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Upgrades in Coatings Formulations Broaden the Scope of the Paint Additives Market


London, UK Reflecting the trend in the European and the U.S. paint/ coatings market, there has been a slow but perceptible shift from solvent to water-based or high-solid coatings in China. This augurs well for the paint additives market, since more additives with various functions will be required to compensate for the reduced amount of solvent applied.


With the top ten global coating manufacturers having entered the Chinese market with their classic formulations and high-grade as well as high-performance coatings, Chinese coating counterparts have been encouraged to significantly increase the use of additives. This improved use has impelled the market to hike not only its volume of production, but also to enhance its technologies and functions.


The tremendous rise in the coatings production volume is very likely to cause a consequent increase in the use of paint additives. In 2004, the Chinese paint market had nearly 8,000 coatings producers that were rolling out 3,798,900 tonnes of product. This has benefited all additive segments of rheology modifiers, preservatives, as well as dispersants and wetting, flow/levelling and flatting, foam control, driers and catalysts, and film forming agents.


Chinabooming economy has also contributed in great measure to the development of industries such as real estate, automotive and infrastructure reconstruction, which in turn, will drive coating applications and therefore, paint additives that improve coatings properties and applications significantly. The Beijing Olympics 2008 and Shanghai Expos 2010 are expected to give a further fillip to the Chinese economy in future.


Hese events have enormous potential influence on many aspects in various industries, including the coatings market especially decorative coatings,?says Ms. Louise Zhao, Research Analyst with Frost & Sullivan. "Since many huge projects have to be undertaken for these events, it will facilitate the rapid expansion of the decorative coatings market.?P> As coatings formulations expand to include various applications, environmental concerns will simultaneously increase. The growing consciousness among the Chinese about the quality, credibility, health and environmental compliance of coatings has made consumers gravitate towards efficient, easy to handle and environment-friendly products.


This has generated significant demand for low volatile organic compound (VOC) emissions from coatings and environmentally safe paints that are either water-based or have high solids content, depending on the application.


Such moves toward environment-friendly formulations are expected to drive the additives market, since these paints need a larger amount of paint additives than traditional solvent-based coatings. Additionally, the Chinese Government is likely to pass building legislations regarding VOC levels in coatings on furniture and indoor decoration, which will hasten the shift towards water-based coatings.


Expanding demands on paints with various functions in gloss, colour and multi-proof promote upgrades of paint additives regarding quality and technology,?notes Ms. Zhao. owever, further expansion of the Chinese paint additives markets will be possible only if participants find solutions to the current macro economic control, fluctuating raw material and energy costs as well as intensive pressure from coatings manufacturers.?P> In 2004, China experienced substantial decline in investment in steel, aluminium, cement and real estate. Subsequently, affiliated coating segments including automotive and coil coatings were adversely affected, which had a resultant impact on the additives market.


To optimally tap market potential, paint additives producers need to focus on environmental and ecological concerns as well as multifunctional/universal/versatile innovation. They also have to integrate distribution channels and reinforce sales potential, engage in merger and acquisition as well as strengthen R&D core competence and customer relationship maintenance. These moves will help them to distinguish themselves and gain an edge over the other participants in this intensively price-competitive market.


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