There has been a steep increase in

    demand for some engineered woods in

    northern European countries, which have

    helped to widen the architectural poten-tial of wood.

    In Stockholm a joint venture of a contrac-

    tor and house developer is planning to build

    6,000 dwellings using engineered woods, in-

    cluding a 13-storey apartment block.

    B&K Structures, a specialist in hybrid

    materials structures, has been building

    at Banyan Wharf, London, a 10-story

    residential construction with a mix of

    frames of steel and engineered wood. A

    14-storey building of engineered wood in

    Bergen, Norway, is due to be complet-ed this year, while in Vienna a 24-story

    tower of concrete and wood is also being

    constructed for commercial use.

    A major consequence of the greater

    use of wood in a wider variety of build-

    ing, both on their exteriors and in their

    interiors, as well as in niches in the auto-

    mobile, household appliance and signage

    sectors is that wood coatings manufac-

    tures have to operate more on a bespoke

    basis with architects and designers want-

    ing customised products.The outcome is a much more fragment-

    ed market. Of the 600,000 architects in

    Europe, a growing number are becoming

    aware of the benefits of wood compo-

    nents and then are wanting to specify the

    paints and dyes to be used on them.

    In the EU joinery and furniture in-

    dustries alone, there are around 300,000

    manufacturers, the vast majority of them

    small-scale.

    This fragmentation is helping SMEs

    specializing in wood coatings, par-ticularly those mainly serving local or

    regional markets.

    The bigger players have to rely on

    networks of distributors. Also, to keep

    up with the rising demand for custom-

    ized products and constant innovation,

    they require versatile R&D departments.Italys IVM Group, based in Milan,

    which, through its Milesi unit, is one of

    Europes leading suppliers of wood coat-

    ings for professionals, spends 8 percent

    of its revenue on R&D.

    A possible consolation for wood

    coatings manufacturers is that the surge

    in sales of the new, engineered woods,

    whose strands and fibers are restruc-

    tured to form composite high-strength

    materials, looks unlikely to necessitate

    the development of complex new coat-ings formulations.

    At present the ones proving to be

    popular with architects and designers in

    Europe are cross-linked timber (CLT),

    glulam and thermally and chemically

    modified woods.

    CLT comprises layers of boards placed

    cross-wise to adjacent layers, while glued

    laminated timber or glulam consists of

    several layers of timber of different di-

    mensions stuck together with adhesives

    to make vertical or horizontal columns asstrong as steel.

    The big bonus for coatings manufac-

    turers is that these woods are chemically

    and physically more stable than conven-

    tional woods, explained a UK-based

    timber consultant. The existing coatings

    actually perform better on them and can

    be applied with heavier loadings.

    On the other hand coatings on en-

    gineered woods have a disadvantage in

    respect to the contribution they make

    to the sustainability of the woods. CLT,glulam and others have a long service

    life in buildings so that far lower energy

    inputs are required than with other ma-

    terials while they act as a means of stor-

    ing carbon. But this gain comes far more

    from the engineering of the wood itself

    than the coating itself.

    With conventional woods, coatings

    have a much bigger role in extending the

    service life of the woods, a quality which

    would be reflected in the life cycle assess-

    ments (LCAs) of the coatings.We have an LCA database with data

    on the chemicals in coatings going back

    20 years, which show how they improve

    the environmental impact of wood

    products by altering their life cycles,

    explained Sandy Smith, a consultant at

    thinkstep, LCA specialists, Leinfelden-Echterdingen, Germany.

    With a rising number of wood purchas-

    ers wanting to know the LCAs of what

    they buy, including those of the coatings,

    it is becoming important to know as ac-

    curately as possible how much coatings

    exactly prolong service lives of woods.

    With coatings on exterior wood

    components on buildings, like window

    frames, there can be significant differ-

    ences in estimates of service life of coat-

    ings because of the lack of consistencyin the data from short-term laboratory

    tests, including accelerated weathering,

    and that from natural or field weather-

    ing exposures.

    Servowood, a research project co-

    ordinated by the European Coatings

    Federation (CEPE) and funded by the EU,

    aims to fill the data gaps between the two

    systems of weathering tests.

    Started last year and due to be com-

    pleted in 2017, it aims to establish

    European Standards for facilitating theprediction of the service life for exterior

    wood coatings across different climatic

    zones. Much of the research will be fo-

    cused on measuring the inputs in dosage

    based on factors like temperature, UV

    light and moisture and the response of

    different coatings systems to them.

    We will establish parameters for cre-

    ating models for extrapolating the causal

    links between the inputs dosages and

    the performance of the coatings in both

    laboratory and field-based exposures,explained Jan van der Meulen, CEPEs

    director general.

    CEPE is hoping that the firmer data

    on the service life of exterior wood coat-

    ings will help coatings companies develop

    even more efficient products, while high-

    lighting how much coatings underpin the

    unique sustainability of wood, particu-

    larly in buildings.

