Arnold Wang, China Correspondent07.14.16
UV curable coatings (UV coatings) have entered fast development in recent years in China. Several reasons contribute to the fast growth of UV coatings. One major reason is the hube pressure from society for improving the environmental situation in China. This has facilitated the growth of UV coatings because UV coatings release almost no VOC into the environment. UV coatings are listed as an environment friendly coatings variety whose development is encouraged by the Chinese coatings industry.
It is estimated that China right now has approximately 50 UV coatings manufacturers and a total annual output of 120 thousand-160 thousand tons of UV coatings. And approximately 44 percent of the UV coatings produced in China were used to paint wood products, including wood furniture, wood floors and wood doors. In the wood products segment, UV coatings were first adopted in the manufacturing of wood floor products, and later on UV coatings were introduced to paint wood furniture.
Plastic products are the second largest market segment for UV coatings, which can be found on automotive components, mobile phones, electronic appliances and computers, etc. UV coatings or inks can also be seen on paper, porcelain, metal, glass, etc. But compared with plastics and wood segments, the other segments only hold small percentages in the total volume of UV coatings applications.
The challenges for promoting UV coatings comes from the high unit price of UV coatings compared with traditional PU and PE coatings and extra investments needed for the construction of UV coating production lines. And the UV coatings companies are aware of these challenges when promoting UV coatings in the market and try their best to provide value based solutions to meet the needs of their customers.
Large UV coatings producers provide solutions instead of merely products
The application of UV coatings normally demands a company to invest in new coating machines and UV curing machines, which could be worth of millions of RMB. To master the whole coating process, the operators need many hours of comprehensive training. To cater to the needs of downstream customers, some UV coatings producers such as Changrunfa, Huilong Paint and Carpoly worked closely with their customers to make sure the UV coating lines deliver high quality products.
Changrunfa is one of the largest domestic UV coatings manufacturers in China. Right now the company has set up coatings manufacturing bases which cover all the regions of China, located respectively in Chengdu, Shanghai, Beijing, Tianjin and Guangdong. Their Tianjin plant, the last production base put into operation by Changrunfa has a total investment of 150 million RMB and can produce approximately 30 thousand coatings and 20 thousand coatings resins. The company’s business not only include UV and waterborne coatings but also include painting equipment and coatings resins. In 2015 Changrunfa announced that their first environmental painting service center was officially opened in Zhejiang province, and 30 painting service centers are planned to be established throughout China in the future.
Huilong Paint is a leader in providing UV coating solutions for the wood door market, with half of the top 30 wood door producers using Huilong’s coatings currently. Although Huilong is a pioneer in developing UV coatings technology for wood door applications, the company is facing fierce competition from other companies. The technological difference between different UV coatings products for wood door market segment is not big. Furthermore, the growth of the Chinese wood door market is slowing down. Based on the information from the China Timber & Wood Products Distribution Association, the total production value of China’s wood door industry was 120 billion RMB, increased by 4.3 percent, much slower than their growth speed in 2014, which was approximately 7 percent. The wood door industry is entering a period of industry integration. Among over 3000 wood door companies in China, some of them will be eliminated or merged into other companies because of market competition. Entering 2016, approximately 60 percent of the wood door producers experienced a decrease of output in February.
The market environment and the characteristics of UV coatings lead to the fact that the wood products customers need more and more customized solutions from UV coatings companies, a trend which that challenges UV coatings companies to provide both quality coatings and efficient and quick services. Skill trainings, production line adjustments and improvements and technical support are all expected after the customers decide to invest into UV coating production lines. Not a single UV coatings producer can meet the needs of all the customers. Strategic partnership is needed more than ever before. This pushed UV coatings companies to develop more talents, a reason that many UV coatings companies organized training classes and established service center and schools in the last two years.
Huge growth potential still waiting to be tapped into
UV coatings can be used for anticorrosion purposes, including oil pipes, food and medicine packages, as well as food and beverage cans. And beverage and food industries are still experiencing quick growth in China. Based on the statistics from China National Food Industry Association, in 2015 China produced approximately 177 million tons of beverage drinks, increased by 6.23 percent over 2014. And the total tea drink’s market value surpassed 50 billion RMB in 2015, increased by 10.6 percent over 2014. Besides food and beverage drinks, some other market segments also provided growth potential for UV coatings in China.
Telecommunication market is growing fast in China. Because of a high technical barrier for UV coatings in this market, Shanghai PhiChem Material Co., Ltd, who is the largest supplier of UV coatings used on optical fiber in China, increased both their revenue and profit in the last two years. The company’s revenue was increased to 432 million RMB in 2015 to 323 million from 2013, and their net profit was increased by 60.79 percent in the same period of time to 105 million RMB, leading to a high profitability of 24.35 percent. Alos, the development of broad band network and 4G(5G) construction provides growth potential for PhiChem in the future.
In addition, continuous growth of the automotive industry and new applications of UV coatings in 3D printing are also offering new opportunities for UV coatings.
