Some other architectural coatings companies choose to expand their production
capacities in order to build economy of
scale and introduce new coating products
into the market. Guangdong UNZO put
their 100,000 tons per year architectural
coatings production lines into operation in
the second half of 2014, and now the company can produce a variety of new architectural coatings, such as stone paint and
multi-layer elastic coatings. Conversely,
Shandong Puntium Paint is building their
500,000 tons per year water-based architectural coatings capacity since 2012. To
achieve this target, Puntium is trying to
get financing from the National Equities
Exchange and Quotations, a new stock
trade market focusing on helping the financing of middle and small companies in
China. In fact, over 20 coatings companies
are listed or are trying to be listed in the
new stock trade market in China since the
new market system was launched.
While, other architectural coatings com-
panies try to build closer business alliances
with real estate companies. For example,
Skshu recently signed an agreement of
forming a strategic cooperation alliance
with Gemdale, one of the largest real estate
companies in China. The new agreement
secures Skshu’s position as the exclusive
exterior architectural coatings supplier for
Gemdale real estate projects build from
2015 to 2017. The benefit for Skshu is se-
cured business in three years with one of
their major customers, and for Gemdale,
probably low price and better service.
No coatings agency might
be needed in the future
A new trend in China may be noted as
a result of an internet-based decoration
company that has aggressively entered
the market in early 2015. ikongjian.
com, also called Mi decoration in the
market, the same name as the brand
name of China’s fastest growing mobile
phone(although denied to have real busi-
ness relationship by the top executive of
the mobile phone brand recently), has
disrupted the decoration market order
now. Ikongjian competes with tradition-
al decoration companies with its low
price (699 yuan per square meters) and
fast working schedule, targeting mainly
the customers of the millennial genera-
tion through its website. Now the con-
struction materials producers, including
coatings producers are paying close at-
tention to the new market trend. If most
of the customers buy in to this new ser-
vice module, the coatings’ value chain
and distribution channel will be rewrit-
ten soon.
The competition in China’s architectural coatings market will be even fiercer
due to the slowing down of the real estate
market. The advantage of foreign brands
in the market is not to be swayed easily
by relatively new domestic brands, so consolidation and M&A as a result of market
competition might happen more frequently in the next two years in the architectural coatings industry. For consumers, this
might not be a bad scenario. CW
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