In the vast territory of the global coatings industry, the Asia-Pacific region continues to attract the attention of the global industry with its huge market size and strong growth potential. According to Orr & Boss Consulting, an authoritative market organization, "The Asia-Pacific coatings market is the largest in the world. ”
The market is not growing as fast as it used to be due to slower economic growth. "But in the long term, we expect the region to return to growth due to positive economic and demographic trends." Orr & Boss estimates that the Asia-Pacific coatings market is worth US$89.4 billion, with production of 28.3 billion litres. This figure is not only an affirmation of the region's importance in the global coatings landscape, but also a harbinger of its future growth potential.
图源：Orr & Boss Consulting Inc
In this huge market, countries such as China, India, Japan and Korea, with their unique economic dynamism and market demand, have become key forces driving the market forward.
China: A "strong magnetic field" to attract capital
As the largest coatings market in the Asia-Pacific region and even in the world, China's dominance is self-evident. Affected by the current downturn in the real estate market, China's architectural coatings showed a flat or declining trend, and the superimposed manufacturing industry was flat, although the recoating field remained stable and showed some growth, the growth of China's coatings market is still limited.
However, thanks to the huge economic size, rapid urbanization and continuous investment in infrastructure construction, the demand for coatings in China continues to be strong - from residential buildings to commercial buildings, from roads and bridges to rail transit, the rapid development of each field provides a broad market space for the coatings industry. In addition, with consumers' increasing attention to the concept of environmental protection and health, green, low-carbon and high-performance coating products have gradually become the mainstream of the market, which has further promoted the transformation, upgrading and high-quality development of China's coating industry.
As a result, Orr & Boss expects China to continue its limited growth for the rest of the year and next year, before starting to see a partial recovery in 2026.
Perhaps it is precisely because of this that many overseas paint giants have come to China to invest. According to data from the Ministry of Commerce, in the first eight months of this year, China established 36,968 new foreign-invested enterprises, a year-on-year increase of 11.5%, and China is still a "strong magnetic field" to attract global capital.
Among them, there are many giants in various fields such as AkzoNobel, PPG, Sherwin-Williams, BASF, and Covestro.
Following the announcement last year that it had started construction of its world's largest thermoplastic polyurethane (TPU) production site in Zhuhai, Covestro recently announced that it will build a new TPU Asia-Pacific Application Development Center in Guangzhou. It is reported that the new development center will complement each other's advantages with Covestro's Changhua R&D center and Zhuhai production base in a three-place collaboration to generate stronger regional synergies, and at the same time be close to TPU industry clusters in China and the Asia-Pacific region, especially for paint protection films (PPF), special cables, consumer electronics, footwear materials and many other extrusion and injection molding applications.
Since the establishment of the company in Tianjin in 1994, it has been deeply involved in the Tianjin Economic and Technological Development Area for 30 years, and the United States coating giant PPG has continuously expanded its investment in China and built the PPG Tianjin plant into its largest coating production base in the world. A few days ago, PPG Coatings (Tianjin) Co., Ltd. invested another 50 million US dollars in the field of research and development, expanding new products, seizing new markets, accelerating the development of new quality productivity, and consolidating its technological leading position in the coating industry.
PPG Global Coatings Innovation Institute
According to the Ministry of Commerce, in terms of origin, in the first eight months, Germany's actual investment in China increased by 5.4% (including data on investment through free ports). This growth of 5.4% is estimated to have made a significant contribution to BASF. Previously, BASF said, "Investing in China is investing in the future, and in the next 10 years, three-quarters of BASF's production capacity will come from China." "As we enter 2024, BASF's investment and cooperation in China will become more and more frequent, almost every month, which shows our long-term confidence and commitment to the Chinese market.
Source: New Chemical Materials
As the world's largest paint producer and marketer, China has always been one of the most important strategic markets for AkzoNobel. For a long time, AkzoNobel has invested intensively to expand the production capacity of multiple production bases in China to meet the current market demand for high-performance coatings, and demonstrates its confidence in the future development prospects of China's economy and coatings market.
