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    Market Research

    A profile of the Chinese paint industry

    ...

    03.21.12
    IRL has published the sixth edition of its report, “A Profile of the Chinese Paint Industry.” The report updates IRL’s previous study released in 2009 and includes the latest industry trends and up-to-date statistics.

    Chinese paints and coatings consumption reached just over 11 million tons in 2011. More than one-third of the market was occupied by architectural coatings. This dynamic market has continued its growth trajectory despite the global economic recession by focusing on domestic market demand in the construction, automotive, and home appliances and consumer electronics sectors.

    Hosting key events, such as the Beijing Olympic Games in 2008, Shanghai World Expo in 2010 and Guangzhou Asian Games in 2010, China has stimulated huge amounts of investment in the country’s infrastructure. China has continued to invest in infrastructure development, including new bridges, landmark city buildings, alternative energy facilities, nuclear generation plants, schools, and hospitals.

    These factors have all contributed to double-digit growth in the Chinese coatings market year every year since 2002, with the exception of 2008. Over the next five years market growth is expected to remain at a level of around 10 percent per year, with the fastest growth being achieved in road marking paints, coatings for plastics, automotive refinishes and protective coatings. These booming sectors will compensate for considerably slower growth in automotive OEM coatings and wood coatings said the report.

    Per capita paint consumption remains relatively low in China at approximately 7.2 kg, indicating that there is still considerable potential for the market to grow further and penetrate into the more underdeveloped regions of China.

    The Chinese coatings industry continues to be highly fragmented, with as many as 20,000 manufacturers active in the market, albeit on a very small scale for many. Future consolidation is highly likely as smaller players get pushed out through environmental pressures and demand for more high quality products from the end-users.

    The key opportunities for future growth in the market will arise from factors such as:

    • The 18th Congress of the CCP (Chinese Communist Party) will be held in October 2012 and there will be pressure on the new leadership team to introduce measures to stimulate the economy after many government incentives were pulled in 2011;

    • The Chinese government’s affordable housing program plans to build 36 million new affordable dwellings over the next five years;

    • Huge regional disparities remain in China, with rural areas offering opportunity for infrastructural development and as yet untapped consumer demand;

    • Rising car ownership, poor road conditions and a very low scrappage rate will all boost demand for automotive refinishes;

    • The Chinese end-user industries will be looking for coatings offering environmental benefits and safety features (like lead-free, VOC-free, formaldehyde-free etc.), plus more functionality, in order to meet stricter standards (particularly for products destined for export) and serve the needs of discerning consumers (especially the younger generations); and

    • Offshore engineering schemes and infrastructure development will bolster sales of marine and protective coatings.

    For more information on this report contact Cathy Galbraith at: cgalbraith@brggroup.com, or visit IRL, a division of BRG UK Ltd., on the web at www.informationresearch.co.uk.
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