Global coat­ings gi­ant paints rosy China mar­ket pic­ture

China Daily (Hong Kong) - - BUSINESS -

BEI­JING — The chief of US com­pany Ax­alta Coat­ing Sys­tems, the global paints and coat­ings man­u­fac­turer, said it planned to in­vest more in China, after the group suc­cess­fully opened a mas­sive tech­nol­ogy cen­ter in Shang­hai ear­lier this month.

Ax­alta chose Shang­hai for its new 15,500-square-me­ter tech­nol­ogy cen­ter, partly be­cause the com­pany’s Asia Pa­cific head­quar­ters is al­ready located there. But also be­cause the lo­cal govern­ment was very sup­port­ive in set­ting up the cen­ter, as the city po­si­tions it­self as an in­no­va­tion hub, said Ax­alta Chair­man and CEO Char­lie Shaver.

“Shang­hai has im­pres­sive plans to set up an in­ter­na­tional sci-tech in­no­va­tion cen­ter,” he said.

The CEO said that his group was very bullish about Shang­hai and com­mit­ted to the city which was at the fore­front of the development and ap­pli­ca­tion of tech­nol­ogy in in­dus­try.

“The ma­jor­ity of our or­ganic growth to­day comes from China,” said Shaver in an 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 its in­dus­trial coat­ing business, but the boom­ing Chi­nese auto mar­ket was but­tress­ing its trans­porta­tion coat­ing and re­fin­ish­ing busi­nesses.

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 net sales of about $1 bil­lion in­ter­na­tion­ally in the first quar­ter of the year, driven by sales vol­umes growth of 8.9 per­cent year-onyear, with its trans­porta­tion coat­ings net sales ris­ing 2.1 per­cent to $421.4 mil­lion in Q1, it said in its quar­terly re­port.

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

With a cur­rent em­ployee base of 300 and ca­pac­ity for 500, the new tech­nol­ogy cen­ter joined Ax­alta’s in­ter­na­tional net­work of four global tech­nol­ogy cen­ters and more than 30 lab­o­ra­to­ries.

In ad­di­tion to lab­o­ra­to­ries, the new cen­ter houses a re­fin­ish­ing train­ing cen­ter 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 re­fin­ish­ing train­ing cen­ter is equipped for such train­ing,” Shaver said.

He said that his group’s Chi­nese team would have the op­por­tu­nity to work with, share ex­per­tise and learn from in­ter­na­tional col­leagues, as part of a sin­gle global R&D or­ga­ni­za­tion.

Shaver said that in prac­tice that meant de­vel­op­ing new coat­ing applications, next gen­er­a­tion paints and cre­at­ing new col­ors.

Ax­alta, an in­dus­try leader in paint 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 run with joint ven­ture part­ners.

The Chi­nese coat­ing in­dus­try is very com­pet­i­tive, with ma­jor in­ter­na­tional and good do­mes­tic coat­ings play­ers in the mar­ket, while con­sumers are de­mand­ing more in­no­va­tion and lo­cal so­lu­tions.”

Char­lie Shaver, Ax­alta Chair­man and CEO

Shaver said his com­pany, given its in­vest­ment and business work with lo­cal part­ners over past decades, saw the mar­ket be­com­ing in­creas­ingly so­phis­ti­cated.

“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 said cus­tomer ex­pec­ta­tions in cities like Shang­hai were dif­fer­ent from those in smaller cities.

Shaver added that his com­pany’s com­bined in­vest­ment in China has topped $100 mil­lion since 2013 and it plans to build a new fac­tory in Nan­jing in east­ern China.

GENG YUHE / FOR CHINA DAILY

Work­ers check the qual­ity of a batch of wind­power blades at a the fac­tory in Lianyun­gang, Jiangsu. Ak­zoNo­bel is us­ing more and more re­new­able en­ergy in pro­duc­tion.

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