Pigment Dispersion Market

Market Overview

The global pigment dispersion market size was valued at USD 23 billion in 2021 and is expected to reach USD 33 billion at a CAGR of 4% during the forecast period (2022–2030).

Pigment dispersion is the technique of combining a powder form substance (or pigment) with such a liquid. Each of the constituent substances of the powder form remains detached from one another and is uniformly scattered and blended in the suitable solvent. Organic pigments differ significantly from organic dyes; the intermediates, the manufacturing process, and the equipment needed to manufacture organic pigments are similar to organic dyes. Therefore, these pigments are commonly used and manufactured by the dye industries. Increasing population growth and higher per capita income drive the demand for paints & coatings in end-use sectors such as building & construction, consumer goods, personal care, automotive, and packaging. The global pigments market is likely to be driven by the increasing consumption of pigments in various end-use industries like paints & coatings, construction, automotive, textile, printing inks, and personal care.

Market Dynamics

Global Pigment Dispersion Market Drivers

Improved Consumer Preference for Brightly Packaged Food Products

The distributors, wholesalers, and retailers expect the manufacturers of perishable goods to provide products with an extended shelf life to avoid losses owing to fluctuating consumer demand. Shelf life can be extended in numerous ways, one by adding preservatives to perishable goods, which lowers the nutritional value of the food products. The second is to use an appropriate packaging style that retains the freshness of products and keeps them safe from environmental changes. Growing awareness among consumers regarding the ill effects of preservatives coupled with increasing buying power has resulted in customers demanding safe and hygienic foods in recent years. And the increasing competition creates a necessity for the producers to provide easier identification of clean foods.

Single-use food service packaging is one of the significant trends driving the food packaging industry worldwide and is one of the models through which global food companies serve food. Customers believe single-use packaged foods are protected from food contamination, non-toxic, and convenient to discard. The global food chains such as Burger King, Kentucky Fried Chicken (KFC), McDonald's, Sonic Drive-In, and others serve food items such as hamburgers, cheeseburgers, and snack items in single-use foodservice packaging.

The competition among these global food chains is rapidly increasing. Therefore, several food chains are using bright, aesthetically appealing packing materials to attract consumers and enhance their brand position in the market.

Increasing Utilization of Paperboard and Plastic Substances for Food Packaging

In recent times, paperboard and plastic materials are increasingly preferred in food packaging because of their affordability, ease of packaging, and preservation ability. Polystyrene, polypropylene, polyester, polyvinyl chloride, polyamides, polycarbonates, and polyethylene are the commonly used plastic materials. Due to the reduced price and ease of manufacturing, polyethylene is the most preferred food packaging material among plastic materials. Over half of the global packaging is made from paper and plastic materials. In 2015, the food & beverage industry was the second-largest plastic consumer. The food & beverage industry primarily uses plastic for manufacturing containers, bottles, and others. Paper and plastic offer several benefits, such as recyclability and sustainability, due to which they are widely preferred in the food packaging industry.

Global Pigment Dispersion Market Restraints

Strict Laws on the Use of Inorganic Pigments

Inorganic pigments are strictly regulated in many developing and developed countries such as the U.S., Canada, India, Germany, the U.K., Australia, and others. These pigments are perceived hazardous to health. Inorganic compounds contain toxic heavy metals such as chromium and cadmium, which are prohibited. When exposed to food substances, Cadmium compounds are known to cause cancer. Increased intake of cadmium food may harm the kidneys and lead to other health hazards. BASF Corporation discontinued the production of lead chromate pigments in 2014 due to toxic lead content. Lead chromate pigments find application in paint & coating and plastic industries. Approximately 60% of lead chromate finds application in the plastics industry, while 40% finds application in coatings. The restriction on lead chromate pigment has slightly impacted the market growth due to the unavailability of an alternative.

Global Pigment Dispersion Market Opportunities

Growing Interest in Organic Pigments

Most high-performance pigments are now manufactured of environmentally acceptable ingredients that pose little or no hazard to public health and wellbeing. As a result, the usage of high-performance organic pigments is expanding because they outperform traditional dyes in terms of lightfastness, chemical inertness, weather resistance, and heat resistance. They also have excellent colorfastness and insolubility. Because of these enhanced qualities, organic pigments are appropriate for industries such as automobile and decorative coatings that necessitate exceptional light and weather processability.

The production of organic dyes for specialized applications presents enormous growth potential for makers of pigment dispersions. Because of the growing global awareness about environmental protection and the restrictions set by various government organizations throughout the world, end customers prefer items that have environmentally friendly features and are less detrimental to health.

Regional Analysis

The pigment dispersion market is segmented into the Asia-Pacific, North America, Middle East and Africa, Europe, and Central and South America. 

