Industry | In the past 3 years, 8,000 small factories have shut down 4,000~5,000 coatings industry integration drama is far from a curtain call

China is currently the world's largest coatings market, accounting for about 33% of the global market by value, or even higher by volume.
In addition, although the growth rate of the Chinese market has slowed down in recent years, it is still higher than the global average, which has further improved China's position in the global market.
However, the future market development is closely related to many dynamic factors.
These factors include strict environmental regulations, the shift to high-end products, and the increase in labor costs.
It is these factors that have promoted the integration of the Chinese coatings industry.
Since the implementation of relevant environmental protection regulations, the use of solvent-based coatings in more developed cities and provinces has been restricted.
For example, starting from May 1, 2017, Shenzhen has completely banned the use of solvent-based coatings, adhesives and toxic panels in the manufacturing process of furniture products.
From May 1, 2018, Shanghai banned the use of solvent-based exterior wall coatings in construction projects for new construction, reconstruction, and expansion ; and prohibited the use of solvent-based wood coatings in construction (decoration) projects.
In March 2018, Tianjin issued the "Implementation Plan for the Comprehensive Treatment of Painting Operations in the Motor Vehicle Maintenance Industry in Tianjin", requiring the city's auto repair industry to start using water-based coatings before January 2019.
In addition to these separate bans on solvent-based exterior wall coatings , another alternative driving factor is the levy of environmental taxes on volatile organic compounds including benzene and toluene.
In fact, the "Industrial Structure Adjustment Guidelines Catalogue" issued by the National Development and Reform Commission in April 2019 encourages the use of low-volatile organic compound coatings in water-based woodware, industrial, marine coatings , functional exterior wall insulation coatings and other fields.
Marine Coatings Based on this, companies have made the appropriate response, which increases the itubang.
com/" target="_blank">aqueous coating capacity, shut down solvent-borne coatings capacity.
For example, Chongqing Three Gorges announced in May 2019 the construction of a water-based industrial coating production line with an annual capacity of 25,000 tons to replace the existing capacity of 10,000 tons of solvent-based coatings.
itubang.
com/" target="_blank">Water-based paintIndustrial coatings In addition, many coating companies need to relocate due to the policy of transferring hazardous chemical production from cities to chemical parks.
For small paint manufacturers with low-end products and low investment capabilities, relocation is usually equivalent to a complete closure of the factory, especially when the choice of tenants in the chemical park is becoming increasingly strict.
This may also push the coatings industry further to western China.
Sichuan is already the fourth largest paint production area in China's provinces.
Although Shanghai and Jiangsu have strict environmental regulations, the chemical parks in Sichuan are still open to new entrants.
Overall, these phenomena will promote the continuous integration of the industry.
As of the end of 2015, there were approximately 10,000 paint manufacturers in China, of which only 2,000 had annual sales of more than 20 million yuan.
In the past three years, due to strict environmental regulations, among the 8,000 smaller factories, 4,000 to 5,000 factories have closed or ceased production.
Even so, the sales of China's top 100 coatings manufacturers account for only 49% of the total sales of the Chinese coatings industry.
Similarly, although 8 of the world’s top 80 coatings companies are headquartered in China, their scale is still small compared with the world’s largest coatings manufacturers.
The two largest coatings manufacturers in China are only ranked 26th and No.
28-bit list.
Integration pressure also comes from the need to develop new, more environmentally friendly products.
Companies that are unable to invest in research and development will sooner or later be driven out of the market unless they manage to sell themselves to large companies before being forced to close.
On the contrary, some of the larger domestic paint companies have recently expanded their R&D activities and subsequently launched many new products.
Leading companies continue to invest heavily in increasing production capacity and new products.
For example, Akzo Nobel has added three new production lines to its powder coating factory in Changzhou, Jiangsu.
Astronergy will build a new production base in Changsha, Hunan.
600 million yuan, with an annual output of 200,000 tons of architectural coatings Axalta Axalta will focus on the high-end itubang.
com/" target="_blank">powder coatings market and launch a new product line and service model itubang.
com/" target="_blank">powder coatingsBASF Automotive Refinish will build a new factory in Jiangmen City, Guangdong Province, the first half of 2022 and put into production Garbo Garbo will build 500,000 tons of new building materials production line in the Economic Development Zone in Anhui Mingguang, including architectural coatings Haihong elderly will be in Zhangjiagang Invest 170 million US dollars to increase the capacity of 200,000 tons of marine coatings, industrial coatings and itubang.
com/" target="_blank">water-based coatings .
itubang.
com/" target="_blank">Water-based coatings Keshun Co.
, Ltd.
held the groundbreaking ceremony for the Fujian Keshun New Material Intelligent Production Base Project in December 2019.
Dongfang Yuhong was held in September 2019.
A number of production lines have been put into operation each month, including one with an annual output of 40,000 tons of water-based paint, and one with an annual output of 100,000 tons of polyurethane waterproof coating PPG will build a research and development and production base in South China from 2020 to 2022, with an investment of 620 million yuan in three trees.
Opened its Anhui Sankeshu Eco-Industrial Park in April 2019.
Sherwin-Williams invested 686 million yuan to open a new Asian headquarters in Shanghai in 2019, calling it "an important bridgehead for the growth of the region.
" Shenzhen Youwei and Hubei Yihua will invest 8 billion yuan in Hubei to build the world's largest UV curing material project.
The products include raw materials for UV curing coatings and LED curing coatings.
With the consolidation of the industry structure and rising labor costs, The degree of automation will also increase.
Automated paint production lines can not only reduce operating costs, but also improve production efficiency and product quality.
After the opening of the Bardez Zhongshan plant in February 2019, the company stated that the introduction of an intelligent manufacturing system is aimed at improving production efficiency and product quality stability.
Paint companies are also very actively looking for partners to consolidate their position.
For example, Lanling Chemical's goal is to cooperate more closely with Sinopec, while Oriental Yuhong has signed strategic cooperation agreements with Celanese and Yanshan Petrochemical.
Chenyang Group announced plans to cooperate more extensively with Dutch chemical company DSM to promote the development of sustainable coating solutions in the Chinese market.
Some coating companies have reached long-term supply agreements with downstream user companies.
In the long run, leading Chinese companies may wish to reduce their reliance on the domestic market by targeting markets outside of China.
Acquiring overseas paint companies is the most promising way to achieve sales outside of China in a timely manner.
Industry consolidation may have a highly positive impact on the current development of China's coatings industry.
Industry consolidation will be accompanied by a higher share of high-end environmentally friendly products and higher profit margins.
However, only those paint companies that are strong enough to survive the current merger phase will benefit.
For many small businesses, a merger means having to exit the market unless they can find a strong partner or buyer for their company.
Large companies may wish to use this opportunity to acquire assets and brands, or consider expanding overseas.