Global Emerging Trends in the coatings market

WEI ZHANG

Regional Segment Manager Coatings, BU Additives

SEBASTIAN PROCK

Global Marketing Segment Leader Paints & Coatings, BU ICS

There is lots happening in the North American coatings market but, what are some of the trends emerging in other parts of the world? Clariant’s Wei Zhang, Regional Segment Manager Coatings, BU Additives and Sebastian Prock, Global Marketing Segment Leader Paints & Coatings, BU ICS take a look at China, one of the biggest, and fastest growing, markets outside North America.

Clariant image ZhangProck Teaser ACS 2020

Which market segments are feeling/experiencing the greatest impact from Chinese government mandated reductions in VOC emissions? 

General industrial finishes and protective coatings is a major segment that is impacted, as is decorative paints, including interior and exterior architectural coatings and wood coatings, that link directly to the environments in which people live. At Clariant we are seeing in these segments that low VOC is requested more and more often. This is the case also in the industrial coatings segment including containers and heavy machinery. A third is the automotive and transportation coatings segment where we now see that low VOC, water-based coatings are becoming more prevalent with General Motors launching its first water-based auto paints line in 2008, followed by VW.

What is the timing of the mandated VOC reductions for each segment?

In general, all coatings and ink manufacturers and coating application industries are impacted by the Chinese Central Government’s VOC reduction policy, with a target to reduce VOC by 10% by this year (2020). Since 2016, all manufacturers have paid a “VOC pollutant fee” but the entrance level, exemption range, and charging rates are different in different provinces. It’s clear that companies throughout the value chain are being impacted and there are lots of varied preparations underway. In some specific examples:

  • Solvent based paints are being further faded out and water-based paints are now dominating the Chinese market in some key segments such as decorative coatings, container coatings, etc.
  • Paint manufacturers prefer, in fact they need to, use greener additives in their formulations in order to capture the shifting market and changes to regulations.
  • VOC treatment equipment or recycling facilities, such as incinerators, are being upgraded to be far more efficient.
  • Paint manufacturers are developing new coating technologies such as no VOC paints, powders and UV coatings, high solid wet paint and water-based coatings.
  • Raw materials suppliers are also developing new products to fit new formulas, for example, raw materials for water-based and UV systems.

Companies with long term commitments to innovation and sustainability are clearly in a better position to meet the new market reality. As a raw material supplier, Clariant is developing and promoting green additives in the market, for example through our EcoTain® label to support customers through these policy transitions.

China is a unique market in that there are a lot of local raw materials suppliers and coating manufacturers, along with larger multi-national companies.  Are the local/smaller players approaching the transition in a similar manner to the MNCs/larger players?  Is one type of player better positioned for the transition?

China remains the most important growth market for most global chemical companies and it will not only continue to be a major importer of commodity chemicals over the next decade, but also for specialty chemicals. International companies have the more sophisticated products that will be needed in the coming stages of China’s economic development, driven by rising standards of living and increasing demand for consumer products from household goods to cars.

Is there anything else that readers would be interested in knowing or should be aware of regarding the changes occurring in the Chinese coatings market due to tightening of VOC regulations?

China has moved quickly to tighten regulations around VOC emissions and that has seen some manufactures suffer, but as it turns out, this has actually been good for the industry. Most manufactures with low VOC, high quality, innovative products are doing very well with non-VOC compliant competitors forced out of the market. At the same time, the government is also learning from the industry over more feasible measures to control VOC, with less negative impacts on manufactures.

Yet, VOC reduction is just one of the starting points of China’s environmental protection ambitions, the ultimate goal is to encourage the industry to use products with less, or no, harm to the environment. Environmentally compatible products, such as Clariant’s renewable materials, fit for these broader policy goals.

Globally, Clariant supplies to powder coating & liquid coating manufacturers in the wax area, investing heavily in more environmentally compatible solutions. We have already launched micronized waxes and additives for coatings application, based on renewable raw materials, which not only meet low VOC objectives but, at the same time, are greener.  In addition to VOC restrictions, PFAS-free solutions are currently a hot topic in different regions and some applications in China may be impacted.

 


Part of this content to be published in the March 2020 issue of CoatingsTech. Article: Chinese Government Regulations Driving Adoption of Low-VOC Coatings by Cynthia Challener, CoatingsTech Contributing Writer.