Powder Coating's Future
There for a time, powder coating shops were popping up on every corner. Now it seems everyone has figured out that margins are extremely tight and that powder coating is not as easy as the guys who sell it might like for you to believe. What do you think the future holds for powder coaters?
Q. There for a time, powder coating shops were popping up on every corner. Now it seems everyone has figured out that margins are extremely tight and that powder coating is not as easy as the guys who sell it (at roughly triple the price I paid just a few years ago) might like for you to believe. What do you think the future holds for powder coaters? In an American economy where manufacturing seems to have left or to be leaving, can you offer a little hope for those of us still in the trenches? J.D.
A. First of all, I am surprised that you characterize the cost of powder as triple what you paid not long ago. In 2005, the average price for a pound of powder in North America was $2.50. In 2011, the average price per pound was $2.63. Maybe you are using some high-cost products in low volume? Anyway, the price has gone up based on the increases in raw materials, so I understand that is a pressure on your business.
As far as manufacturing leaving, that has been an issue for some time now. However, manufacturing in the U.S. is alive, and some sectors are growing. In the past several years, I have worked on several large projects where U.S. manufacturing was adding on or bringing in work from other countries. The demand is there, but there is still pressure on manufacturing from foreign competition and from the trend of investment dollars increasingly being funneled into financial instruments instead of building. Still, powder and equipment suppliers are busy, and manufacturing is playing a steady role in the gradual improvement in our economy. The Institute for Supply Management reported that manufacturing grew in October for the second straight month. The previous three months had shown some contraction, but prior to that economic activity in the manufacturing sector had expanded for 34 straight months, and overall economic activity had expanded for 41 straight months.
As far as an individual coater is concerned, the overall picture is less critical than some personal experience. I suggest you keep up the good effort. Work with your suppliers if powder cost is too high, or find new suppliers if that is possible. Test powders to see what works best by cost per applied square foot, not cost per pound. Work on efficiency and look for waste. Look for service too. Selling is only part of the job; you need support to help you be your best. Work on application efficiency and get involved with associations and events that help you expand and build connections. Check out the Powder Coating Institute and consider becoming a custom coater member. Look at the Chemical Coaters Association International and see if there are opportunities for education or networking. Check out growth sectors like agriculture and electronics, and see if anyone in your area needs coating help. Look for good margin on projects and avoid going for the same work everyone else wants.
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