Interpreting the future development direction of the coating industry

Aug 17,2021

In our country, the paint industry has been producing in excessive quantities for years, which not only exacerbates the overconsumption of resources and energy but also leads to a large influx of low-quality paints into the market, directly harming people's health, including ethical and moral health, and damaging the environment. Should we shift the focus of development towards improving paint quality?

   In our country, the paint industry has been producing in large quantities for many years, which not only exacerbates the excessive consumption of resources and energy but also floods the market with a large number of low-quality paints that directly harm people's health, including ethical and moral health, and damage the environment. Should we shift the focus of development towards improving paint quality?

    Government departments should pay attention to supporting and managing the paint industry because paint is related to the protection and beautification of almost all industrial products, as well as to the health of people in their home and work environments.

    Government departments should particularly focus on support policies and management for private paint enterprises that account for 65-85%; establish necessary business registration review mechanisms; standardize a unified paint testing mechanism; formulate necessary paint sales licensing mechanisms; and support preferential loans and tax benefits for green environmental protection paints.

    Let's first get to know this company:

    Asian Paints Limited is India's largest paint company. It ranks among the top ten decorative paint manufacturers globally. It has subsidiaries such as Berger International, SCIB Paints in Egypt, Asian Paints Company, Apco Paints Company, and Taubmans Company. The company operates in 23 countries and regions worldwide and has production plants in over 20 countries including China.

    In spring 2011, the company launched a new paint factory in Rohtak Industrial Park in Haryana with an initial capacity of 15 million liters per year, which can be expanded to an annual production scale of 40 million liters based on market demand. The factory covers an area of 130 acres and mainly produces water-based paints, solvent-based paints, paint emulsions, and resin products.

    With the foundation of the new Rohtak plant, Asian Paints will have six factories in India located in Mumbai, Ankleshwar, Kasna, Patancheru, and Sriperumbudur with a total production capacity reaching 39 million liters.

    II. There are three aspects of APL that are worth referencing:

    1. Implement global strong cooperation

    After nearly three years of discussions and negotiations, in July 2012, a strong partnership was successfully established with PPG where both parties hold a 50% stake to form a joint venture company that primarily serves customers in India's industrial liquid coatings, marine coatings, consumer goods packaging, and transportation coatings industries. PPG and APL also plan to establish a second joint venture called Asian Paints PPG Limited where both parties will also hold a 50% stake. This will mainly serve fields such as industrial protection coatings, industrial powder coatings, industrial container coatings as well as light industrial coatings.

    The PPG Group stated that these two joint ventures will fully utilize PPG Group's global scale and technology along with APL's customer base in India including its influence range distribution channels and local relationships. PPG will manage Asian PPG Industrial Company while APL will manage Asian Paints PPG Limited 'fully leveraging each company's strengths' to jointly seek development in India.

    2. Emphasize green environmental protection

    Sh.AshwinDani Vice President stated during the launch of the new paint factory at Rohtak Industrial Park: We will adopt globally leading coating production technologies and equipment using advanced waste gas wastewater waste treatment technologies. Among them an industrial water treatment system occupies an area of about 43 acres. Even street lighting at the factory uses environmentally friendly solar technology; various designs highlight concepts of environmental protection energy saving Sh.AshwinDani stated: Rohtak will become a completely zero-emission factory.

    3. Safety management model

    To encourage recognition for global companies achieving excellence in safety management British Safety Council BSC held an 'Honor Sword' award ceremony in London UK where four factories under Asian Paints: Ankleshwar plant in Gujarat Maharashtra Mumbai plant Kasna plant in Uttar Pradesh Patancheru plant Andhra Pradesh all received 'Honor Sword' awards simultaneously according to British Safety Council these four factories from Indian Asian Paints not only received five-star highest level scores but were also ranked among the top enterprises out of all forty award-winning companies.

    III. Questions worth pondering

    1. Our country's continuous large-scale production makes it number one globally

    (A set of data):

    - In2009,the total outputofpaint bylarge-scalebusinesses nationwide wasaround7.5544milliontons.

    - In2010,the totaloutputofpaintbylarge-scalebusinessesnationwide reachedapproximately9.666milliontons,increasingby2.1milliontonscomparedto2009's7.5544milliontons.

    In11months,theoutputwas8.7119milliontonswithanaverage monthlyoutputnearly80thousandtons;inDecemberit surgedto94thousandtons.

    - In2011,thetotaloutputofpaintbylarge-scalebusinessesnationwide reachedapproximately10.795milliontons,increasingby1.13milliontonsover2010's9..6666milliontons.

    InDecember2011,a surgeinproductionreached104..75thousandtonseachmonth.

    Overtheseelevenyears,totalpaintproductioninChinagrewfrom181thousandtonsin2001to10..795milliontonsin2011withanaverageannualgrowthrateof81..7thousandtons.

    Theabove statisticsrefersto'scale enterprises'andaccordingtoourcountry'spaintenterprise structure distribution,reallythetotalnationalpaintproductionincludingthemajorityofsmallandmedium-sizedprivateenterprisesisconservativelyestimatedat100thousand tonsannually.

