in previous years. Yunnan province is
China’s 17th provincial level region to
impose fees on the disposal of VOC
pollutants, following Beijing, Shanghai,
Jiangsu, Anhui, Hunan, Sichuan,
Tianjin, Liaoning, Zhejiang, Hebei,
Shandong, Shanxi, Hainan, Hubei,
Fujian and Jiangxi. And these regulations mainly affect the operations of
those companies in the chemical, packaging, printing and solvent-based coatings industries.
Motivation also Comes
from Concentration of
Certain Industries and
Improvement of Production
Efficiency
Not only green technologies are adopted faster but also some specialty products are industrialized more quickly in
China. The motivations behind could be
many. One reason is that production capacities of electronic devices are mainly
in East Asia. This explains why some
technologies and their related products,
such as silicone adhesives and coatings
and polyimide tapes, become popular in
China first, and the current trend is that
these products are flooding back to the
American market.
Norman M. Kanar, Americas Area
market manager for Release Coatings
and Pressure Sensitive Adhesives, Dow
Corning Corporation, said in his report that Silicone PSA users in Asia
will be significantly increasing the
use of platinum curing PSAs. In the
Americas and Europe, however, use
of platinum curing PSA is projected
to remain flat, while use of peroxide
cure silicone PSAs continue to grow.
BPO, a hazardous chemical, is widely
used as the crosslinker in silicone PSA
tapes’ production in America. But the
extra investment for changing the
coater could be significant, so without
extra demand from the customers or
the pressure of new regulations, most
American companies do not want to
produce platinum curing PSA.
Besides, solvent-less coatings and UV
curing technologies are widely explored
in the production of printing, furniture
and plastic products.
Only Two Choices Left for
Small and Medium Sized
Coatings Companies
With overcapacity getting worse and with
the price of raw materials continuously
rising up, the coatings market is evolving
quickly. Many small and medium sized
coatings companies are closing their factories or retreating from the market. Only
the coatings companies who can differentiate themselves and position themselves
accurately in a niche market can survive.
On the contrary, large coatings companies are still expanding their footsteps in China. For example, SKSHU
is in the process of listing their stock in
the market. In the first half of 2016, the
company’s revenue was increased by 27
percent over the same period of last year.
In addition, the company is building a
new coatings production base in Sichuan
province. The concentration of production capacities in large coatings companies will put more small companies in the
brink of bankruptcy. Focusing on winning a niche market is the only way out
of this fierce competition for small coatings companies.
Unlike manufacturing industries, ser-
vice industries will still grow in China,
and the prospect for environmental
friendly coatings used by service indus-
tries are even better. Besides, although
most manufacturing industries’ demand
is shrinking, the automotive market in
China is growing still fast. Based on the
report released by China Association
of Automobile Manufacturers, auto-
motive sales in November grew by 10
percent compared with last year. With
the number of total vehicles continu-
ously increasing, the automotive service
market will grow even faster in China.
According to the report released by
MARTEC during 2016 ChinaCoat, wa-
terborne automotive refinish market in
China will grow by over 20 percent from
2016 to 2020, although overall automo-
tive refinish market’s growth will slow
down. The report also disclosed that
waterborne coatings have big growth
potential in engineering machinery, fork
truck and farm machinery market. Right
now, waterborne coatings in this market
segment only holds 1.2 percent share,
and is mainly used as primers.
Sika flooring and coatings business
unit has increased their annual sales in
China to 350 million yuan in 2016. The
growth, representing every 100 million
yuan sales growth in three years, comes
from market share increase in the flooring market as well as winning of market
shares in other architecture coatings and
building materials. The success of Sika is
originated from high customer satisfaction for Sika’s solution, which combines
both high quality products and excellent
customized services.
The Chinese coatings market is
changing quickly. And the situation could be even worse for coatings
manufacturers if the trade relationship
between the U.S. and China fluctuate in 2017 with the new government
on board. Coatings companies need
to adapt themselves quickly to the latest market trends and foster a service
mindset instead of focusing simply on
production like they did previously. CW
“The Chinese coatings market is changing
quickly. And the situation could be even
worse for coating manufacturers if the
trade relationship between the U.S. and
China fluctuates in 2017 with the new
government onboard.”
