Independent Innovation Drives High-Quality Coatings Industry Development During China’s “14th Five-Year Plan” Period
Click:0    DateTime:Dec.14,2021

By Editorial Department of China Chemical News

China’s coatings industry made a series of achievements during the “13th Five-Year Plan” period but profits fluctuated widely, with homogenous competition intensifying. The industry shall enhance independent innovation, basic and application researches during the “14th Five-Year Plan” period to improve development quality.  

Output increases 7.44% YoY during the “13th Five-Year Plan” period, more output in the south than in the north

Domestic coatings output increased from 17 176 kt to 24 591 kt during 2015-2020, with the average annual growth rate at 7.44%. While main business income dropped from RMB418 484 million to RMB305 434 million over the period. This showed serious product homogenization and intense lower-price competitions of the coatings industry.    

The regional distribution reflected that the coatings output was more in the southern regions than that in the north. Take five-year combined production volume for comparison, Guangdong, Shanghai, Jiangsu, Sichuan, Hubei and Hunan together accounted for 61.19% of total domestic coatings output, of which Guangdong took a share of 19.71%. 

Problems facing the coatings industry

1. Environmental-friendly coatings technology and product system not perfect 

Environmental-friendly coatings ushered in accelerated development during the “13th Five-Year Plan” period, amid the collection of consumption tax and the release of related national and local environmental protection regulations, policies and standards. In 2020, the output of environmental-friendly coatings (including water-based, powder, radiation curing, high-solid and solvent-less coatings) covered 60% of the domestic total. But there is a long way to go for the substitution of the environmental-friendly products for the traditional ones. 

2. Product structure needs optimizing 

Bottleneck problems for the development of environmental-friendly coatings need to be broken, such as raise the cost performance of domestically made water-based coating resins and additives, accelerate their commercialization, develop powder coatings with thin coating, good leveling and low temperature curing, develop coatings with high-solid content and low viscosity suitable for industrial use and environmental-protection radiation cured coatings with reasonable cost performance etc. 

Added value of coatings products has growth room. Statistics showed that China exported 19.7 kt of coatings in 2020, with the average export price at US$322/ton and imported 17 kt of coatings, with import price averaging US$748/ton. The average export price was only 41.58% of the average import price, reflecting that China’s coatings products have low added value. 

3. Coatings enterprises have low economic scale, international competitiveness  

The domestic coatings industry faces fierce homogenous competition, low products added-value and low industrial concentration. In 2019, the top 100 companies accounted for 42% in the total revenue of the main business of China's coatings industry, the companies ranked 101-200 took up 15%, 201-500 covered 21%, 501-1 000 contributed to 14% and companies ranking after 1 000 together accounted for 8%. However, the industrial concentration level increased compared to the data during the early part of the “13th Five-Year Plan” period. 

4. The additives industry displays multiple problems 

On one hand, not enough attention has been paid to the research, development and research on the application theories of additives. The theoretical research on the application of additives can bring a clearer direction and more possibilities for additives development and can improve the application efficiency. The domestic coatings industry is in rapid development, but the research and development focus is mainly put on resins and formulas, with less attention paid to the additives research and development personnel. As a result, the research and development speed of many additives manufacturers is relatively slow, and there are limitations in the training and introduction of high-end talents.

On the other hand, high-end additives are dominated by overseas counterparts. The domestic additives industry shall put more efforts in imitation and innovation. At present, many coatings companies’ testing of additives are mostly based on certain physical and chemical properties and their judgement of the stability of additives are reliant on the brands of additives producers. During the “13th Five-Year Plan” period, some industry standards were set up for conventional additives products, but the industry standards for certain single-type products needs further improvement and refining. 

Development focus during the “14th Five-Year Plan” period

The coatings industry is committed to meeting the demand of national economic construction and people’s livelihood, especially the demand for new infrastructure construction and new urbanization construction, to providing high-performance and special functional coatings, to ensuring stable supply along the industrial chain and gradually realize independent control, to resolutely implementing the strategy of expanding domestic demand and sustainable development.  

1. Construction coatings

The development of construction coatings will slow down in the coming five years amid the slowing national economic growth. The driving force of construction coatings will shift from real estate investment to both the real estate investment and old house renovation. Against this background, focus shall be put on the exploration of new downstream application areas to find new growth poles for the industry.  

2. Wood coatings

The wood coatings industry shall adhere to the concept of high-performance and sustainable development, with independent technological innovation as the core, quality upgrading as the focus and carry out product research and development and technical innovations in a systematic, platform-based, systematic and serialized way and gradually forge a batch of core materials, products and technologies with independent intellectual property rights and leading the industry development. The category segmentation and structure of wood coatings will change significantly with the market development. UV and water-based environmental-protection products will have huge growth potential. 

