Recently, the China Petroleum and Chemical Industry Federation held a press conference on the economic operation situation of China’s petroleum and chemical industry in 2017 in Beijing and released the “Economic Operation Situation of the Petroleum and Chemical Industry in 2016″ and 2017 Forecast Report”, the report pointed out that in 2016, the annual output of industrial enterprises above designated size in the coating industry reached 18.9978 million tons, a year-on-year increase of 7.2%; the main business income reached 435.449 billion yuan, a year-on-year increase of 5.6%. After reading this set of data, the editor is puzzled. Affected by environmental protection inspections in 2016, most companies were closed and their output should have been reduced. Why did the total paint production increase last year year-on-year?
Small and medium-sized enterprises are closing down in batches, while large enterprises are rising
Last year, raw materials surged. For example, titanium dioxide experienced more than ten consecutive increases. Among them, Billions raised the price of titanium dioxide products a total of 13 times, and Annada raised its price. It has been raised 12 times, China National Nuclear Titanium Dioxide has been raised 8 times, and Gimpo Titanium has been raised about 10 times. Environmental protection inspections have also been the most stringent in history. The central environmental protection inspection team has successively stationed in Inner Mongolia, Heilongjiang, Jiangsu, Jiangxi, Hubei, Guangdong, Chongqing, Shaanxi and other provinces and cities to conduct batches of environmental inspections. The inspection team was stationed in various places twice and received nearly 10,000 reports, and filed 4,138 cases for punishment, with a total fine of 260 million yuan. During this environmental storm, nearly a thousand paint companies were shut down due to environmental violations. In addition, the downstream market is sluggish, it is difficult to recover accounts, the bad debt rate is high, and business itself is difficult to do. Often, if one bad debt is found, dozens of businesses will be in vain. This will be a fatal blow to some small and medium-sized enterprises. Some companies went bankrupt due to default on payment and broken capital chain. According to statistics, thousands of paint companies and projects were eliminated and closed last year, including 205 companies and projects in Zhejiang Province, 45 companies and projects in Shanghai, Guangdong and other provinces and cities, and some paint companies in Anhui Province and Guangxi Zhuang Autonomous Region were closed down. 27 enterprises. This does not include businesses that have closed due to poor business. It can be seen from these eliminated and closed enterprises that the vast majority of them are small and medium-sized enterprises.
According to several paint company leaders, profits and turnover overall declined sharply in 2016, with the only increase being corporate debt ratios. Moreover, according to the database, the number and output of small and medium-sized enterprises are indeed decreasing, but the output of most medium and large paint enterprises is increasing, which makes the total output show an upward trend.
There are more new production lines and water-based coatings have become an emerging market
Since 2016, the growth rate of my country’s coatings investment has remained high. Nippon Paint, Oriental Yuhong, AkzoNobel, BASF, PPG, Axalta, Sherwin-Williams, Hainan Domestic and foreign paint companies such as Honglaoren and Valspar have announced the establishment of new production bases or expansion and commissioning. According to incomplete statistics, the total production capacity newly built, planned, under construction, and put into operation nationwide in 2016 exceeded 12 million tons. Among them, water-based coating projects account for a large proportion of investment, and foreign-funded enterprises invest heavily in projects.
At present, the state is vigorously combating environmental pollution, national environmental awareness has increased, and consumer behavior has changed. Energy-saving and environmentally friendly water paints are facing unprecedented development opportunities, and the market is showing a “blowout” “style” demand situation. It is imperative to replace paint with environmentally friendly water paint. Under this trend, companies are optimistic about the development prospects of water-based coatings and have increased investment in water-based coating projects. Judging from the projects invested in 2016, water-based paint projects accounted for the majority of investment. For example, Chenyang Group invested in a new water-based paint industrial park project with an annual output of 1 million tons, and Runnan Paint invested 1 billion yuan in a new water-based paint industrial park project with an annual output of 600,000 tons. For water-based paint projects, Shandong Ganyin invested 320 million yuan to build a new water-based paint project with an annual output of 400,000 tons, and Asia Chuangneng invested 495 million yuan to build a new Chuzhou project with an annual output of 250,000 tons of water-based paint.
Although the downward pressure on China’s economy is increasing, foreign paint companies are rushing in, competing for land, racing at high speeds, and enjoying unlimited glory. Especially in 2016, it was the “year of expansion” for foreign-funded enterprises. For example, Sherwin-Williams of the United States invested in a new high-performance coatings project with an annual output of 79,000 tons and annual sales of 2.35 billion yuan; Valspar Paint (Tianjin) Co., Ltd. with an annual output of 200,000 tons of coatings was completed and put into production, and BASF’s new Shanghai The automotive coating equipment was put into operation, AkzoNobel’s Chengdu decorative paint production base with an annual output of 50 million liters was put into operation, PPG invested in expanding a high-performance coating project with an annual output of 18,000 tons, and Mecca Paint invested 400 million yuan to build a new high-performance coating project with an annual output of 70,000 tons. Hempel invested 667.7 million yuan to expand its coatings project with an annual output of 102,000 tons.projects, especially Nippon Paint. In 2016, there were as many as 8 projects under construction, planned, or put into production. Not only did the investment amount be large, but the scale of new production capacity was ahead of other companies. The projects are distributed in Xianning, Hubei, Zhengzhou, Henan, Yunnan, Chengdu, Sichuan, Chongqing, Suzhou in Jiangsu, Qingyuan in Guangdong, Shanghai, Langfang in Hebei and other places. According to the editor’s incomplete statistics, Nippon Paint’s current new production capacity is as high as nearly 2 million tons, with a designed annual output value of more than 20 billion yuan.
In summary, although the surge in raw materials and the intensity of environmental protection inspections in 2016 led to the collapse of a large number of small and medium-sized enterprises, those with competitiveness, financial and technical support The outcome of medium and large enterprises is completely different from that of small enterprises. Their output is less affected by external factors. On the contrary, in this weak economic environment, relying on their unique management methods, the output is growing steadily, which just makes up for the small and medium-sized enterprises. The output dropped by enterprises has generally maintained the increase in paint output in 2016, and the 28th phenomenon in the paint industry is taking shape.
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