Coatings World - October 2012

Jotun recently opened its new state-of-the-art powder coatings factory and regional research and development (R&D) facility in China. From left to right: Morten Fon, president and CEO, Jotun Group; Bjorn Naglestad, general manager, Jotun Coatings China; Xu Jian Bo, Zhangjiagang Government; Bian Dong Fang, Zhangjiagang Mayor; Odd Gleditsch, chairman of the board of Jotun Group; Yao Ling Rong, Zhagnjia-gang Government; Esben Hersve, group executive vice president, Jotun Coatings; Martin Chew, group executive vice president, Jotun Powder Coatings; Dong Zhao Ming, general manager, Jotun COSCO Marine Coatings (Qingdao) Co. Ltd.; Olav Marstokk, operations director, Jotun Coatings Zhangjiagang; Julia Zhu, business director, Jotun Powder Coatings China; and Mike Wu, project manager, Jotun Powder Factory.

at approximately 7.2 kg, indicating that there is still considerable potential for the market to grow further and penetrate into the more underdeveloped regions of China.

The Chinese coatings industry continues to be highly fragmented, with as many as 20,000 manufacturers active in the market, albeit on a very small scale for many. Future consolidation is highly likely as smaller players get pushed out through environmental pressures and demand for more high quality products from the end-users.

The key opportunities for future growth in the market will arise from factors such as: the 18th Congress of the CCP (Chinese Communist Party) that was held in October 2012 and there will be pressure on the new leadership team to introduce measures to stimulate the economy after many government incentives were pulled in 2011; the Chinese government’s affordable housing program plans to build 36 million new affordable dwellings over the next five years; huge regional disparities remain in China, with rural areas offering opportunity for infrastructural development and as yet untapped consumer demand; rising car ownership, poor road conditions and a very low scrappage rate will all boost demand for automotive refinishes; the Chinese end-user industries will be looking for coatings offering environmental benefits and safety features (like lead-free, VOC-free, formaldehyde-free etc.), plus more functionality, in order to meet stricter standards (particularly for products destined for export) and serve the needs of discerning consumers (especially the younger generations); and offshore engineering schemes and infrastructure development will bolster sales of marine and protective coatings.

Paint majors build new plants to meet rising demand AkzoNobel is planning to invest around € 60 million to increase the production capacity of its automotive and aerospace coatings business in China. This investment will provide additional momentum for the company’s accelerated growth strategy of achieving revenue of $3 billion in China by 2015, and strengthen AkzoNobel’s leadership position in the country’s automotive re-

finishes market.

As well as constructing a new production facility in Changzhou, the company will build related warehousing, quality control laboratories, support facilities and offices on the new site. The project will increase capacity by around 25 million liters and the site is projected to be operational in early 2014.

“This investment builds on last year’s acquisition of Prime Au-
tomotive and is all about meeting rapidly increasing customer de-
mand,” said Leif Darner, AkzoNobel’s executive committee
member responsible for performance coatings. “We are also seizing
an ideal opportunity to further strengthen our leadership position.”
“The automotive and aerospace market in China is forecast
to further increase steeply in the coming years and this invest-
ment will allow us to capture our share of this growth,” said Jim
Rees, managing director of AkzoNobel’s automotive and aero-
space coatings business. “Changzhou is the ideal location for this
facility as there is a good infrastructure already in place and it is
ideally situated in the coatings ‘center’ of China, with close access
to many of our customers.”
AkzoNobel currently employs around 6,700 people in China,
with revenue for 2010 totaling €1.3 billion, with a majority of the
revenue generated from local demand. The new site in Changzhou
will be the company’s 29th manufacturing location in China.

AkzoNobel’s powder coatings business, Interpon, opened its first Powder School in China, offering customers an opportunity to learn from their experts and improve the efficiency and productivity of their powder application lines.

The Powder School is a service that offers customers hands-on training in powder application, product testing and troubleshooting support, as well as opportunities to learn how to get the best out of their production lines. Located within AkzoNobel’s Powder Coatings Application Center in Ningbo, Zhejiang province, the Powder School runs one and two-day courses every month.

The Powder School also offers an opportunity to partner with customers in a hands-on environment to develop new powder applications and to showcase the latest developments in powder coatings technology.