Coatings World - June 2016

With the continuous improvement of the Chinese economy and rapid increase of disposable income of Chinese consumers, China’s food industry is growing at a fast speed. In 2015 the total revenue of China’s food industry was increased by 4. 6 percent, and total profit increased by 5. 9 percent over 2014. And the medicine industry has become one of the fastest growing industries in China’s whole economy, although their annual growth was actually slowing down in 2015. In the first half of 2015, the total revenue of China’s medicine industry was increased by 8. 9 percent and total profit increased by 12. 9 percent comparedwith the same period of 2014. With the pace of living and work becoming faster and faster, the white collar workers and the millennium generation are more and more inclined to purchase and consume convenient and small packaged food products, a trend offering a good opportunity for the packaging adhesive market to grow. In responding to the new trend, major adhesive producers either expand their production in China or increase production lines to introduce new flexible packaging adhesives products into the market.

Beijing Comens New Material Co., Ltd is the largest polyurethane lamination adhesives producer in China. The company put their new 22 thousand tons per year plant into production in 2015 in Nantong, Jiangsu province, totaling the company’s adhesives capacity to 36 thousand tons per year. With the release of the new production capacity, Comens’ revenue was increased by around 4 percent and its profit increased by an amazing 49 percent in the first quarter of 2016.

Besides adding new capacity, Comens
has invested to renovate their production
lines in their Beijing plant and developed
a series of non-solvent adhesives, span-
ning from regular to cooking varieties.
The company stated that the demand for
VOC free flexible packaging adhesives
has encouraged the development of non-
solvent polyurethane adhesives in China.
And the market share of non-solvent ad-
hesives in the whole lamination adhesives
market has been increasing rapidly in re-
cent two years. In addition, Comens in-
troduced new non-solvent polyurethane
adhesives into the cigarette sector, and the
company is also developing a new mar-
ket: artificial turf.

As another major domestic adhesive company, Hubei Huitian put their 10 thousand tons per year polyurethane production line into operation in 2015 to satisfy the demand increase in the local market. As a result of this, Huitian’s sales from their flexible packaging adhesives was increased by 307.31 percent.

The central government has been encouraging the development of clean energy in China, resulting into China being number one in several clean energy sectors. For example, China has the largest photovoltaic(PV) power capacity in the world, with a total volume of 43.2 million kilowatts at the end of 2015. And it is estimated that this number will reach 100 million kilowatts in 2020. In addition, wind energy sector experienced a big leap last year, adding 30 million kilowatts of new capacity. China was ranked No.1 for winder power increase in the world, followed by America with 8. 6 million kilowatts. The increase of clean energy capacity in China enabled several adhesives companies to reap considerable profits in 2015.

Hubei Huitian’s total revenue from
their renewable energy business was in-
creased by 37.64 percent and almost
doubled total sales from their solar cell
back sheets in 2015. Hutian’s products
for renewable energy market include PV
adhesives and solar cell back sheet, etc.
Currently the company is also working
hard to introduce their adhesives into
wind power sector.

Shanghai Kangda is without doubt the leader for wind power structural adhesives, with a market share of around 70 percent. In 2015, the company’s sales in solar and wind power sectors was increased by 44 percent, and adhesives sold to clean energy sectors was 73.78 percent of Kangda’s total revenue. Besides, Kangda is adding new production capacities for epoxy adhesives and epoxy resins, which, when completed, could have a visible impact to the company’s bottom line. However, Kangda’s businesses depends highly on government support to the development of wind and solar energy sectors, meaning their revenue could have drastic fluctuation if government policy changes direction.

By the end of 2015, the total length of high speed railway lines reached 19 thousand kilograms. In 2016 alone, the government will invest over 800 billion RMB into new railway projects. Unlike the railway sector, whose growth is supported by the government, the automobile industry is driven by the demand of Chinese consumers. In the first quarter of 2016, the total output of China’s automobile industry was 6.59 million, increased by 6.2 percent over the same period of 2015. Meanwhile, the output of new energy automobiles was increased by 110 percent. The positive market trend transforms new investments in many downstream markets, including adhesives and sealants.

Henkel is in preparation of expanding their adhesive production capacities. The whole project, with a total investment of 50 million RMB, is estimated to be completed in the second half of 2017 in Henkel’s current production base in Shanghai, and add a new capacity of 20 thousand tons per year.