Asia-Pacific is the dominant region, valued at USD 8,750 Million in 2021, and is expected to reach a USD of 13,400 Million by 2030 at a CAGR of 5%. The high proportion was ascribed to the area's cheap supply of raw resources and low-cost human resources, which drew firms from many sectors to establish production plants there. Over the projected period, the coatings industry segment is anticipated for the most significant proportion in South Korea. Increasing architecture activities and increased spending from the government on public infrastructure development are expected to drive the market in the region.

The North America pigment dispersion market was valued at USD 5,737 Million in 2021 and is expected to reach USD 8273 Million by 2030 at a CAGR of 4%. In North America, the U.S. contributed the maximum share to the regional pigment dispersion market in volume and revenue, with 80.06% and 82%, respectively, in 2021. The maximum percentage of the U.S. is attributed to numerous end-use industries coupled with the high buying power of consumers. The increasing amount of quick-service restaurants (QSRs) that employ pigment dispersion in food processing and printing ink activities is driving up the need for pigment dispersion in the United States.

Since several inorganic pigments turn poisonous when they come into touch with packaged foods, the United States government has tight laws regarding pigment dispersions that could be utilized in packaged foods. As per the FDA, compounds approved for application as food colorants can also be used as coloring additives in food processing and printing dyes. Pigments comprising heterocyclic aromatic compounds and benzopyrene in concentrations more than 0.5 parts per million and 5.0 parts per million are not permitted for use in packaged foods.

Segmental Analysis

The global pigment dispersion market share is divided based on product, application, and region.

Based on Product Type

The pigment dispersion market is segmented into organic and inorganic. The inorganic pigment dispersion was valued at USD 13,276 Million in 2021 and is expected to reach USD 19342 Million by 2030 at a CAGR of 4%. Inorganic pigment dispersion is generally lighter than organic pigment dispersion; also, applications demand higher durability. Hence, inorganic pigment dispersion is favored over organic pigment dispersion. The reason is that organic pigment dispersion fades away when exposed to sun rays, whereas inorganic pigment dispersion does not fade away when exposed to sunlight. In addition, inorganic pigment dispersion is more cost-effective than organic pigment dispersion. It offers more accessible dispersion properties on numerous substrates owed to its smaller particle size when compared with organic pigment dispersion.

Based on Application

The pigment dispersion industry is segmented into Plastics, Inks, Coatings, and Others. The coating segment was valued at USD 8,982 Million in 2021 and is expected to reach USD 12,840 Million at a CAGR of 4% by 2030. The coatings segment emerged as the largest application segment and is projected to continue its dominance over the forecast period. The growing building & construction industry in many developing economies is expected to drive the demand for coatings over the forecast period, thereby boosting the growth of the pigment dispersion market over the coming years.

Impact of covid-19

COVID-19, or the Coronavirus disease, has wreaked havoc, unlike any other pandemic the world has witnessed in over a century. Also, the forecasts of its impact on the global economy are unprecedented, with many experts comparing it to the Great Depression of 1929. The United Nations Conference on Trade and Development (UNCTAD) quantified the impact at a staggering USD 1 Trillion.

Lockdowns across industries globally brought manufacturing activities to a grinding halt in most industries worldwide, further resulting in a significant drop in the demand for the product. Thus, the recent outbreak of COVID-19 in countries such as Italy, France, Germany, and Spain is anticipated to hamper the need for the development in the building & construction and other end-use sectors in the near future. In addition, the surging raw material prices and stringent European Union regulations are further anticipated to hamper the market's growth in the upcoming years.

Market Recovery

The distribution system was negatively affected due to the suspension of manufacturing plants caused by detentions implemented in the bulk of nations worldwide. Furthermore, domestic and foreign restrictions on travel, quarantine regulations, and confinement slowed the shipment of manufactured parts already on their way. Major players, in particular, are involved in adopting initiatives such as strategic partnerships, mergers & acquisitions, and joint ventures to vertically merge across the value chain.

Recent Developments

• In October 2020, Flint Group announced the acquisition of Poteet Printing Systems LLC. This acquisition will assist the company's paper and board business growth across the North American region.
• In June 2021, Heubach GmbH partnered with S.K. Capital Partners announced that it acquired Clariant's Pigments Business. This combined business will work under the Heubach that will manufacture pigments that generate over Euro 900 Million.
• In March 2019, BASF SE partnered with Landa Labs to introduce its second stir-in pigment, eXpand! Blue (EH 6001), sold under the Colors & Effects brand. eXpand! Blue (EH 6001) is used in automotive coatings and outdoor coating applications. The company displayed its new product at European Coatings Show, held between March 19 and March 21, 2019, in Nuremberg, Germany. The success of its previous product, eXpand! Red (EH 3427) compelled the company to launch an additional color (blue color) to its product portfolio to drive the company's sales and increase its revenue.