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Chinese Wood Coatings Markets
Frost & Sullivan, Sep 2006
Along with the trend of metropolis, urban area is expanding rapidly. Many boomtowns are emerging and under construction. This is expected to boost the demand of furniture decoration enormously. Wood furniture accounts for the majority of all furniture sold either in domestic market or in export products. The domestic demand for and the export of wood furniture is increasing dramatically, which drives the growth of Chinese wood coatings market significantly. This research service studies several key aspects, which are vitally essential to the current and future perspectives of the Chinese wood coatings market.
The Frost & Sullivan research service entitled Chinese Wood Coatings Market provides a comprehensive analysis of the Chinese wood coatings market. It also provides a brief overview of the Chinese furniture industry. In this research service, Frost & Sullivan's expert analysts thoroughly examine the following markets/applications/technologies: PU coatings, NC coatings, PE coatings, and others (UV/water-based coatings, AC coatings).
Market Sectors
Expert Frost & Sullivan analysts thoroughly examine the following market sectors in this research:
By Product Type:
- Polyurethane coatings (PU)
- Nitrocellulose coatings (NC)
- Polyester coatings (PE)
- Acid cured coatings (AC)
- Others(UV/water-based coatings)
Technologies
The following technologies are covered in this research:
- Polyurethane coatings (PU): These coatings are cured through a poly addition reaction, and is dominant in current Chinese wood coatings markets.
- Nitrocellulose coatings (NC): These coatings are based on Nitrocellulose and its
- derivatives.Due to its good finishing effect in antique furniture, it is dominant in the export of wood coatings, especially the U.S. Additionally, it is widely used in some regional furniture markets, such as in Guangdong province.
- Polyester coatings (PE): These are based on Polyester resins.
- Acid cured coatings (AC): These coatings are cured through a poly condensation reaction eliminating water and formaldehyde (not environment friendly). Its application is currently very limited, which is forecast to be phased out sooner or later.
- Others (UV/water based): This segment primarily consists of UV cured and waterborne coatings, which are niche segments in the market with huge potential in the foreseeable future.
Market Overview
Development of the Real Estate Industry Aiding Market Growth
Driven by its booming economy, China has been witnessing the rapid urbanization and expansion of its cities and towns. Off late, there has been noticeable increase in commercial, residential, and entertainment-related constructions, and this ongoing growth in the domestic real estate industry is expected to significantly aid the growth of the Chinese wood coatings market. Moreover, market growth is likely to be further enhanced by the rise in domestic consumption as well as exports of wooden furniture. The Chinese furniture association estimated furniture exports at $13.0 billion for 2005, with a year-on-year growth rate of 37.0 percent, and a closer examination of Chinese furniture exports reveals wood furniture to be dominant. As a result, wood coatings, especially nitro cellulose (NC) coatings, are forecast to see strong uptake among the furniture end-user sector.
However, increasing raw material costs are likely to be a key challenge for Chinese coating manufacturers. Considering the competitive nature of the market, wood coating manufacturers are often forced to absorb the increasing raw material cost instead of passing them on to their clients. While this has a severe impact on industry profit margins, the imposition of rigorous new regulations, especially in relation to environment protection is also a major challenge. Chinese coatings manufacturers have been imposed with stringent regulations such as the ISO 9001 international quality system certification, ISO 14001 international environment management certification, China Compulsory Certification (CCC), and China Environmental Labeling Certification, explains the analyst of this research service. Enterprises which do not fulfill these criteria are bound to be phased out and many small- and mid-sized participants are particularly facing difficulties to ensure compliance with these regulations.
Polyurethane Coatings Remain Dominant
Among the coating technologies, polyurethane (PU) coatings were dominant in the Chinese wood coatings markets, and it is expected to maintain and even increase its market share during the forecast period. NC coatings, on the other hand, were the second largest segment in 2005, and find predominant use in wood furniture exported to the United States due to their ease of use. Acid cure (AC) coatings are seeing a decline in usage due their high formaldehyde content, and they, along with polyester (PE), are likely loose out market share over the forecast period.
Owing to technical barriers, water-based coatings are still in the nascent stage of development, but hold great promise for the future.
Overall, the Chinese wood coatings market is likely to grow consistently over the forecast period. The market is expected to grow in line with the Chinese furniture industry, and will be driven primarily by the growth in domestic consumption and export of wooden furniture. Companies that supply branded products with good quality, set up a complete distribution channel with wide geographic coverage, and possess effective marketing strategies, are expected to see better growth, says the analyst. Building reciprocal sales alliances with furniture clients is also likely to be very beneficial for market participants wishing to strengthen their presence in the Chinese wood coatings markets.
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