    The research will help wood prod-

    ucts to be even more effective in the

    fight against climate change, van derMeulen said.CW

    The short to

    medium outlook for

    wood coatings inEurope is looking

    bright at the

    moment.

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    International Coatings Scene Africa

    by Shem Oirere

    Africa Correspondent

    Two of Africas hydrocarbon indus-

    try giants, Nigeria and Angola, are

    poised to dominate the continents

    offshore oil and gas paints and coatings

    market in the short- and medium-term on

    the back of ambitious projects already un-

    derway or in the pipeline.Market analysts Frost & Sullivan predicts

    in a new report the two countries, which

    have a combined 46 billion barrels of proved

    crude oil reserves, present attractive growth

    and operational expansion opportunities for

    manufacturers in the offshore oil and gas

    (O&G) paints and coatings market.

    With raw material availability and local

    manufacturing capabilities catalyzing pro-

    duction and supply lines, the two countries

    are rapidly emerging as the African hub for

    the offshore oil and gas paints and coatingsmarket, the report said.

    Currently, Nigeria and Angola have lined

    up a total of 19 offshore oil and gas projects

    over the next five years and these are expected

    to substantially grow the two countries off-

    shore oil and gas paints and coatings market.

    Angola, which holds 9 billion barrels of

    proved crude oil reserves, most of it located in

    offshore areas of Lower Congo and Kwanza

    basin, has up to 10 major offshore projects

    set for implementation in a bid to increase its

    crude production capacity. The projects in-clude Mafumeira Sul, Luanzi field, Kizomba

    Satellites Phase 2, East Hub Project (Cabaca

    Norte, South-East), Greater Plutonio Phase 3,

    Kaombo Project, Negage, Lucapa, Chissonga,

    Malange and Cameia.

    The projects are being developed by ma-

    jor international oil companies (IOCs) of

    Chevron, ExxonMobil, Total, BP, Maersk

    Oil, Eni SpA and Cobalt either separately or

    jointly.

    Earlier, US Energy Information

    Administration (EIA) said: Because severalof Angolas older deepwater fields are past

    their peak production, the new capacity ad-

    ditions from upcoming projects are more

    likely to sustain Angolas crude oil produc-

    tion around or slightly above current levels

    over the medium term rather than provide a

    substantial boost.

    Six of the Angolan projects have reached

    final investment decision (FID) phase with

    EIA saying: Despite the recent drop in global

    oil prices, projects that are past FID stage will

    most likely not be cancelled because the pro-

    curement phase has already started.In Nigeria, a country with 37 billion bar-

    rels of proved crude oil reserves, second only

    to Libya, IOCs have unveiled nine offshore

    oil and gas projects to be implemented over

    the next five years and which are likely to

    boost growth of the West African countrys

    offshore oil and gas market.

    Although the countrys controversial

    Petroleum Industry Bill has held back several

    of the planned projects, with only two having

    been sanctioned by IOCs, the West African

    economy presents one of the largest growthopportunities for the offshore oil and gas

    paints and coatings market.

    The projects have a combined capacity of

    1.1 million new productions in five years ac-

    cording to EIA.

    In the new Frost & Sullivan report both

    countries generated revenues of $675.1 mil-

    lion in 2014 earnings set to rise to $1,131.4

    million in 2019 based on the study of the

    offshore oil and gas facilities, dry docks and

    fabrication yards.

    The subsidization of manufacturingmakes Nigeria and Angola vital to the produc-

    tion of offshore oil and gas paints and coat-

    ings in Africa, with the goal of African needs

    being fulfilled by African countries, said

    Frost & Sullivan Chemicals and Materials re-

    search analyst Abdul-Baasit Abdullah.

    The drop in crude oil prices has reduced

    the base costs of paint through a reduction

    in raw material cost of 8.3 percent, driving

    competitive pricing and consumption.

    Construction of local production facili-

    ties will be vital in order to ensure cost-com-petitiveness, as transportation costs of raw

    Nigeria andAngola are

    poised to

    dominate Africas

    offshore oil and

    gas paints and

    coatings marketin the short- and

    medium-term

    on the back

    of ambitious

    projects already

    underway or inthe pipeline.

    Nigeria, Angola Oil and Gas CoatingsMarket on Growth Path

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    IPaint Protecting the P&C Industrys Intellectual Assets

    by Steve McDaniel, JD, PhD

    Technology Litigators

    Youve developed a cool new ad-

    ditive for a broad spectrum of

    coatings even those coatings

    outside your own wheelhouse coat-

    ings. Happens a lot, right? In order to

    maximize the return on your R&D in-

    vestment bringing the additive to mar-

    ket, you begin licensing to others. Youstart negotiating a license to your intel-

    lectual property surrounding the use of

    this novel coating component. You have

    a patent covering some aspects, you have

    a trademark that delivers goodwill you

    have developed in the product, and you

    even have some copyrighted software

    that can be used to predict formulating

    mixtures. Integrating all of this dispa-

    rate collection of intellectual property is

    a lot of know-how, show-how and gen-

    eralized trade secret information.Youd like to extract maximal value

    out of the hard-won trade secret portfo-

    lio, so you suggest to the other party that

    you manufacture the coating component,

    and that they agree to buy it from you as

    a sole source (since youre the only one

    that has access to the trade secret treasure

    chest). You might think licensing your

    trade secrets would be just like licensing

    your other intellectual property (e.g., pat-

    ents, trademarks, copyrights, etc.). But,

    there are some potholes along the roadthat may prevent you from hauling your

    licensing royalties to the bank.

