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China’s NPCC Demand Not Expected to Shrink Sharply, Says Frost & Sullivan

February 23, 2009

~ Taking a look back at China‘s NPCC Industry in 2008 and its market outlook for 2009 ~

SINGAPORE, Feb. 23 /PRNewswire/ – Nanomaterials are widely regarded as one of the twenty-first century’s key high-tech materials enjoying functional characteristics such as increased tensile strength, self-cleaning capacity, fire resistance, and others. Nano precipitated calcium carbonate (NPCC) is one of the important nano mineral materials.

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NPCC has been widely applied in the tire, plastic, adhesive, paper, paints and ink industries as an additive. NPCC can be used as a rubber reinforcer to increase bending strength, airtightness, traction and tear resistance, improve break elongation, tensile strength and aging resistance, reduce material cost without impacting reinforcing or whitening features. NPCC can also be applied as a plastic additive for PVC window profiles; some used in PP and PE as well. NPCC acts as modifiers to improve flexibility, tensile strength, color-fastness & glossiness, durability and heat resistance of polymers, stabilize dispersion and reduce material cost.

According to Frost & Sullivan’s China Consultant for Chemicals, Material & Food Practice Nina Zhou, the Chinese NPCC market is still at an early growth stage with less than 20 years’ development and a total sales volume of 400.6 kMT in 2008.

“In 2008, the domestic tire and plastic products manufacturers’ profit margin was squeezed by the RMB’s appreciation and higher raw materials costs. The global economic slowdown is likely to cause a certain amount of demand to shrink in 2009 as the auto and plastic industries have been the hardest-hit victims,” she said.

“However,” she continues, “a series of economic stimulus packages are expected to mitigate the downside of those downstream industries. As a major exporter of plastic products and tires, the Chinese government has increased export tax rebate of parts of plastic products from 5% to 9% in November 1st, 2008 and tire export tax rebate from 5% to 9% in December 1st, 2008 to help Chinese tire and plastic products exporters overcome the impact of a weak global economy.”

In terms of industry trends and specifics, Zhou says that NPCC downstream penetration is relatively low due to higher prices and less awareness currently among public in China. “Manufacturers can expand their client base by cooperating with clients and providing technology support. NPCC can be used as functional additives in various products due to their special chemical and physical attributes including plastics, tire, coating, adhesive and ink with plastics and tire for manufacturers to invoice larger volumes,” she adds.

The nano industry, including NPCC, is very much technical oriented. According to Zhou, manufacturers who are dedicated to technology innovation can survive well in the market. She continues, “Most plants which adopted ultra gravity technology closed during the past two years due to high costs. At the end of 2006, the advanced membrane dispersion technology commercialized with the improvement of the quality and consistency of NPCC particles, co-developed by ShengdaTech and Tsinghua University, helped cut costs by 7.0% compared to the traditional ultra-gravity method. This new technology is now used at ShengdaTech new plants located in the Shannxi province.”

The Chinese government announced a rescue package of RMB4 trillion stimulus plans over the span of years 2009 and 2010. “Massive infrastructure projects are expected to boost the industries of plastics, coating and adhesive, helping increase demand for NPCC. The plan includes a new set of tax cuts and subsidies aimed at boosting demand for cars. The stimulus plan expects to push the auto sales volume back to double-digit growth in China. Tire and rubber industries will likely benefit from this. The medium- to long-term forecast for the Chinese auto industry is more cheerful. China may unveil aid plans for petrochemical, textile and other industries,” Zhou adds.

Although NPCC downstream industries are slowing down, NPCC demand is not expected to shrink sharply in 2009. She says, “As an emerging industry, NPCC expects to have a potential market as the substituted products for other expensive additives. This kind of high-tech material development is also encouraged by Chinese government. Also, NPCC downstream penetration will likely be raised as NPCC products are accepted and applied widely with the performance improved by technology upgrade. Moreover, people are likely to pursue high-quality products on back of consumption upgrade and accelerating urbanization. Many stimulus plans are expected to be in effect in 2009 and this will mitigate the slowdown of downstream industries.”

ShengdaTech, leading supplier of NPCC in China expects to own more market share through technology innovation and downstream penetration. The company has been awarded The 2008 China Frost & Sullivan Award for Growth Excellence in December 2008 for fast growing market revenue, breakthroughs of research and development, outstanding product quality control and referral customers in Chinese NPCC market.

About Frost & Sullivan

Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company’s Growth Partnership Service provides the CEO and the CEO’s Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages over 45 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com.

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    Donna Jeremiah
    Corporate Communications - Asia Pacific
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    E: djeremiah@frost.com

    Carrie Low
    Corporate Communications - Asia Pacific
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    E: carrie.low@frost.com

SOURCE Frost & Sullivan


Source: newswire



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