Coating Factory
The China market is seeing robust demand for anti-corrosive coatings despite a slowing economy. This growth is driven by customers in petrochemical, shipping, construction and power industries who are demanding higher levels of performance.
The new facility is a welcome addition to the company’s China operation. It is well-positioned to meet customer demands in the region.
Environmentally friendly
Despite China’s rapid economic growth, the country’s environmental regulations are relatively strict. For example, manufacturers are required to meet stringent pollution control standards, which are enforced by local authorities. These laws have forced manufacturers to relocate or upgrade their facilities, and they are also required to reduce the use of toxic chemicals.
Coating manufacturers have responded by developing a wide range of low-VOC technologies to cater to the needs of different industry segments and applications. These include waterborne industrial coatings, powder coatings, and emulsions, as well as solvent alternation such as tert-butyl acetate and supercritical CO2. In addition, raw materials suppliers are developing new products to fit these new formulations, while VOC treatment equipment is being upgraded to be more efficient.
The EPA’s Green Chemistry Program has also helped reduce the environmental impact of coatings and other industrial products. In addition, many coatings companies are using recycled materials in their formulations. Many of these initiatives have reduced emissions of volatile organic compounds (VOCs) by more than 80% in recent years.
A shift toward greener manufacturing is underway in China, led by large apparel companies with money to invest. These efforts are accelerated by the demands of overseas buyers, as well as environmental regulations imposed by the Chinese government. The move to greener manufacturing has led to a reduction in toxic releases from the apparel industry, as well as increased efficiency and productivity.
In addition to reducing VOCs, manufacturers are improving their production processes to reduce energy consumption and waste. For instance, they are replacing oil-based paints with water-based alternatives, switching to powder coatings for more durable finishes, and adopting alcohol no-wash welding. These improvements have resulted in significant reductions in VOC levels at manufacturing plants.
The emergence of greener manufacturing in China has also affected the demand for anti-corrosive coatings. Traditionally, these coatings are used for marine, container, bridge and oil platform applications. However, the decline in demand for these coatings has been offset by robust growth in other industries, such as petrochemicals, transportation and construction.
The overall market for industrial coatings in China is stable, but overcapacity is an issue for some raw materials suppliers. The overcapacity problem is especially acute for producers of resins and pigments, as they have already invested a great deal of capital in new capacity. In order to address this issue, AkzoNobel has established a new Powder Coatings Technology Center in Ningbo, which will house the research team organized into centers of expertise for strategic market sectors.
High quality
China’s architectural coating consumption peaked in 2017 due to the increase of investment in residential buildings. It has also boosted the demand for high-performance products. This is the first time that the coatings industry in China has witnessed a sustained increase in architectural coating consumption. This is due to the long-time recovery since 2015 and the rise in sales of floor space.
China is one of the world’s leading automotive producers and is the largest market for automotive coatings. However, the country has a number of challenges in the short and medium term. In addition, the industry will face a transformation as it embraces electric vehicles (EVs). This will drive new demand for specialty coatings and create opportunities for coating suppliers.
Axalta has remained committed to investing in the Chinese market, focusing on innovation and sustainability, and helping customers achieve their goals. The company’s latest investment in a waterborne coatings plant in Shanghai marks another significant milestone in the company’s strategic growth plan for the country. The plant will produce basecoats, primers, and clearcoats for the automotive OEM market. In 2021, the company announced several other significant accomplishments in China, including the expansion of a waterborne production line in Shanghai and the opening of a Refinish Training Center in Guangzhou.
In the future, Shanghai will be a key hub for impact coatings in Asia. This will be supported by a fully operational Coating Service Center in Shanghai, which is scheduled to open after the summer. The facility will be equipped with a full-auto vertical anodizing machine and will allow customers to receive information on their coatings’ quality, performance, and more.
Earlier this year, the team from the Shanghai Coating Service Center traveled to Sweden for a month of training and education. They worked in every department of the factory, learning how to run and operate the machines. They were taught about customer qualification procedures, corrosion tests, blasting and washing in pre-production, and how to handle maintenance. They also learned about the human-machine interface and were introduced to the software used in machine upgrades.
Low cost
China’s coating industry has surprised the global coatings market by its unprecedented volume growth in recent decades. It has been spurred by rapid urbanisation. The country is one of the world’s fastest growing markets for architectural coatings. Its lax environmental regulations, low material costs and labor rates provide an excellent operating climate for manufacturers. These factors make China a low-cost manufacturing base for foreign supply chains.
In 2021, architectural coating producers in China accounted for a total of 7.14 million tonnes of paints and coatings, up by more than 13% compared to Covid-19 hit 2020. However, the share of architectural coatings in the overall Chinese paints and coatings market is still quite low. This is due to the large size of China’s automotive market, massive industrial production and a rapidly growing real estate sector.
While the low share of architectural coatings in China’s overall paints and coatings market presents challenges for domestic producers, it also provides a number of opportunities for multinational players. They can enter the market by improving their products and reducing costs and prices. For example, AkzoNobel recently invested in a new production line for water-based texture paints at its Songjiang site in Shanghai, which will increase capacity for the company’s Dulux brand of decorative coatings.
Another risk for Chinese coatings producers is a significant slowdown in the economy. This could cause a loss of profits for many of them, especially in the raw materials segment. This is why companies such as Sherwin-Williams are investing in Asia.
Sherwin-Williams is a multinational coatings supplier with operations worldwide. Its coating solutions include solvents, resins, chemicals, additives and pigments. In addition to its product lines, the company also offers a range of service and support, including technical consulting and vendor-managed inventory. Sherwin-Williams has several sites in China, and exhibited at the China Coating Show (CCS) this year.
Short lead time
The Chinese coating market is growing rapidly, with a huge potential for new business. The country is one of the world’s largest automotive markets, and its manufacturers rely on advanced, high-quality coatings to help them achieve superior results and productivity. This is why Axalta has invested in a new waterborne coatings plant in Jilin. The plant will produce basecoats, primers, and clearcoats that will allow automakers to improve quality and reduce production times.
The plant will also produce high-solids technology, which is a water-based formulation that reduces VOC emissions and provides outstanding performance and durability. This new technology enables the company to offer premium products that meet stringent environmental standards. The new plant will also increase Axalta’s capacity to serve the auto industry by providing customers with a wider range of coatings solutions.
China’s architectural coating production industry has grown exponentially in the past three decades. The rapid urbanisation of the country has resulted in a huge demand for domestic architectural coatings. However, the share of architectural coatings in China’s overall paints & coatings market is still low, as compared to global averages.
Buyers should be aware that lead times for Chinese manufacturers are usually highest during the summer months. These increases begin in mid-July and early August, when factories prepare for the holiday rush. Having an accurate production calendar and making sure your orders are placed early will help prevent these delays from occurring.
In addition, buyers should make sure to have a delay clause in their purchase agreement. This clause should state that if the order is not completed on time, the supplier will be penalized with a certain amount of money for each day that it is late. This will encourage the manufacturer to work diligently to fulfill your orders in a timely manner.
Sherwin-Williams has been in China since 1930 and operates manufacturing plants, R&D centers, training facilities, offices and trading companies in Mainland China. The company’s products include protective and marine coatings, automotive refinish, industrial coatings, architectural coatings, aerospace materials and flat glass.