by Arnold Wang
China Correspondent
watsoncw@rodmanmedia.com
Based on a report released by the Chemical Industryand Engineering Society of China, the total powder
coatings output of the top 30 producers in China is 441.5 thousand tons in
2014, which is less than one third of total powder coatings output in China. The
powder coatings market in China is still
very fragmented and composed mainly
of the products of domestic small- and
middle-sized powder coatings producers. But the high-end segment of the local
powder coatings is still represented by the
products of foreign companies, such as
DuPont, AkzoNobel, Nippon Paint, Tiger
and PPG. Large foreign powder coatings
companies enter the China market at an
early stage of market development. With
stabilized and consistent quality and mature technologies, foreign brands soon established their leading position in China.
On the contrary, domestic companies
mainly compete in price in the middle
and low-end market segment. This situation seems to get even worse if we look
at the development of one of the major
raw materials for powder coatings. The
growth of the resin for powder coatings
is apparently faster than that of powder
coatings, resulting in a possible scenario
in the future: Most of the powder coatings producers will still compete in price,
especially in the low and middle-end
market segments. For example, Anhui
Meijia New Material, with the new capital raised from their stocks in the public
market, is constructing a new polymer
resin capacity of twenty thousand tons
per year right now. Meijia is also a major domestic powder coatings producer in
China, ranking fifth or sixth in the top 30
powder coatings producer list. So the new
added resin capacity will mainly serve
Meijia’s own production needs, but the
price pressure will transfer to the whole
powder coatings market when the new
capacity is released.
Foreign powder coatings
producers quickly adjust
their business strategies in
China
The slowing down of the growth of the
electronic appliances, automotive and
real estate industries in China is pushing
resin and powder coatings producers to
think about new ways out of this fierce
competition. And the introduction of
new environmental regulations in China
is also encouraging some other industries
such as aluminum profile manufacturing
to use environmental friendly products
such as powder coatings.
Although AkzoNobel, ranking
number one for many years in China,
produced 66 thousand tons powder coat-
ings last year, mainly under the Interpon
brand, the largest powder coatings pro-
ducer not only in China but also world-
wide said that China’s property boom of
the past decade is well and truly over. Ton
Büchner, chief executive of AkzoNobel,
said, “China’s growth trajectory has
slowed down significantl. China is not the
constantly growing construction market
that it has been for the past 10 years and
we need to adjust to that.”
North America is improving and new
markets in Asia, such as Indonesia and
Vietnam, are improving. AkzoNobel
is very clear of the latest global mar-
ket trend and moving quickly with the
launch of new business strategies. In the
middle of 2015, AkzoNobel announced a
plan to invest more than € 30 million in
Thailand to support regional growth of
its Performance Coatings business.
Foreign Powder Coatings Producers
Slowing New Investments in China
