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Significant Rise in Coatings Production and a Healthy Economy Drives Demand for Paint Additives in the Chinese Market

Posted on: Monday, 13 February 2006, 06:00 CST

LONDON, February 13 /PRNewswire/ -- Reflecting the trend in the European and the U.S. paint/ coatings market, there has been a slow but perceptible shift from solvent to water-based or high-solid coatings in China. This augurs well for the paint additives market, since more additives with various functions will be required to compensate for the reduced amount of solvent applied.

With the top ten global coating manufacturers having entered the Chinese market with their classic formulations and high-grade as well as high-performance coatings, Chinese coating counterparts have been encouraged to significantly increase the use of additives. This improved use has impelled the market to hike not only its volume of production, but also to enhance its technologies and functions.

The tremendous rise in the coatings production volume is very likely to cause a consequent increase in the use of paint additives. In 2004, the Chinese paint market had nearly 8,000 coatings producers that were rolling out 3,798,900 tonnes of product. This has benefited all additive segments of rheology modifiers, preservatives, as well as dispersants and wetting, flow/levelling and flatting, foam control, driers and catalysts, and film forming agents.

China's booming economy has also contributed in great measure to the development of industries such as real estate, automotive and infrastructure reconstruction, which in turn, will drive coating applications and therefore, paint additives that improve coatings properties and applications significantly. The Beijing Olympics 2008 and Shanghai Expos 2010 are expected to give a further fillip to the Chinese economy in future.

"These events have enormous potential influence on many aspects in various industries, including the coatings market - especially decorative coatings," says Ms. Louise Zhao, Research Analyst with Frost & Sullivan (http://chemicalsandmaterials.frost.com/). "Since many huge projects have to be undertaken for these events, it will facilitate the rapid expansion of the decorative coatings market."

As coatings formulations expand to include various applications, environmental concerns will simultaneously increase. The growing consciousness among the Chinese about the quality, credibility, health and environmental compliance of coatings has made consumers gravitate towards efficient, easy to handle and environment-friendly products.

This has generated significant demand for low volatile organic compound (VOC) emissions from coatings and environmentally safe paints that are either water-based or have high solids content, depending on the application.

Such moves toward environment-friendly formulations are expected to drive the additives market, since these paints need a larger amount of paint additives than traditional solvent-based coatings. Additionally, the Chinese Government is likely to pass building legislations regarding VOC levels in coatings on furniture and indoor decoration, which will hasten the shift towards water-based coatings.

"The expanding demands on paints with various functions in gloss, colour and multi-proof promote upgrades of paint additives regarding quality and technology," notes Ms. Zhao. "However, further expansion of the Chinese paint additives markets will be possible only if participants find solutions to the current macro economic control, fluctuating raw material and energy costs as well as intensive pressure from coatings manufacturers."

In 2004, China experienced substantial decline in investment in steel, aluminium, cement and real estate. Subsequently, affiliated coating segments including automotive and coil coatings were adversely affected, which had a resultant impact on the additives market.

To optimally tap market potential, paint additives producers need to focus on environmental and ecological concerns as well as multifunctional/universal/versatile innovation. They also have to integrate distribution channels and reinforce sales potential, engage in merger and acquisition as well as strengthen R&D core competence and customer relationship maintenance. These moves will help them to distinguish themselves and gain an edge over the other participants in this intensively price-competitive market.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest analysis of the Chinese Paint Additives Markets, please send an e-mail to Janina Hillgrub, Corporate Communications, at Janina.Hillgrub@frost.com, with the following information: your full name, company name, title, telephone number, e-mail address, city, state and country. We will send you the information via e-mail upon receipt of the above information.

Title: Chinese Paint Additives Markets Code: B604 Background

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community, by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics.

Frost & Sullivan Chemicals and Food Group is the strategic market consultant delivering insight and understanding to support business growth internationally. We identify and analyse the critical market challenges companies must address to become successful competitors in their industry. Our work is focused on these challenges in order to provide our clients with market strategies that enable them to increase revenues, market share and profitability.

The Group continuously monitors a comprehensive spectrum of chemical and food markets for trends, market measurements and strategies, and delivers powerful data via research publications, bespoke market intelligence projects and customised consulting.

Our team of expert analysts is structured around four key areas: Food Speciality Chemicals Fine Chemicals Performance Materials Media Contacts: Europe: Janina Hillgrub Corporate Communications P: +49-(0)-69-770-33-11 E: janina.hillgrub@frost.com Americas: Trisha Bradley Corporate Communications P: +1-210-247-3870 E: trisha.bradley@frost.com Asia Pacific: Donna Jeremiah Corporate Communications P: +603-6304-5832 E: djeremiah@frost.com India: Surbhi Dedhia Corporate Communications P: +91-22-2832-4705 Ext: 131 E: sdedhia@frost.com Australia: Sharmin Jassal Corporate Communications P: +61-2-8247-8900 E: sjassal@frost.com

List of key industry participants: 3DBio Chemicals, Air Products, Arch Chemicals, Inc., BASF AG, Blackburn Chemicals, Borchers GmbH, BYK-Chemie GmbH, Cabot Corp, Ciba Specialty Chemicals, Clariant, Coatex, Cognis, Cray Valley, Cytec Industries, Inc., Degussa AG, Deuchem Co., Ltd., Dow Corning, Eastman Chemical Company, Elementis Specialties, Inc., Fenghong Clay Chemicals Co., Ltd., Grace, Guolian Chemical, Hercules, Inc., Huaxia Additives Co., Ltd., Human Chemical Co., Ltd., Ineos Group, King Industries, Inc., Liaoning Kelong Chemical Industry Co., Ltd., Progiven S.A.S, Qi Da Chemical Company, Rhodia, Rohm and Haas Co., San Nopco Ltd., Schuelke & Mayr, Shanghai Changfeng Chemical Industrial Factory, SK Chemicals, SmartView Chemical Co., Ltd., Sued-Chemie AG, The Dow Chemical Co., The Lubrizol Corp, Tianjin Beihui Chemical Co., Tokuyama Corp, Troy Corp, Wacker-Chemie GmbH, Winstar International (HongKong) Co., Ltd., Wuxi Sanyou Chemical Co., Ltd., Xinguang Chemical, Yangzhou Lida Colopony Co., Ltd., Zhejiang Huate Group, Zhejiang Linan Fusheng Paint Assistants Co., Ltd.

List of keywords in this press release: paint additives, Chinese, rheology modifiers, preservatives, dispersants, wetting, flow/levelling, flatting, foam control, driers, catalysts, film forming agent, high-solid coating, decorative coatings, volatile organic compound, VOC, water-based coating, research, information, market, trends, technology, service, forecast, market share

Frost & Sullivan

CONTACT: Media Contacts: Europe: Janina Hillgrub, CorporateCommunications, P: +49-(0)-69-770-33-11, E: janina.hillgrub@frost.com;Americas: Trisha Bradley, Corporate Communications, P: +1-210-247-3870, E:trisha.bradley@frost.com; Asia Pacific: Donna Jeremiah, CorporateCommunications, P: +603-6304-5832, E: djeremiah@frost.com; India: SurbhiDedhia, Corporate Communications, P: +91-22-2832-4705 Ext: 131, E:sdedhia@frost.com; Australia: Sharmin Jassal, Corporate Communications, P:+61-2-8247-8900, E: sjassal@frost.com

Source: PRNewswire

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