Show t t i I. I NS N'S e IIi II i I Paint Industry V I I Paint sales are generally broken down into two categories categories categories cate cate- gories trade and industrial TRADE SALES consist of paint s sold ld to consumers consumers- contractors and professional 1 painters for new construction and for repainting refinishing refinishing refinish- refinish refinishing ing and maintenance Industrial sales consist of coatings sold to manufacturers for application during the manufacturing stage of a product UNTIL RECENTLY trade sales had been more important im im- important port ant in the paint industry's growth However future sales of industrial coatings should surpass sales of consumer paints by a considerable de de- gree The superior growth projected projected projected pro pro- for industrial coatings is based on 1 the overall growth of U. U S S. S industry and 2 the technology of coatings which is moving ahead so rapidly that paints are being used on surfaces unheard of a few years ago such as the finishes on space vehicles ALTHOUGH the automotive appliance and furniture industries in- in industries industries in in- consume the greatest volume of industrial paints each year uses range from coating the inside of food and beverage cans to the thin film of varnish on motor armatures Rebounding From 1967 Growth in the paint industry industry industry in- in in in- in recent years has been steady and reliable though the rate has been unspectacular Despite being being being be- be ing an integral segment of i ithe the building industry the i i 1 paint field tends to resist downturn phases in new construction construction construction con con- because a large part of spending on paint is for maintenance and renova renova- tion WEATHER conditions however however however how how- ever can adversely affect paint consumption in a given ye year ar Thus in 1967 when poor weather conditions combined with a relatively unenthusiastic automobile year paint sales rose but a sub-par sub 3 percent well below the usual 4 per- per cent 5 percent year-to-year year increase WITH COSTS up sharply earnings for many paint manufacturers declined On the whole 1968 was a much better year for the paint in industry industry industry in- in although substantial spending on expansion and modernization ir stead instead of new building along with the surtax surtax surtax sur sur- tax depressed earnings for some of the industry leaders The Outlook Color It Rosy Indications are that 1969 will be a good year for the paint makers Industry leaders leaders leaders lead lead- ers are estimating that trade sales will rise from 1 billion billion billion bil bil- bil- bil lion in 1968 to 11 billion this year with water-based water paints increasing their share of the market from 60 percent percent per per- cent ent to 70 66 percent per per- cent NEW PRODUCTS such as fire retardant finishes and coatings for finishing factory-finishing of modular-house modular units should also contribute to improved results Looking further ahead expected expected expected ex ex- growth of the econom economy I eI increased consumer spending spending spending spend spend- I ing and prospects of a building building build build- I ing boom in the in indicate indicate indicate in- in that good gains are likely for the paint industry FOR representation in the paint industry over the next few years the Babson's Reports Reports Re Re- ports orts staff feels the following following following follow follow- ing companies have interesting interesting interesting in in- investment possibilities possibilities possibilities Williams Sherwin-Williams is the nations nation's largest producer of paints and varnishes Recent results have been adversely f r affected by up start-up costs and higher interest costs FISCAL 1969 year ends August 31 earnings are not expected to show significant improvement over the earned in fiscal 1968 but the outlook for fiscal 1970 and beyond is promising National Lead manufacture ture of the well-known well line of Dutch Boy paints and pigments is the country's largest manufacturer of products products products pro pro- ducts in which lead is a basic material it is also prominent prominent prom prom- prominent in nonferrous die cast cast- ings Absence of last years year's strike better margins on titanium dioxide operations and a leveling off of startup startup startup start start- up costs at new plants should result in improved 1969 profits I II I COOK PAINT Varnish I makes paints varnishes enamels enamels enamels enam enam- els lacquers synthetic resins and waxes as well as pre- pre finished plywood and wallboard wallboard wallboard wall- wall board and printed hardboard Poor weather and rising costs are hurting this years year's I sales and earnings but good range long-range prospects make 1 the stock worth watching as asa a rebound candidate |