    Linking IP with products or with

    other types of intellectual property is

    done all the time. You may be offering

    licenses that cover multiple patents or

    copyrighted materials or you may con-

    nect (tie) the sale of two distinct pat-

    ented goods. Or you might license or

    good covered only by trade secret with

    another patented good.

    A classic contractual patent tyingoccurs when the tying product (e.g., a

    vapor deposition machine for coating

    electrical devices) is patented, but the

    tied product is not patented. Rather,

    it is a raw material used as an input

    for the tying product (spe-

    cialized coatings that are

    vapor deposited), and the

    sale of the patented prod-

    uct (machine) is condi-

    tioned on the purchase of

    the unpatented product

    (coating). A technologi-cal tie on the other hand

    is one where the tying and

    the tied product get bun-

    dled together physically or

    they are co-produced so

    that are only useable with

    each one another. The in-

    famous U.S. government

    suit against Microsoft in-

    volved both the contrac-

    tual and technological

    bundling of the InternetExplorer web browser (in

    this case, the tied product)

    with MicroSofts Windows

    operating system (the ty-

    ing product).

    Multiple intellectual

    property rights may be le-

    gally combined into bundles

    or packages. But, it has to be

    done right. There has been

    considerable judicial talent

    thrown at trying to come upwith bright line per se guide-

    lines making prediction pos-

    sible. There are some bright

    lines. For instance, illegal

    mandatory package licens-

    ing occurs when a patent owner refuses to

    license a particular patent unless a licens-

    ee accepts an entire package (or where the

    patent owners royalty scale has the same

    result). It would be helpful if courts had

    taken a consistent analytical approach

    to tying and bundling cases involvingintellectual property. But, they have not

    (employment insurance for lawyers).

    This has been the underlying impetus

    for the FTCs laying out a rule of rea-

    son approach to intellectual property

    bundling as is reflected in its Antitrust

    Guidelines for the Licensing of Intellectual

    Property (Antitrust-IP Guidelines). The

    Antitrust-IP Guidelines recognize that

    [c]onditioning the ability of a licensee

    to license one or more items of intellec-tual property on the licensees purchase of

    Tying and Bundling - Nice For Your Holiday Giving,Not so Much When Youre Licensing Your IP

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    IPaintProtecting the P&C Industrys Intellectual Assets

    another item of intellectual property or a

    good or a service has been held in some

    cases to constitute illegal tying. But,

    it also states that [a]lthough tying ar-

    rangements may result in anticompetitive

    effects, such arrangements can . . . resultin significant efficiencies and procompeti-

    tive benefits. In other words, if there is a

    good reason (i.e., considering the totality

    of the facts, commerce and free trade are

    promoted), courts can allow an otherwise

    illegal connections of separate pieces of

    IP. Is your head hurting yet?

    Pursuant to the Antitrust-IP

    Guidelines, a court can consider both the

    anticompetitive effects and the efficien-

    cies attributable to a tie. The Feds arelikely to challenge a tying arrangement

    if: (1) the seller has market power

    in the tying product, [which the Feds

    will not presume necessarily just be-

    cause the license involves a patent,

    copyright, or trade secret]; (2) the ar-

    rangement has an adverse effect oncompetition in the relevant market

    for the tied product; and (3) efficien-

    cy justifications for the arrangement

    do not outweigh the anticompetitive

    effects. If a package

    license is found to con-

    stitute tying, the Feds

    will evaluate it using

    the same rule of reason

    principles they use to

    analyze tying arrange-

    ments that do not in-volve IP.

    Whether the legal

    analysis applied to

    intellectual property

    bundling is some form

    of the per se rule or the

    more expansive rule of

    reason, it will be in-

    cumbent upon a plain-

    tiff to establish that a

    defendant has market

    power in the tying product.Market power is not gonna

    be presumed merely from

    the existence of a patent.

    Basically, the Feds

    will take this approach.

    Although the intellectual

    property right (lets say your

    patent) confers the power

    to exclude with respect to a

    specific product, there will

    often be sufficient actual or

    potential close substitutesthat prevent the exercise of

    market power. So, the Feds

    will investigate the relevant

    market to determine wheth-

    er the intellectual property

    at issue grants any market power in dol-

    lars and cents. Even if such market power

    is found, the Feds will further invest