The coatings industry is a critical part of UK manufacturing; almost £300 billion GDP depends on BCF members’ products. 300,000 people are working with BCF members’ products across the UK supply chain. 721 million litres of paint is sold annually; more than half of that is decorative paints.
BCF membership is a mix of UK SMEs and multinational companies. There are over 30 BCF members that manufacture printing inks, and 8 wall covering manufacturers. Associate members include raw materials suppliers, through to equipment suppliers, packaging manufacturers and companies supplying testing services. Membership has doubled since 2010.
23rd March was the start of lockdown, a huge shock to everybody to work out how to respond. The first week after lockdown was announced, confusion reigned. The Government’s message was very clear – stay at home and save lives. Many sectors were told to close by the government – this did not include chemicals, coatings, or ink manufacturers. But the Government message was unclear; what the Government probably should have said was “stay at home, unless you can’t work from home, and your workplace is still open, in which case, go to work”. It took some time to get this message across, and the BCF spent quite a lot of time getting clarification on this, so that the industry could confidently stay open. A key worker letter was created, so that companies and their employees could provide evidence to the police if they were stopped, to show that they were going to work, and that employees were making an essential journey. The BCF also created a letter for member company decorating sectors; police were visiting decorating centres asking why they were still open, so the legality of that needed clarification as well. The BCF was concerned that although manufacturing remained open, the sector may not stay open, particularly if the crisis deepened, and the BCF spent some time lobbying to ensure that manufacturers could stay open, and that was done by reminding government officials and the Secretary of State why coatings were essential; members were making essential products to support the critical infrastructure in the UK. The BCF wrote to the secretary of State on 31st of March and compiled a 2-page fact sheet that outlined the essential nature of the coatings industry. Why are coatings essential during a crisis like the one we are in? There is a lot that our industry does that was very important during the crisis. The BCF started the #essentialcoatings #essentialinks campaign on social media. Examples of what member companies were doing during the crisis included making and donating hand sanitizer to the police, local care homes and frontline workers; making fungicidal and anti-bacterial coatings to upgrade temporary accommodation used to house the homeless; powder and liquid coatings for hospital beds, ventilators, and oxygen bottles; decorative anti-bacterial paints in the Nightingale hospitals, electrically conductive coatings to create touchless interfaces for offices, paints for housing, social care, education and healthcare, and sourcing and donating additional PPE for hospitals and care homes. Liquid printing inks were critical to meet the demand for additional inks for food packaging. Some members event converted manufacture to produce 3D printed face shields or coatings for the cough and sneeze screens that are now prevalent around the country. Companies are also developing and researching antiviral coatings; the BCF is really excited about the possibility of these coatings to help reduce the spread of the virus, and perhaps in future outbreaks.
One of the challenges for making printing inks for food packaging, is that ethanol that is used in solvent-based flexo inks, which are used on 50% of food packaging, and ethanol is also used to make hand sanitizer, which is critical for the NHS. So while not suggesting that ethanol should be diverted from hospitals, the BCF wanted to make government aware that some supply was needed for printing inks.
An alliance across the printing industry supply chain was established who put together a press release, and wrote to the Business Minister Minister Zahawi, and there was a reply within four days. The BCF’s concerns were passed on to DEFRA, who are the responsible department for the food industry, and subsequently also lobbied George Eustice, the minister in DEFRA, and outlined why it was important to keep the food packaging supply chain open. The good news was that through the crisis, there was some relief in ethanol supply, but prices were 3-4 more times higher than normal. BCF asked for a slow down in non-essential regulations, and on the 24th of March the BCF wrote to the Health and Safety Executive to ask for a regulatory pause and some relief, particularly in biocides labelling, because there was still significant work to be done particularly on the labelling of paint products containing MIT in the marketplace. The HSE did give reassurance that they would take a pragmatic approach through the crisis.
Many millions of people were stuck at home in lockdown with nothing to do; 8 or 9 million people were furloughed, which led to a huge surge in interest in home decorating. Because B&Q and most of the large DIY stores were closed for most of April, value retailers like B&M were open in April but were selling out of paint, and so people were trying to buy paint online and the paint industry is not really set up for online sales. Only 5% of paint transactions are typically online, there are no Amazon-scale fulfillment facilities in the paint sector, so there were significant challenges for the industry to satisfy the challenge of the demand for product from the public in this period. Google searches for paint had a huge 5-fold surge in April. There was a huge increase in Google searches for paint in France, Germany, Spain and the UK; a 5-fold increase in the UK in April. The BCF website had a 70% spike in visits during March and April; mainly because there was a page to help the public find out where they could buy paint online. The BCF also promoted using up the leftover paint that people have at home, through the Paintcare scheme.