    Inourcountry,paintexportingprovincesaremainlyGuangdongShanghaiJiangsuandShandong.In20111079thousandtonstotalGuangdongprovinceaccountedfor22..79%,Shanghai13..57%,Jiangsu10..26%andShandong9..01%.

    Ourcountry'spaintproductionhascontinuouslysetnewrecords,makingittheworld'slargestproducerofpaints.

    2.'54%'and'the distance from champion'

    Paint quality: An insurmountable hurdle.http://blog.sina.com.cn/u/1097436972

    ①.Paint enterprise quality

    According to the distribution of paint companies in our country: in the underdeveloped western regions such as Chongqing, Sichuan, Yunnan, Shaanxi, Gansu, Guizhou, Ningxia, Xinjiang, and Guangxi, state-owned enterprises account for 5%, real joint ventures account for 10%, and the remaining 85% are almost all private enterprises. In the developed eastern and southern regions such as Guangdong, Shanghai, Jiangsu, and Shandong, the proportion of joint ventures is larger, with private enterprises estimated to be around 65%. Most of these 65-85% private enterprises are run by their owners. The quality of these companies is generally not up to par. Of course, we are not blaming private enterprise owners; they struggle to survive because they are the poor children driving China's economy. They need funding but banks fear they won't be able to repay; they need technology but can't afford real talent. Therefore, some jokingly describe these types of enterprises as 'three-in-one' companies: one high-speed mixer, one sand mill, and one talent. With fluctuations in national monetary policy, there was a year when several local branches came to sign cooperation agreements with the Chongqing Paint Association. However, when these private enterprises really needed loans, they changed their stance again according to circumstances.

    Recently, the Ministry of Industry and Information Technology has introduced measures for local governments to promote corporate mergers and reorganizations. This should be a good approach but is expected to be quite challenging. This is because we are referring to the 65-85% of private enterprises; problems arising in these companies and their negative impact on the industry market are evident.

    Another important indicator of paint company quality is safety production management.

    As we all know, paint companies inevitably deal with some flammable, explosive, and toxic hazardous chemicals. Once an incident occurs, it can lead to minor damage like burning down a workshop or major disasters that leave an entire factory in ashes while causing significant environmental destruction. As a leading paint company in the western region—Chongqing Yusanxia—has taken extensive precautions for safety production; for instance, they have specifically developed high-temperature coatings for their oil tank areas which have shown remarkable results; another private enterprise—Chongqing Southern Paint—has its owner personally invite experts for military-style safety training for all employees... etc. Asian Paints has achieved safety management that earned them a five-star 'Honor Sword' from notoriously picky British inspectors; one cannot help but admire how well-managed this company is.

    ② Quality of paint products

    All member units of the Chongqing Paint Coating Industry Association know that any enterprise wishing to join must have passed ISO9001 quality management system certification and obtained certification as a paint company. I have experienced military-grade quality system certification before; it indeed builds a strong dam against military quality with meticulous establishment and implementation of three-tier documents. But now we face private paint companies whose numerous soft and hard conditions regarding 'people', 'finance', and 'materials' are difficult to align with ISO9001 standards; however current market order requires compliance—what should we do? The association advocates: write what you can execute and compile what you can achieve into three-tier documents as requirements. Through years of re-evaluation gradually increasing requirements implements a benchmark-based quality route.

    For certain 'scale enterprises' under our current classification system in China whose ISO9001 quality management systems may seem flawless at three levels of documentation—can we dare strictly trace back execution during process control? Are inspections thorough? A friend mentioned that during China's 'Shenzhou V' space mission's quality control even a small screw had eight people handling it through inspection. I hope our paint companies can tolerate having another batch like those picky British inspectors; perhaps then you will truly deserve that champion's throne.

    ③ Green environmental protection issues

    Completely green environmentally friendly coatings are the ultimate goal pursued by the coating industry. This means that from raw materials through production processes to application on end-user surfaces there should be no harmful emissions or spills; no heavy metals or radiation hazards whatsoever. Achieving this level may still require a long revolutionary process. Currently at a technological level achieving what Asian Paints Sh.AshwinDani stated about building a completely zero-emission factory would be commendable—I would love to hear our leading companies declare 'I can do it!'

    IV. Conclusion

    1. China has been producing an enormous volume of coatings year after year—the largest globally. While celebrating this achievement should we shift our focus towards improving coating quality?

    For eleven years now if we continue mass production without regard for quality it will not only exacerbate excessive consumption of resources and energy but also flood the market with low-quality paints directly harming people's health including ethical health while damaging the environment.

    2. Government departments should pay attention to supporting and managing the coating industry because coatings relate closely to protective measures and beautification associated with nearly all industrial products impacting public health in home environments and workplaces;

    Government departments should particularly focus on support policies and management for private paint enterprises that account for 65-85%; establish necessary business registration review mechanisms; standardize a unified paint testing mechanism; formulate necessary paint sales licensing mechanisms; and support preferential loans and tax benefits for green environmental protection paints.

    3. Whether Chinese coating companies can stand tall in Asia or break out globally depends not only on their efforts but also requires government departments providing unobstructed pathways through global talent acquisition and strong international collaborations—it is only then that our dream of becoming a powerful nation in coatings may come true.

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