In the last few weeks, we saw two huge announcements regarding the pigment industry. First, DIC Corporation, parent company of Sun Chemical, expects its acquisition of BASF Colors & Effects to be completed by June 30, 2021. The acquisition was first announced back in 2019; the purchase price was €1.15 billion $1.34 billion). DIC reported that BASF Colors & Effects sales were approximately €1 billion ($1.2 billion) in 2018, with a corresponding EBIDTA of €120 million. At the time of the merger, BASF Colors & Effects had 11 facilities and 2,600 employees.

The second announcement was that Heubach Group, in partnership with SK Capital, had acquired acquire Clariant’s Pigments Business. The combined business will operate under the Heubach name, creating a global pigments leader generating more than €900 million ($1.09 billion) in annual sales. Closing of the transaction is subject to customary conditions and approvals and is expected to take place in the first half of 2022.

The transaction values Clariant Pigments at approximately CHF 805 million ($900 million). Clariant will be reinvesting for a minority stake in the combined business. Interestingly, Heubach is the smaller company, with four production locations and approximately 1,000 employees. Clariant Pigments has 13 worldwide production sites and approximately 1,900 employees.

Estimates place the global market for pigments at roughly $20 billion, and Smithers Rapra has the demand for high-performance pigments at $7.6 billion in its report, “The Future of High-Performance Pigments to 2025.” Pigments are a big industry.

All of this set me to thinking about the changes we have seen in the pigment industry over the past two decades. I joined Ink World in June 1998. DIC/Sun Chemical, BASF, Clariant and Heubach were four of the largest pigment manufacturers around at the time. There was still a lot of pigment production in the US and Europe at the time; the Asia-Pacific region was growing fast and is the largest producer of pigments today.

Looking back at the Ink World Buyers’ Guide from 2000, there were many more companies in the pigment industry, and many of these long-time industry leaders are no around.

There were a bunch of smaller companies back then that are no longer part of the landscape, incuding General Press Colors, Magruder Color, Max Marx and Daicolor Pope, among others.

There are pigment companies that are still around, but in a different form. The best example I can think of was CDR Pigments & Dispersions. That would eventually be renamed Flint Group Pigments, which now is a captive seller. Dominion Colour and Lansco recently came together to form DCL.

There were also sizable pigment companies that were acquired years ago. Perhaps the most notable is Ciba Specialty Chemicals (bought by BASF back in 2008). BASF also bought Engelhard back in 2006.

The two mergers this year are particularly noteworthy as BASF and Clariant were two of the largest pigment companies worldwide, and have been so for a long time. Both companies were looking to divest on order to focus on their respective core businesses, of which pigments no longer were considered.

At the end of the day, this is the most sizable shakeup and consolidation we have seen in the pigment industry, creating two large pigment companies. Still, the industry remains fairly fragmented, as there are numerous suppliers in the Asia-Pacific region, particularly in China and India. What the impacts are remain to be seen.