AkzoNobel Protective Coatings (Suzhou) Co., Ltd. plans to invest 36.5 million yuan to increase production and improve the quality of the original coatings in the factory; AkzoNobel Functional Coatings (Shanghai) Co., Ltd. plans to expand the production of solvent-based packaging coatings by 15 million yuan; Functional Coatings (Changzhou) Coatings Co., Ltd. plans to build a 76,000-ton high-performance coating project and set up a research and development center.
In the field of decorative coatings, the two companies in Langfang and Shanghai plan to transform and expand their technology respectively, adding a total of 232,800 tons of water-based decorative paint production capacity, bringing the total production capacity in China to more than 900,000 tons. In addition, AkzoNobel has further expanded its position in third- to fifth-tier cities through the acquisition of the architectural decorative paint business of China Resources Paint. According to the 2023 annual report, this acquisition contributed 2% growth to the company.
AkzoNobel Protective Coatings (Suzhou) Co., Ltd
The rise of India, Japan and Korea
With its large population base and fast-growing economy, India is an important market after China.
With the India government increasing infrastructure construction and urbanization, the demand for architectural coatings and industrial coatings is growing, providing a broad space for the development of coating enterprises. At the same time, India consumers' requirements for the quality and performance of coating products are also increasing, prompting companies to continue to develop and innovate to meet market demand.
Orr & Boss Consulting has said India is the largest market in South Asia, accounting for more than 80% of the region's coatings industry. Despite the challenges of the pandemic, the India coatings market will rebound rapidly and continue to grow rapidly, with the India coatings market expected to reach $11.2 billion in 2023 and expected to reach $16 billion by 2028.
Relevant data show that India was initially dominated by a few major companies: Asia Coatings, Piaget Coatings, Kansai Nile Lac, AkzoNobel (India), and the cumulative market share of the four companies in India Coatings in 2023 is about 70%. However, with the growth of the India market, in addition to Jordan, Axalta and other established paint companies, more and more large groups have entered India, such as Grasim Group, Astral, JK cement, JSW coatings, etc., and China's 3C paint leader Matsui shares are also in the queue.
Japan and Korea, as developed economies in Asia, are industry leaders in technological innovation, product quality and brand influence, and their coatings markets also have a non-negligible influence.
It is understood that Japan and Korea jointly occupy 14% of the Asia-Pacific paint market. The Japan market is dominated by Nippon Paint and Kansai Paint under the control of Singapore capital, and the economic growth is slow and the market tends to mature; Korea, on the other hand, continues to see growing demand for coatings, driven by its automotive and electronics industries, with major players including KCC Corporation and NOROO Coatings.
With the continuous exploration and practice of environmental protection, energy saving, intelligence and other fields in the two countries, the coating industry is gradually developing in a greener, more efficient and intelligent direction. In addition, the active performance of the two countries in international trade has also injected new vitality into the globalization process of the Asia-Pacific coatings market.
The "fall" of the European market
The Asia-Pacific paint market is "unique in scenery", but the European market is slightly "depressed".
According to statistics from Orr & Boss Consulting, global paint sales growth will be flat in 2023, down 0.1%, and paint output value will increase by 4%. The fastest growing regions in 2023 are Asia and the Middle East, with the European market continuing to decline throughout the year, with production falling by 3.8% and output rising by 3.7%. And made a forecast that in 2024, the global coatings market is expected to increase sales volume by 2.6% and output value by 3.8%.
Projected global paint and coatings production growth rate in 2023 and 2024 (Source: Orr & Boss Consulting Inc)
Since the beginning of this year, the European market is still facing the problem of energy crisis, high energy costs, and many uncertainties in the market, so that many paint companies have stopped their production lines in European factories, and triggered a series of layoffs. (Recommended reading: "Selling businesses and shutting down factories has become the norm, BASF, PPG, Evonik and other giants "cut meat to save themselves")
Compared with the European market, it can be seen that the Asia-Pacific coatings market occupies a pivotal position in the global coatings industry, but the pressure and challenges brought about by the current global economic slowdown cannot be ignored. In the face of the opportunities and challenges of the future market, coating companies need to keep up with the pace of the times, continue to innovate and develop to respond to market changes and grasp development opportunities.