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Chinese Economic Boom Accompanied by Switch to Safer Biocides for Industrial Preservation

Published on 2005-05-13. Author : SpecialChem

LITTLE FALLS, N.J. -- In the midst of China's current economic expansion, the market for specialty biocide chemicals has been growing at an impressive rate. As new construction and industrial production rates continue to soar, suppliers of biocidal actives and formulated products used to prevent the growth of microorganisms are finding a wealth of opportunities.

They're also finding something a bit unexpected. Despite the absence of any government or industry organization to regulate the use of biocides in China, older products are being pushed aside in favor of safer, more environmentally friendly, and sometimes more expensive newer ones.

This movement is being driven by requirements from end users, including paints and coatings suppliers and metalworking fluid manufacturers that blend their products in China. Industrial preservation uses in particular are accelerating the replacement of formaldehyde and organometallic compounds with alternative preservatives like isothiazolinones. And in the marine antifoulant sector, the International Maritime Organization's ban on TBTO has led to increased consumption of cuprous oxide in China, which is one of the world's leading shipbuilding countries.

In fact, a recently published market study by Kline & Company, SPECIALTY BIOCIDES 2004-2005, Volume I: China, estimates that the use of organometallic biocides in China will decline by more than 20% annually over the next five years. At the same time, the study predicts that sales of compounds like cuprous oxide, BIT, CIT/MIT, inorganic silver, and triazones will continue to increase by at least 6% to 8% per year.

"The shift from older biocides in China is happening much quicker than it did in the U.S. or Europe, where suppliers are required to adhere to many more environmental regulations," says Gillian Morris, industry manager for the Chemicals and Materials Practice in Kline's research division. "Part of this comes from requirements for products to be exported out of China, but the local end users in some applications are also pushing the use of newer biocides."

Although the Chinese market for specialty biocides is starting from a much smaller base, it is growing at least twice as fast as the mature markets of the United States and Western Europe, according to Kline's study. This presents a dynamic source of growth for suppliers of biocidal actives and formulated products alike.

In the U.S. industrial preservation market, biocide marketers have traditionally offered straight biocidal actives, whereas in Europe, marketers typically offer both straight and formulated biocides. Currently, the Chinese market is like a hybrid of the two, providing opportunities for multinational companies like Progiven and Schulke & Mayr, which sell only formulated products, and Thor and Troy, which sell both formulated and 100% active biocides.

"It's uncertain if the Chinese market will tilt more toward formulated biocides or 100% actives, but the multinationals are competing well against the local suppliers in the more value-added product segments like inorganics and organosulfurs. These are the segments that are growing the fastest and are in the highest demand among the more progressive end uses," says Eric Vogelsberg, senior vice president and head of Kline's Chemicals and Materials consulting practice.

The first volume of Kline's global series, SPECIALTY BIOCIDES 2004-2005, focuses on the market for biocides in China and provides consumption estimates for leading product types by volume and value, as well as a five-year outlook. End uses in the industrial preservation and water treatment application sectors are examined in detail, and leading local and multinational biocides suppliers are also profiled.

Established in 1959, Kline & Company is a management consulting and market research firm serving clients worldwide in the chemicals and materials, consumer products, life sciences, and energy sectors.

Source: Kline & Company


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