Canadian Finishing & Coatings Manufacturing Magazine - May/June 2023 - 16

PLATING AND ANODIZING: INDUSTRY OUTLOOK
POISED FOR
GROWTH
The Electroplating Industry is expected to grow as downstream
demand reaches a point of stabilisation
BY MIKE BLACK
ost are familiar with some of the geopolitical
tensions that exist in the world today. Russia's
invasion of Ukraine and the still lingering
effects of the Covid-19 pandemic have led to oil,
metal, and commodity prices being extremely volatile over
the last number of years. Many manufacturing industries
rely on gas and fossil fuels to operate heavy equipment
and machinery, and it is likely this will cause operational
expenses to remain high. The rising metal prices will also
contribute to overall expenses as metals are crucial materials
for the electroplating sector. And while the rising interest
rates do add some uncertainty to the level of demand for
construction and its related activities, they also increase the
cost of borrowing and discourage investment into capital
projects or beginning new projects. However, this promotes
an environment that will thrive on creativity in finding new
ways to cut costs.
M
Although recovery from the pandemic did induce lows,
the revenue figures from the plating industry represent a
huge recovery starting in 2021. Some estimates will show the
Canadian metal treating and plating industry contributed just
shy of $1.9 billion in revenue for 2021. This was after a period
of annual decline from 2016-2021, which saw an annualised
average decline of -4 per cent with a sharp decline of 9.5 per
cent in 2021 alone. But according to IBIS World, a turnaround
in the period of 2021-2026 has already started with growth
estimates reaching almost 3 per cent per year until the end of
this period amounting to $2.2 billion.
Some of the restraints that may limit opportunities would
include the high cost of electroplating equipment, stringent
environmental conditions that have been imposed on the
industry which are limiting to the market, the high energy
consumption, and the cost of that energy.
The predicted revenue growth will be achieved through
the forces of some key external drivers. The overall demand
from manufacturing will continue to grow and this helps
sustain the electroplating industry. The world price of steel
and base metals commonly used in electroplating (zinc,
copper, nickel, etc.) are expected to introduce savings that can
be passed down to consumers, helping to stimulate demand
even more. The renewed demand can be expected to provide
existing industry operators with incentives to utilise a higher
industrial capacity.
Metal treating services are used by many manufacturers
across different industries, increasing the industrial capacity
utilisation will translate to greater demand for the services
provided by the finishing industry. Investments in both
residential and non-residential construction contribute to
16
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Canadian Finishing & Coatings Manufacturing Magazine - May/June 2023

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