How to survive the coating industry under economic transformation

The coating industry has developed at an alarming speed in the past two years: at the beginning of the crisis, the overall market environment led to a stagnation of sales, the price of raw materials has shrunk by nearly half, and the development of powder coatings has fallen to the bottom. At the end of 2008, the state promulgated a four trillion investment national policy. In 2009, with the expansion of national infrastructure, home appliances to the countryside, and the rapid recovery of the real estate market, the powder coating industry achieved a slow recovery after the financial crisis.

Entering 2010, my country's powder coatings industry is experiencing chills. The decline in foreign exports in 2009 directly led to a continuous decline in the demand for powder coatings products. On the contrary, rising raw material prices and transportation costs are in sharp contrast with the powder coating market, which has little room for price increase. Under the combined effect of upstream and downstream pressures, powder coating companies have greatly reduced their profit margins, and even some companies have already experienced losses.

In my country, powder coatings are also mainly used in the following five fields: automobile industry, shipbuilding industry, pipeline industry, heat-sensitive materials and construction. With the upgrading of the powder coating application market in recent years, such as the continuous expansion of spraying technology and application market, the gap between the technology of my country's powder coating companies and the international brands has become apparent. The upgraded powder coating market has blocked companies with insufficient technical capabilities and backward R&D from the high-end market, or ended the era of numerous small and medium powder coating companies, and has become a competition between various brand products.

The characteristics of domestic powder coating factories are: wide distribution, low product quality, weak research and development technology, and no independent brand. Under normal circumstances, the formula used is improved and then put into production. According to Coatings.com, my country’s powder coatings market is unevenly distributed. Pipeline anticorrosion and environmental protection are in the northern market, and home appliance companies are concentrated in the southern market, especially Shunde. The above two points determine whether my country's powder coatings market will usher in the development trend of integration. The integrated powder coating industry will achieve an effective layout, and will not change the market characteristics and the direction of enterprise development due to integration.

China's powder coating industry, which has experienced the baptism of the financial crisis, has a bumpy road to its future development. The shadow of the impact of the financial crisis in Europe and the United States will not be eliminated in the short term. Foreign powder coating brands have set their sights on China and explore the Chinese market. Akzo Nobel's sixth powder coating plant in China has been put into operation in Wuhan recently. Foreign companies have good brand awareness, stable product performance, and strong R&D capabilities. In the face of huge advantages, China's powder coatings market has opened up and occupied China's mid-to-high-end powder coatings market. In contrast, domestic powder coating plants generally occupy the low-end market of powder coatings due to their low product quality and low prices.

The advantages of integration: Concentrate superior companies to enhance R&D capabilities

The integrated powder coating industry can give full play to the company’s own advantages. The author personally believes that the integration of powder coatings can have two directions: one is the integration of technical enterprises, and the enterprises mainly focus on technological advantages. After the integration, the establishment of China’s own The powder coating research and development center, combining the actual markets in various parts of China, invests in the research and development of new products, occupying the middle and high-end powder market, and competing with foreign brands. On the other hand, it is the integration of product types. For example, after the integration, several companies are concentrated to produce a certain type of powder coating products to ensure good product quality and ensure market supply.