Yongjiang Yan: Analysis of China's Coating Industry in H1, 2017

Yongjiang Yan, the Secretary General of China National Coating Industry Association, was the first speaker and analyzed the latest Chinese coating industry. Mr. Yan analyzed the external environments, downstream applications, the economic status and import & export of China’s coating industry. Major applications of coating included real estate, furniture, auto, household appliances, etc. Details in the China’s coating market were offered to the audiences.

Mr. Yan Was Making Speech

1. External Environment of China's Coating Industry

In H1, 2017, China's economy grew stably. The GDP had remained in the range of 6.7%-6.9% for 8 quarters.

CPI increased slightly from the low level. In H1, 2017, the CPI increased 1.4% year on year. The PPI's growth rate fell month by month.

Innovation drives the development: Big Data + Internet promotes the Made in China 2025.

Green Development and strict environmental protection supervision promoted the reform and development in coatings industry.

2. Coating Downstream Industries

3. Analysis of China's Coating Industry in H1, 2017

a. China's Coating Output Status

The total output of 1,358 producers reached 18.9978 million mt, up 7.2% year on year. The total output of 1,358 producers reached 9.641 million mt, up 10.5% year on year. The sales volume was 9.443 million mt. The sales-out ratio was 98.2%.

b. China's Coating Industry Main Businesses Income Growth Status

The income of 2,044 companies reached 435.449 billion RMB, up 5.6% Y-O-Y. The income of 2,044 companies reached 214.83771 billion RMB, up9.3% Y-O-Y. The profit was 13.63 billion RMB, down 15.1% Y-O-Y. The growth rate of output and profit tend to be stable. Coating industry will show a stable increasing trend.

c. China's Coating Industry Output Status (by Region)

Comparing the two charts above, the output in Central China and South China increased 3%. The output in Southwest and Northeast China declined. The total output in Central China, South China and East China accounted for 79%，the main businesses' income took up 83% of the total.

d. China's Coating Industry Income Rank

In 2016, according to the data from National Bureau of Statistics of the Republic of China, comparison for the income of 2,044 companies above designated size (1,927 after merge) is as follows:

The income of top 200 companies occupied 62%；

The income of  201~500th companies occupied 19%；

The income of top 500 companies occupied 81%

Around 25% coating companies hold around 75% market shares.

As for the top 200 coatings companies in 2016, there were 168 China-invested enterprises, taking up 84%.The income occupied 63% of the total.There were 32 foreign-owned enterprises, taking up 16%. But the income occupied 37%. Though the number of foreign-owned enterprises was small, the income was high, which meant the industrial concentration was high.

Chinese coating producers should speed up the merging and reorganization. Chinese producers should expand the brand influence and expand the business in the global market on the “One Belt One Road” policy.

e. Operation Status of Chinese and Foreign Enterprises

There were 168 China-invested enterprises and 32 foreign-owned enterprises. The proportion of companies' quantity was 9:1. The proportion of income was 3:1. The profit proportion was 8:5.  The average income proportion was 1:3. The average profit proportion was 1:5.3.

Though the number of foreign-owned enterprises was small, the income was high, which meant the industrial concentration was high. Chinese coating producers should speed up the merging and reorganization. Chinese producers should expand the brand influence and expand the business in the global market on the “One Belt One Road” policy.

f. Influence on Global Coating Market of China's Coating Industry

In 2016, China's coating output took up around 57% of the total in Asia-Pacific and took up around 28.5% in the global market. China's coating industry development plays a key role in the global market.

g. China's Coating Industry Main Economic Indicators

4. China's Coating Import & Export Analysis

a. Jan-Jul China's Coating and Pigment Import and Export

In Jan-Jul 2017, the import and export total value of China's main coating products was 888 million dollars, up 3.89% Y-O-Y. The import volume was 0.1 million mt and the value was 527 million dollars.The export volume was 0.11 million mt and the value was 36.1 billion RMB.  The data reflected the stable import and export trading in China. But the spread in value showed that the development of high-end products will be very important in China's coating industry.

5. 2012-2016 Coating Import And Export Statistics