Supporting members was a critical part of BCF’s role. To do that the BCF had to really understand what members’ concerns were. There were weekly emergency calls with BCF directors – there are 25 directors from member companies. For the first 8 weeks there were weekly calls, these are now bi-weekly. The most useful part of the calls was companies sharing their experiences – current operational status, supply chain challenges, best practice, and social distancing in manufacturing.
One of the critical things that was identified early on was the need for the furlough scheme to be flexible – now available for part time furlough, and rotational furlough was well received and the BCF pushed for this. The BCF created a coronavirus information hub on the website from 8 April, to share information with members on the tools and support mechanisms in place.
Exploring how antiviral coatings can help in the fight against Covid-19 is exciting. With the RSC through their Surface Coatings Industry Group, a webinar was organized on 16 April which Tom Bowtell co-chaired with Stuart Clarke from Cambridge University. 150 people from different sectors came together to discuss the state of play of antiviral coatings; looking at some of the challenges and connecting people to move things forward. Addenbrookes hospital talked about where antiviral coatings would be useful in the healthcare sector, and other areas of interest were discussed, including ppe, door knobs, lift buttons, Care homes, public transport, publications and packaging, textiles, clothing and transport; all these use coatings. To put these kinds of products on the market, they have to be tested, and that’s one of the key challenges that BCF has helped with.
Antiviral coatings; you need the right kind of coating in the right area. One of the key outcomes of the webinar is that Cambridge University have committed to a new efficacy test for Covid-19. There are very few facilities in the world that can offer testing of this kind. The BCF has worked with the HSE to establish a fast track regulatory approval process for any products that have got through that testing process. The BCF will also monitor any non-approved antiviral coatings on the market and refer them to HSE.
Impact on coatings and printing industry sector.
Make UK latest numbers (3 July) show that the impact of covid19 on manufacturing has been significant. Over a quarter of firms have furloughed between 25 and 50% of their staff. More than 40% plan to make redundancies in the next 6 months. Over 40% have seen orders fall between 25 and 50%. 44% plan to continue with apprenticeship training.
Impact on coatings
There are definitely winners and losers: the growth in DIY means that the retail paint and woodstains sectors have done well. Printing inks for food packaging were in greater demand because people were eating in more and buying food from supermarkets. Sales in industrial coatings have dropped by 35% in April and 37% in May. Professional decorators and construction coatings have been badly hit; 50% down in April, 20% in May.
Printing inks for newspapers have seen a 70% drop in output; this crisis has brought forward the switch to digital by several years.
In the retail paint market, sales are at a height that they have not been at for over three years, with a 28% increase in May. On the other hand, trade decorative paint has dropped considerably. Woodcare sales have grown, and there has been a significant drop in industrial coatings. So year to date, paint sales are 2.2% down. The impact of the crisis really does depend on which sector you are in. BCF conducted a quarterly confidence survey. 36 companies took part, most were small companies; half were industrial players, 9 were decorating, and 8 were printing ink companies. Overall, confidence has plummeted. The index is down to 37 from an average of 71. Even when companies were worrying about a no deal Brexit, the lowest point was 58.
Members were asked about their forecasts for the second half of the year, and the results are very much dependent on which sector you are in; in decorative coatings, 67% of those companies expect growth, whereas 95% of industrial companies predict lower sales. Smaller companies appear to be hardest hit with 76% of smaller companies expecting sales to drop and 42% of medium sized companies expecting lower sales.
Most people think it will take at least 18 months or a year beyond that to get back to where the sector was pre-covid. 6% of people don’t think the sector will ever get back to where it was. The BCF’s view is that it will be a long, slow recovery. Positive things from this survey are the comments on employment – 47% of companies said there would be no change in headcount and 20% of companies felt that the decrease in staff numbers would be small.
Forecasts on the global impact of Covd-19 on coatings industry across the world show a 2.3% drop in coatings sales. Latin America and North America will be hardest hit. Asia got into the crisis first and out of it quickest and will be least affected. In Europe there is a 2.3% decline; the impact really does depend on which sector you are in.
Just to summarise; the coating and printing inks sectors are essential to the UK, both to the economy and society. Most BCF members did manage to stay open through the crisis but with significantly reduced volumes. There were very few Covd-19 cases across membership, possibly due to the very responsible working practices of the members. The government spent a lot of money supporting industry, the furlough scheme was widely used, and the flexible furlough scheme was much appreciated. The BCF hope that antiviral coatings will play a part in future outbreaks.
The outlook for the future will be linked to GDP growth; when the economy is back on the road, the coatings and inks sector will also rebound. This is a resilient sector.
Tom Bowtell, Chief Executive, British Coatings Federation, webinar delivered for Surfex, 9 July 2020