Multi-resonance Coatings industry is about to enter the "profit" era.

Since 2016, the
of
coatings and raw materials has continued to rise. Recently related industry people from international crude oil to coatings all kinds of raw materials price trends and market demand, analysis of China's paint raw materials in 2016 market patterns. It added that 91 per cent of the products monitored in 2016 had risen in price, and only 9 per cent had fallen. Since then, it has been reported that China's paint industry will enter the "era of windfall profits." The so-called "profiteering era" exists only in the period of product shortage, poor information, extensive demand and rapid economic development, and now these conditions do not exist. So will there be "profiteering" in the paint industry in the future?
end of the era of demographic dividends, the living space of enterprises has become smaller
Since the reform and opening up, relying on low labor and environmental resources overdraft, has created thousands of successful enterprises. After more than thirty years of evolution, the market gradually returned to rationality. The demographic dividend entered negative growth in 2015, the end of the demographic dividend era, and the economy showed signs of weakness. This to after several years of extensive development, blind expansion, homogenization serious, products without low technical content of the domestic paint market has brought a fatal impact, with the 2016 raw material prices have soared,
paint enterprises
's survival space was further suppressed.
China's paint production in 2003 after overtaking Japan with high-speed growth momentum, in just a few years to surpass the United States, become the world's largest paint production. In the past two years, China's economic development began to slow down, the paint industry problems are gradually emerging. From the technology and brand awareness, market share, at least, the current national
-paint brand
temporarily can not stand in the same ranks with foreign paint brands. Let's look at a set of data: 1.2 million tons to 1.3 million tons of water-soluble
building coatings
in 2013, 30% to 40% of the low-grade water-soluble building coatings. Construction coating manufacturers thousands, can reach an annual output of 5000 tons of enterprises less than 3%. The main body of the civil construction coatings market is controlled by lilly companies of multinational group companies such as Libang and ICI in China, and the coating output of the two major group companies accounts for nearly 1/3 of the total output of the national materials. There is a serious homogenization phenomenon in China's paint industry. Some experts said that at present, China's paint industry research funds less than 2% of the total sales, products more than 90% of the same - this is the current situation of China's paint industry. Although China is already the world's largest producer of paint, but China's paint enterprises produce products are mostly in the low-end level. It is no exaggeration to say that with independent intellectual property rights, in the international leading level of paint enterprises in the domestic few.
the rise of raw materials, it is more difficult for paint companies without technical barriers to survive
after the price of
titanium dioxide
bottomed out in 2015, the price of titanium dioxide in 2016 showed a year-round rebound. From 10,900 yuan/tonne in early January to 15,300 yuan/tonne at the end of November, it rose 40.36 percent, or nearly 5,000 yuan per ton. All year 2016 is basically in a tight supply state. The market price of important raw materials for coatings, polyester resins, epoxy resins, titanium dioxide powders and TGIC curing agents continues to rise. In 2016, the price of paint raw materials bottomed out, especially since the second half of the year, most of the paint raw materials have continued to rise trend, the cost of paint manufacturers caused great pressure, and even worse since October, transportation costs by the New Deal, began to create new cost pressure on paint enterprises.
data show that although there was no significant increase in market demand in the coatings industry in 2016, production showed an upward trend. In the first three quarters of 2016, China's total paint production reached 13.4504 million tons, an increase of 8.4% YoY. Overcapacity has become a common phenomenon in the industry. Overcapacity merchants will inevitably start to compete, kill each other, discount promotion, sale treatment, the result is that we feel that money is more and more difficult to earn. This means that the turning point is beginning to appear! In other words, it's not that consumers don't want to spend, it's that merchants aren't creating the kind of products they want.
innovation cast the paint industry "rich" era
with people's living standards do not improve, people began to pursue high-quality life. From cosmetics to food, from building materials to furniture and other fields have gradually introduced the concept of "no added", research and development of "no added" products. Even paint products that have always been a selling point for colorful products are added, such as a commodity "no added" series of wall paint using "no added purification technology", in the product formulation and production process did not artificially add formaldehyde, benzene and other volatile organic compounds to achieve layer purification effect. The best business models must have been born in the worst of times. The future market must be dominated by the era of "rich profits", and only if the products have "rich profits" of capital. Merchants must create experience upgrades through design, technology, innovation, and more to build incremental consumer dividends.
innovations, such as Ma's WeChat, directly destroy and subvert their QQ. The essence of disruption is to create demand, not to follow suit and meet existing needs. This disruptive innovation is most typical of WeChat and Apple phones. After you've used Apple phones and WeChat, you know you've had so much desire to be inspired. It is these great products that create your needs. Huawei, OPPO and VIVO became the three most profitable smartphone providers outside of Apple in the third quarter of 2016, according to a study released last week by Strategy Analytics. While Apple's share of sales fell in 2016, the three Chinese companies still have a big gap with Apple, which reportedly accounts for 91 per cent of the $9.4bn profit from smartphones. This is the gap between innovation and imitation, perhaps someone else only need to sell a mobile phone is you buy a dozen profits. The lucrative market comes from the value and innovation of the brand. Apple's research and development spending has been on the table for six years in a row, with $8.1 billion spent on research and development last year. But it's not the highest on the list, with Google's parent company, Alphabet, spending $12.3 billion on research and development and Samsung spending $12.7 billion. The era of "rich profits" is the trend, but he belongs to the courage to innovate, quiet research and development of enterprises.
, the paint industry "overcapacity" and "serious homogenization" is a well-known problem, but without policy-driven, the problem is difficult to get a fundamental solution. With the implementation of "supply-side reform", the paint industry will be intensified by various problems and contradictions, some small and medium-sized enterprises because of product quality at a disadvantage or even face a severe survival test. The large-scale price increase of raw materials in 2016 to China's paint industry has brought no small impact, the future market can survive must belong to a certain competitiveness of products and enterprises. And those who use plagiarism, imitation survival of enterprises, if separated from the product and brand "hold", like the loss of water, like China's VCD, DVD, and even MP4 market, by imitation to survive the enterprise, and ultimately can only go to death.
that although we are a large population, but in the past indulged in the acquisition of demographic dividends, let us go astray. The end of the era of demographic dividends is precisely the catalyst for China's economic recovery of creativity. The Western world has long had no population growth, but has been growing for more than a hundred years. They have proved in practice that the real driver of economic development is "innovation" rather than "population growth". Low-cost labor is slowly disappearing, the country's environmental policy is tightening, raw materials are soaring, making it more difficult for companies without technology, research and development, and innovation to survive. And those with technical barriers, not easy to replace the enterprise, they still control the industry's high profits.
Take the paint industry this year's red star "titanium white powder", although after 13 rounds of high tide, but the current price difference with foreign countries is still 8000-10000 yuan / ton, the same product profit margin is very different. The reason why the price of titanium dioxide abroad can be significantly higher than the domestic, is because its quality production technology is difficult to surpass, but the quality of domestic titanium dioxide is difficult to improve, always hovering in the low-end market. Therefore, the future must be the era of innovative excellence. Only by increasing investment in product research and development, improving product quality, innovation, training professional and technical personnel, increasing the technical content of products, can not be easily imitated, the future market products can be more competitive, and thus enhance profit margins.
the past, scale is more important than barriers; After a cold winter's baptism, an industry means that the next spring is coming. All the excellent business models must have been born in the most terrathy era. The end of China's coating industry extensive era, will certainly usher in a healthier broad market, its essence is a kind of "profit."