Powder Coatings Break Into Wood Furniture Market

Environmental benefits drive quick growth of powder coatings market

Powder coatings contain no solvents and release no volatile organic compounds (VOC) into the environment. Thus, there is no longer a need for extra investments to purchase costly pollution control equipment. Powder coatings can produce thicker coatings than conventional liquid coatings easily. Multiple benefits linked with powder coatings enables the market of powder coatings to grow quickly worldwide. Double digit growth in the powder coatings market has been seen in China for several years and the total output of powder coatings in 2016 is estimated to be approximately two million tons. Foreign brands such as AkzoNobel and Axalta control the high-end segment of the Chinese powder coatings market, but Chinese powder coatings companies are quickly catching up both on technology advancement and on individual company’s production capacity.

Domestic powder coatings companies speed up their growth in a positive market environment

Powder coatings are usually applied on metal surfaces because of powder coatings’ excellent protection properties and surface decoration performance. With footsteps all over China now, AkzoNobel is without a doubt the number one powder coatings company in the local market. Based on the company’s H1 financial statement, their industrial and powder coatings revenue was up 11 percent. Demand trends were positive for Asia and powder coatings continued to show strong growth momentum. The growth of AkzoNobel’s powder coatings division in Asia, especially China coincides with positive developments in several major downstream markets for powder coatings, including home use electric appliances, automotive and construction. For example, from January to May in 2017 China sold a total of 643 billion yuan of home use electric appliances, an increase of 15.9 percent over the same period of 2016.

With relatively low starting points in the market Chinese powder coatings companies are actively expanding their customer base and increasing their capacities so as to enlarge their competitiveness generated from economy of scale. Fujian Wanan Group is a major domestic powder coatings producer in south China. The company recently reported that their sales increased by 36.7 percent in the first half of 2017. And the company is constructing a new 20,000 tons per year powder coatings plant, and will put the new capacity into operation in 2019. Anhui Meijia New Materials Co., Ltd. increased their sales by 17.55 percent in the first six months of 2017 compared with the same period last year. Their net profit also increased 57.48 percent in the same period.

Meijia’s customers include some major electric appliance brands such as Midea, Aux and Changhong. Midea Group is the largest home use electric appliance producer in China, if not in the world. 

Chinese powder coatings companies introduce powder coatings to new applications.

Market competition is getting fiercer in traditional downstream markets for powder coatings. The growth of some markets such as automotive is slowing down too. So it is inevitable that some powder coatings companies are trying to break into new markets, such as the wood furniture market. 

The market potential for wood furniture is huge in China.  In 2016, the revenue of the Chinese furniture industry was 855.9 billion yuan, an increase of 8.57 percent over 2015. And in the first three months of 2017 total revenue of the Chinese furniture industry grew by 12.61 percent, and total profit increased by 12.47 percent, compared with the first quarter of 2016. Furthermore, environmental benefits and shorter curing periods for powder coatings compared with liquid coatings are driving more and more companies to carry out valuable experiments.

Dojon Powder, a subsidiary company of Doxu Chemicals, is actively promoting the  powder coating process into the wood furniture market.  Right now the company said they have the ability to coat medium density fiberboard (MDF) and other wood panels with powder coatings. Because the market acceptance is not high for powder coatings to be applied on wood surfaces, Dojon does a lot of work promoting their powder coating process and demonstrating their coated wood panels to their potential customers.

Similar to the American market, powder coating manufacturers in China are fighting hard to get into new applications. The companies focused on liquid coatings consider powder coatings producers competitors. Technical service engineers of liquid coatings companies are unwilling to share information on customer demand with powder coatings chemists, sometime even within the same company. This somewhat restricted the market development of powder coatings.

But the fundamental obstacle for powder coatings to grow into new applications is the development of powder coatings technology itself.  Powder coatings process needs curing ovens, electrostatic treatment, etc. The customer may not want to invest extra time and capital to learn a new technology, especially when they have installed a painting process, which adopts water-based coatings.

After all, the motivation behind changing solvent-based coatings to water-based coatings in China is the introduction and implementation of more and more environment protection regulation. And if water-based coatings solved the pressing environmental problem, why bother to make extra efforts?

It is foreseeable that the process for wood furniture to be coated by powder coatings in a large scale will be tedious for the companies who pursue this direction and slow for the whole market to witness. It is only in the initial trial run stage for powder coatings to be adopted by wood furniture companies at the moment. Although some companies have already pioneered the development for powder coatings to be used on wood panels, most leading wood coatings companies such as Carpoly and Dabao are still observing cautiously this new trend, and large scale market activities are still rare in the market. But one optimistic phenomenon is that powder coatings companies are not alone to push forward this new trend and some home furniture brands like Boloni are actively involved into this process too. In July Boloni, Allnex and Aleco worked together to introduce wood furniture painted with powder coating in July in Guangzhou. Aleco, founded in 2016, has a demonstration powder coating plant in Foshan, Guangdong province.