China
drop of container coatings.
Large coatings players are actively expanding their presence.
With over 10,000 coatings producers,
all the companies in the coatings market
faces fierce competition. Environment
protection and profit pressure have
pushed many companies to close their
production facilities. On the contrary,
large coatings companies are either increasing their capacities or acquiring
their competitors’ assets, with the purpose to strengthen their leading positions
and increase market shares.
On January 20th, 2017, PPG entered
an agreement to acquire Futian Xinshi,
an automotive refinish joint venture in
Guangdong province. This new deal will
strengthen PPG’s leading position in the
automotive refinish market and expand
PPG’s sales network. It is reported that
Futian brand’s total sales in 2016 is $15
million. China’s automotive refinish market is a lucrative market segment and is
expected to grow much faster than the
whole coatings market. With the total
passenger car quantity kept at a high level, the car maintenance and repair market
offers big potential for the growth of automotive refinish in the future.
Not only does the automotive refinish
market have a positive future, but also
the whole automotive coatings market
is still growing. And some companies are
moving fast to strength their strategic positions in the market. KCC, a key supplier
of Hyundai, recently signed an agreement
with Tianjin government to construct
a new coatings manufacturing base in
Nangang Industrial Zone of Tianjin
Economic Development Area. The new
plant is estimated to hold a space of
around 13,000 square meters and will
produce 70,000 coatings products when
put into production at the end of 2018.
KCC Tianjin will mainly serve automotive and industrial markets. Currently
KCC, who is the largest coatings manufacturer in Korea, has three manufacturing bases in China. Closest to the Tianjin
manufacturing base is KCC Beijing, who
currently supplies automotive coatings to
Beijing Hyundai and coil coatings to the
customers in North China.
Unlike America, China does not have
so many family workshops that target in-
dividual and DIY customers. In America
Sherwin Williams powder coatings center
are a commonly seen beside the road and
these centers serve the needs of powder
coatings users. In China powder coatings
producers promote their products mainly
to company customers. Following con-
tinuous growth of the automotive market
and implementation of more stringent
environment protection regulations by
the government, China’s powder coatings
market has a foreseeable bright future, so
powder coatings companies keep adding
new capacities.
On January 17th, AkzoNobel also
announced that a new powder coatings
plant has been put into operation in
Chendu, Sichuan province. The new plant
will mainly supply Interpon powder coatings to the customers in western China.
AkzoNobel right now has six powder
coatings manufacturing bases in China,
and the company is also constructing another new plant in Changzhou, Jiangsu
province. The economy of western China
is relatively lagging behind the development of coastal cities and provinces in
east China, but this also offers untapped
growth potential. Akzo Nobel’s new powder coatings plant in Chengdu is close to
one of the largest automotive manufacturing bases in China.
Nippon Paint also announced on
January 16th that the company has
acquired 60 percent stock shares of
Changrunfa and Nippon and Changrunfa
have established a strategic alliance by
signing a new agreement. Changrunfa is
a specialized wood coatings business, so
Nippon might want to increase its pres-
ence in China’s wood coatings market by
this new deal.
Domestic companies are keeping their
pace with foreign companies by their easier access to domestic financing market
and faster market response. Zhanchen
is one of the major domestic coatings
companies in China, with 7 manufacturing bases. Recently Zhanchen announced
that the company will expand coatings
capacity in their Shanghai plant. After
completing construction, the new plant
will be able to produce 57,000 tons of
coatings products. The company’s furniture business group increased their sales
by 10. 14 percent in 2016 over 2015, and
the group’s UV coatings increased by
23. 23 percent over 2015, an even faster
increase behind the implementation of
more environment protection regulations.
Entering the Chinese lunar year, many
uncertainties lie ahead. New trade policy
from America could have a negative im-
pact to the industrial sectors, which could
slow down even further industrial coat-
ings. Tightening measures implemented
on real estate property market has al-
ready slowing down the pricing increase
since December of 2016. All of these un-
certainties could decrease the growth of
China’s coatings industry in 2017. CW
In 2016, a total of 1.57 billion square meters of houses and apartments were sold in China.
