Global Coatings Giant Paints Rosy China Market Picture

Axalta Coating Systems, a leading coatings manufacturer, has opened a technology center and plans to invest more in China.

The U.S. company opened its 15,500-square meter Asia Pacific Technology Center (APTC) in Shanghai earlier this month.

HUGE MARKET

Axalta chose Shanghai for several reasons. The company's Asia Pacific headquarters are already located there and the local government has been very supportive in setting up the center, as the city positions itself as an innovation hub, said Charlie Shaver, Axalta chairman and CEO.

"Shanghai has impressive plans to set up an international sci-tech innovation center. Axalta is proud to be part of this vision. And, I can assure you that we are committed to working with each segment of the entire industrial chain to drive the development and application of technology," he said.

"The majority of our organic growth today comes from China," Shaver told Xinhua during an exclusive interview, adding that coating business revenue growth in China grew at a much faster pace than in North America and Europe.

He admitted that the slowing Chinese economy to some extent weighed on the expansion of the industrial coating business, but the booming Chinese auto market was buttressing its transportation coating and refinishing business.

China's economy grew at 6.7 percent in 2016, its slowest pace in about a quarter of a century.

The Philadelphia-based company reported a net sales revenue of about 1 billion U.S. dollars globally in the first quarter this year, driven by sales volume growth of 8.9 percent year on year, with its transportation coatings net sales rising 2.1 percent to 421.4 million dollars in the first quarter, it said in its quarterly report.

LOCAL SOLUTIONS

"The Chinese coating industry is very competitive, with major international and good domestic coatings players on the market, while consumers are demanding more innovation and local solutions," said Shaver, who has visited China once every quarter in recent years.

"The APTC is designed to put customer needs first and serve them with the very best we have. The APTC will be the best example yet of Axalta's commitment to innovation that enables customers to maintain a competitive edge and achieve long-term success," he added.

With a current employee base of 300 and capacity for 500, the APTC joined Axalta's worldwide network of four global technology centers and more than 30 laboratories.

In addition to laboratories, the APTC housed a refinishing training center (RTC) and color development center, the largest such facilities within the company. The laboratories include a coating R&D laboratory, a coating system testing laboratory, and a transportation application laboratory.

"Many customers in this region are interested in transitioning to sustainable waterborne coatings and spraying systems. The RTC is equipped for such training," said Shaver.

"That means our talented China team will have the opportunity to work with, share expertise and learn from international colleagues, as part of a single global R&D organization," he added.

In practice, that means developing new coating applications, next generation paints and creating new colors, he said.

Axalta, an industry leader in coatings for vehicles, buildings, and pipelines, has been doing business in China since 1984.

It has a waterborne coatings facility in its Shanghai Jiading plant, another plant adjacent to Jiading, a plant in Changchun in northeastern China, and five powder coating operations in collaboration with joint venture partners.

Shaver said the company was delighted with the investment and business collaboration with local partners over the past decades.

"Chinese clients know their business very well and are good at explaining their challenges in finding solutions. Chinese customers are becoming more sophisticated, and we are sharing the best global practices with Chinese local body shop owners," he added.

He observed that customer expectations in places like Shanghai were different from those in smaller cities.

The company's combined investment in China has surpassed 100 million dollars since 2013 and plans to build a new factory in Nanjing in eastern China.