China Coatings Industry: High Profit Must be Driven by Advanced Technology

After the crisis, the paint industry in China began to slowly recover, but still faced a lot of problems, China's paint industry is still in the "three low" sales bottlenecks.

At present, China's paint market has more than 200 billion yuan in sales in the past year and it is increasing every year. Correspondingly, there are more than 10,000 paint companies in the country. Although they are concentrated in the low-end market, the domestic market is huge and their lives are still good.

What worries us is that high-margin products are almost never owned by domestic companies. iPhone shell coatings, car paints for cars, and even toy high-grade paints are not imported, they are produced using imported technologies. In the 200 billion yuan of paint market, foreign-funded enterprises accounted for more than 60% of the share, but in the high-end products, the share was more than 90%. Henkel, Bayer, BASF and other 10 chemical coating companies in the world have established Asian R&D centers in Shanghai. Even during the global financial crisis, these companies can maintain a 30% growth rate in the Chinese market.

“Not only is the high-end coating technology currently in the hands of foreign companies, it is estimated that it will not be held by domestic companies in the next 5 to 10 years. If domestic companies want to invest in the future, they will have to invest at least 10 years in technology, which is the majority For medium-sized private enterprises, the cycle is too long, said market participants.

First of all, the R&D expenditure is small, which is a common problem for China's paint companies and also for companies in most other industries. Statistics show that China's paint industry spends less than 1% of its total sales on research and development each year, less than 2% of South Korea, and even less than 5% of developed countries, the absolute value of funds is even lower.