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The number of competitors within the industry has varied according to the
general buoyancy of the economy as a whole. As a mature product, sales of
paint closely reflect the overall rate of national economic growth. In the mid-
1980s, the number of UK producers peaked at over 330, but this number
reduced to around 250 during the recession between 1991 and 1993 due to
falling demand from industry, local authorities, and the DIY (Do It Yourself) sector
and construction companies. Between 1993 and 2000, the number of paint
companies increased again as the general demand in the economy increased.
Decorative paint producers are keenly aware of the need to keep prices as low
as possible because, in addition to consumers having a choice of many different
paint producers, the major benefits of decorative paint can be met using several
alternative materials.
The basic ingredients of paint fall into three chemical categories. Resins
(also called binders or vehicles) are typically synthetic polymers that bind
together other components and also provide the mechanism by which the paint
sticks to a substrate and provides weather-ability. Because most binders are
derived from oil products, the costs to paint manufacturers are, in part,
dependent upon the market rate for crude oil. The second category – pigments
and extenders – are typically dry powders that are dispersed into the vehicle and
provide colour, opacity and some chemical properties such as anti-
corrosiveness. These compounds are also subject to variable market prices
Table 1
Selected results for UK-based decorative paint companies for year ending 2000
(includes international and export sales)