3. Industrial anticorrosive coatings

The industrial anticorrosive coatings market will further grow. On one hand, demand for anticorrosive coatings as raw materials for infrastructure construction will increase. On the other, industrial anticorrosive coatings, which provide safety and protective functions will receive more attention and find more applications. The product structure will still focus on high-performance anticorrosive types, such as epoxy and polyurethane (PU). High solid content coating products will be the next stage development focus. As for water-based coatings, output of water-based acrylic and water-based alkyd for light corrosion protection will increase rapidly. The application of water-based epoxy, water-based PU, water-based epoxy zinc-rich and water-based inorganic zinc-rich coating products for medium and high corrosion environments will also gradually expand.

4. Automotive coatings

China’s auto output is expected to enter the stable growth phase during the “14th Five-Year Plan” period, with more new energy vehicles produced. The scientific and technological development of automotive coatings during the "14th Five-Year Plan" period is to focus on the development of environmentally friendly products with low volatile organic compounds (VOCs) content, water-based, high solid content, powder and others and the compact construction technology, basically realize the localization research, development, manufacturing and product upgrading, realize green, environmental-protection and sustainable development.   

Key research and development projects include: cathodic electrophoresis paint that can be matched with silane/zirconium salt and other green and environmentally friendly film pretreatment materials, no heavy metals, high penetration, and high smoothness, and the development of low-temperature baking electrophoresis required for the coating of new energy vehicles; water-based/high-solid automotive coatings and compact coating processes; development of a new generation varnishes, including matt, scratch-resistant, self-repairing, self-cleaning (dust-free) varnishes and water-based varnishes; development of high chroma, highly decorative color paint, with changeable flashing feeling, deep body feeling, etc.; develop low-temperature baking topcoat system, test line integrated coating of plastic parts and car body, realize energy-saving and efficient new coating process; accelerate the deep localization of technology and realize the localized development of new technologies.

5. Marine coatings 

New standards, laws and regulations are being implemented or formulated in recent years, which are poised to impose significant impact on marine coatings. China has actively participated in the formulation of new international standards and regulations and established a marine coating working group and China IMO standards convention response team. The release of these new laws, regulations and standards will further enhance the development of marine coatings. Currently, marine coatings are mainly solvent coatings and high solid content coatings will increase gradually to meet environmental-protection requirements.  

6. Coil coatings

Large-scale and specialization is the overall trend of coil coatings industry development. Lower VOCs content and environmental-friendly, green coil coatings with no heavy metals will gradually replace the current coatings system. China’s national “13th Five-Year Plan for the Prevention and Control of Volatile Organic Compounds Pollution" clearly put forward the requirement to increase the control of industrial coating VOCs. As for coil coatings industry, the treatment focus is on the fully promoting the use of automatic roller coating technology, strengthening the collection of baking waste gas, raising the collection rate of organic waste gas to over 90% and the construction of combustion and other treatment facilities to achieve the emission standards. 

7. Marine engineering coatings

China has a long coastline and broad prospects for the development of marine resource equipment. It is necessary to actively carry out the research and development of far-reaching fishery equipment such as far-reaching sea aquaculture platforms, cold chain transportation and processing, establish a marine space resource equipment system, promote the development of equipment such as offshore structures, prefabricated factories, deep-sea space stations, deep diving working mother ships, deep-sea manned submersibles and deep-sea exploration robots, and strengthen the development of equipment including offshore wind energy, wave energy, tidal energy, temperature difference energy, etc.  

It is necessary to constantly develop marine engineering coatings materials to meet the requirements of different equipment and environment. High-performance, low-energy-consumption and pollution new-type coatings remain the key development direction for marine engineering coatings. Of these, high solid content coatings register the fastest growth pace and is one of the mostly widely applied marine engineering coatings. Since its construction performance and required construction conditions are basically the same as those of existing solvent-based coatings, it will play an important part in industrial applications in the future.

Due to the strict anti-corrosion requirements of the marine environment, some properties of domestic water-based anti-corrosive coatings cannot reach the level of similar solvent-based anti-corrosive coatings, especially for applications in corrosive environments above C5, and their performance needs improving. With further increase in R&D investment, water-based anti-corrosive coatings are poised to occupy a place in the marine engineering coatings market. High-performance coatings such as polyorganosiloxane, polyaspartate, and solvent-free epoxy coatings have gradually been applied in the marine engineering coatings and have bright market prospects.

8. Construction machinery coatings

Increasing environmental protection concerns are making a hit on the traditional solvent construction machinery coatings market. Developing environmental-protection and green products, and focusing on innovation have become the industry consensus. Demand for low VOCs construction machinery coatings is growing. 

    The implementation of environmental-protection policies to reduce VOCs will accelerate the transformation of traditional solvent coatings to environmental-friendly coatings, such as high solid content, water-based and powder coatings. Improving the environmental friendliness, corrosion resistance, stain resistance, and durability of construction machinery coatings, pursuing higher appearance quality, and adaptability under various environmental and climatic conditions, and reducing the curing temperature of coatings used for construction machinery will be the main direction of the coatings research field.