Coating industry enters reshuffle after finishing period

Since 2006, the paint industry has enjoyed a good momentum of growth, with an average monthly growth rate of 21%; China's paint output has exceeded 3 million tons and will soon exceed 4 million tons. However, the paint industry in China is very fragmented. Thousands of companies are distributed around the country, which is not conducive to the adjustment of the industrial structure and the development of the market. The merger and acquisition of the industry is inevitable. In 2007, with the intensified competition in the industry, some non-standard enterprises will be eliminated and the market will usher in new opportunities.
Since 2006, the merger and acquisition industry in the paint industry has become increasingly strong. “Wind Source” is the paint market with huge potential in China. The flagship M&A event in the paint industry was that Valspar acquired 80 percent of China Resources Coatings for US$281 million; in addition, PPG announced a further RMB115 million in August after it acquired some assets of Shanghai Senpu Building Materials Company in early 2006. U.S. dollar acquired Ameron International's specialty coatings and coating business and 50% of Korea's Linchun Group. The intensification of mergers and acquisitions of foreign companies is mainly due to three reasons: First, to expand market share. For example, Aksu-Nobel Group plans to achieve sales of about US$1 billion in China by 2010. To achieve this goal, the group has invested US$240 million in total and established 21 factories in Dongguan and Jiaxing. , Its production of wood coatings and other varieties have been in the forefront of the domestic market. The second is to extend the sales network. For example, after the Dutch DSM Group acquired Guangdong Xianda Synthetic Resin Company, its sales in 2005 exceeded US$30 million. The third is to enter the new field of the paint market in a timely manner, and use its own scientific and technological advantages and brand advantages to quickly occupy the areas where domestic enterprises cannot achieve technical strength. US Sherwin-Williams and Shanghai Jin Litai jointly formed Shanghai Xuanwei Litai Company, which is intended to occupy the surrounding automotive paint market.
In the field of architectural coatings with the largest market, fastest development and strong demand, foreign-funded paint brands have stepped up their promotion campaigns, which are mainly reflected in the use of their comprehensive advantages, seizing domestic high-quality customer information, and signing strategic cooperation agreements with national real estate development giants. In November 2006, Bayer MaterialScience AG signed a joint brand agreement with Shanghai New Opel Chemicals and Shanghai Ivy Chemicals. According to the agreement, the two companies use Bayer MaterialScience's "WoodCover" trademark on their product packaging and sales materials. In fact, the first signing of a strategic cooperation agreement was the foreign capital coating giant with strong capital from some brands such as Nippon ICI and ICI. According to reports, ICI has signed strategic cooperation agreements with several real estate companies such as Vanke Real Estate and Beijing Sunshine 100 Real Estate Group. In order to strengthen public relations, these foreign companies have added "large customers" to specialize in serving important customers. It is reported that in order to cope with the challenges, domestic related companies such as China Resources and Garboli have also acted and set up a large customer department to step up contact with real estate developers. In 2007, the market competition in the field of architectural coatings will become more intense.
At present, the paint industry has entered a period of reshuffling. From an industry perspective, the coating industry has unlimited business opportunities. From oil paints to water-based paints, from acrylic paints to fluorocarbon paints, and from flat paints to texture paints, the market is increasingly subdivided; from the brand point of view, the stronger the strong, the weaker. The weaker the “Matthew Effect” is, the more obvious is the effect. There are fewer and fewer paint companies that can fully participate in the competition, and the degree of brand concentration is getting higher and higher. From the appearance point of view, M&A integration is only a kind of commercial activity and market. Actually, the pace of expansion of large enterprises is accelerating. In 2007, with the consolidation of the domestic paint industry will speed up, the industrial concentration will further increase. It can be foreseen that in the next few years, a strong coating company will carry out resource allocation and structural adjustment in its own way, and seek for new economic growth points through scientific and technological progress, industrial transformation, enterprise expansion, and institutional innovation, on the other hand. Eliminating outdated production capacity will provide the impetus for the sound development of the industry.
With the approaching of the Beijing Olympic Games, paint companies will continue business opportunities in 2007. The key to the Olympic Games project is that in 2007, there will be more than 16 billion yuan in paint business opportunities from the venues and supporting facilities alone. In the second half of 2007, the peak of architectural coatings development. The bidding for Shanghai's “World Expo” project has also begun, and coating companies will usher in a rare market opportunity. China is building a society where people can live in harmony with nature, with external wall coatings and thermal-control paints that reflect solar energy, and gradually become the focus of research and development. Anion wall coatings with clean indoor air performance will become Market darling. According to the "Eleventh Five-Year" development plan of the chemical industry, the paint industry should vigorously develop energy-saving, environment-friendly and durable coatings, such as water-based coatings, powder coatings, radiation-curing coatings, organic silicon, organic fluorine-modified acrylic coatings, and heavy-duty coatings. , and special paints and other special features. Experts predict that from 2006 to 2010, China's paint sales growth will still reach about 60%.

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