growth and ACC will track that growth.
An important component of ACC market
is also growing. This market includes ship
and container manufacture as well as
metal bridges, offshore oil platforms and
coastal port construction all driven by an
expected annual growth rate for 2010 of
more than 30 percent. China's maritime
anti-corrosion coatings market size could
reach 10 billion Yuan (approximately
USD$1.5 billion).
The Big Guys Are
Already in China
Over the past two decades an increasing
number of global players in the coatings
market have established base inside
China. This is true for raw material producers and formulated coating/ink systems. Some of those who are investing in
the future of China are mentioned below.
BASF will invest in a dispersions plant
in Daya Bay Petrochemical Industrial Park
in Huizhou, China. With an annual capacity of 100,000 tons, the new plant will
produce XSB dispersions for the paper industry and acrylic dispersions for industries such as coatings, construction,
printing and packaging, and adhesives.
The facility will benefit from local availability of raw materials and proximity to
key customers who serve Asia’s fastest-growing consumer markets. Production is
scheduled to begin in the first quarter of
2012, subject to government approval.
The investment is part of BASF’s growth
strategy for Asia-Pacific, which has the
goal of doubling sales by 2020.
Taking advantage of the phenomenal
growth in the automotive arena, PPG has
continued to expand its presence in China.
In 2008, PPG acquired Bonny Coating-Made Co., Ltd., a private automotive
coatings business in Guangzhou. PPG
now owns all brands, the customer list,
trademarks, technology and working capital of Bonny. The acquisition extends
PPG's distribution network and customer
base in China. PPG produces automotive
coatings in China for customers such as
General Motors, Mercedes-Benz, BMW,
Dongfeng Peugeot Citroen, Chery and
Hainan Mazda.
Valspar recently expanded its global
automotive color operations by opening a
20 | Coatings World
China
color technology center in Shunde, China.
Establishing a color technology center in
this location enables Valspar to offer more
service options to its automotive customers in Asia Pacific and Australia.
A new DuPont laboratory and manufacturing facilities in China are accelerating the adoption of coatings with
improved environmental performance by
Chinese automakers. DuPont's technical
center, located in Shanghai, and the manufacturing operations in Changchun allow
nearby DuPont scientists to respond to
local customers' needs quickly and efficiently. Shanghai General Motors uses advanced DuPont finishes, made in China,
on its Cruze model.
AkzoNobel inaugurated a new Powder
Coatings Technology Centre in Ningbo,
Zhejiang province. This R&D center has a
state-of-the-art laboratory and will have
an initial team of 20 scientists and technicians organized in centers of expertise for
the strategic market sectors. The new facility is located at the existing AkzoNobel
powder coatings manufacturing site in
Ningbo. All the centers of expertise—
automotive, architectural, furniture, domestic appliance, IT and general
industrial—and their corresponding marketing teams will be located at the center.
Kansai Paint constructed an automotive coatings plant in Guangzhou, and has
created a system to respond to the expanding automobile market in China for
the area ranging from Shenyang and Tianjin in the north to the Guangzhou region
in the south.
What About the Future?
Not all of the achievements by China have
been positive. For instance, China passed
the U.S. in 2006 to become the world’s
largest emitter of greenhouse gases, which
some scientists believe contribute to global
warming. But China also has an ambitious
program to cut the energy it uses for each
unit of economic output by 20 percent by
the end of 2010, compared to 2006. To do
this, China will have to change a long history of bad industrial practices.
Based on recent trend changes in the
market it is likely that China will see an increase in the use of water-based coatings,
powder coatings and high solids coatings.
A number of emulsion/dispersion producers have manufacturing facilities inside
China. In the industrial coatings market
there is still a need for high performance,
environmentally friendly systems. In the
architectural/decorative markets there is a
need for systems that are able to qualify as
genuine “green label” products and possess low-VOC, high-solids input with superior weathering resistance.
Conclusion
Although an ancient country, China is still
evolving into a modern economy and society. Somewhat similar to human development, China has entered into early
adulthood but not all parts have progressed at the same speed. China has developed a highly dynamic economy based
on strong exports and a thriving domestic market. This has been accomplished in
a remarkable short period of time. Investment in infrastructure development has
been timely and appropriate. However,
even with all this amazing economic success the country is still relatively poor
when you compare its per capita income
with its neighbors in the Asia Pacific arena
or the U.S. and Europe.
China has an authoritarian government that is capable of taking decisive action to stimulate the Chinese economy,
build new projects and invest in specific
industries. There is no doubt that the Chinese coatings market will continue to
grow at rates not seen in the rest of the
world in decades. If any participant in the
coatings industry supply chain wishes to
be a true global player it is imperative that
they have a presence in China.
However, it is not easy entering the
Chinese coatings market. There are many
competitors and the market isn’t well developed. Additionally, concerns about raw
material availability, paint quality, paint
specifications and routes to market are
formidable obstacles. The Chinese coatings market is not for the timid or weak of
heart. It will take enormous commitment,
resolve and patience to build success.
There are no quick wins in the Chinese
coatings market. However, the long-term
gain from investing in China more than
justifies the sacrifice demanded in order to
achieve success. CW
