Industry News

Superior Performance at Affordable Price Key to Driving Demand in the Asian Powder Coatings Markets

Published on 2006-12-07. Author : SpecialChem

PALO ALTO, Calif. -- The Asian powder coatings markets are poised to expand given the favorable economic conditions as well as a growing end-user market. Environmental costs and competitive pricing notwithstanding powder coatings is expected to make significant inroads in the region's coatings market. Striking a balance between quality and affordability is imperative for success and coatings manufacturers have to take the initiative and educate their customers on the benefits of powder coatings systems.

"The most important factor driving the growth of the Asian Powder Coatings Markets is the rapid growth in the end-user industries such as automotive, metal furniture and consumer appliances," notes Frost & Sullivan Research Analyst D Ashwin Kumar. "Buoyant economic conditions and rising disposable income levels in Asia has triggered growth in manufacturing industries thus triggering a demand for powder coatings."

The entry of Western manufacturers into Asia has bolstered the growth of environmental friendly coatings such as powder coatings and radiation cured coatings. As regulations become stricter in Asia, powder coatings will emerge as the preferred coating system. More importantly, powder coatings have better durability, and superior performance properties. Developments in the powder coatings market have helped the manufacturers in overcoming, to an extent, challenges associated with coating complex three-dimensional objects.

However, growth in these markets will not be easy to achieve without resolving certain major challenges faced by the industry. Initial capital investment in powder coatings technology is very high when compared to the traditional solvent-based coatings system. Since the regulatory standards in Asia are lax, the coatings manufacturers and their customers continue to use the conventional systems, as shift to powder coatings technology would require considerable amount of investment. Rising raw material costs have led to a decline in R&D investments as coatings manufacturers face a margin crunch.

"Convincing customers and educating them on the benefits of using powder coatings would be the biggest challenge for the powder coatings manufacturers in the next few years," explains Kumar. "Even so, powder coatings is expected to make headway in areas such as the construction industry despite the higher price to affordability ratio."

Competitive pricing is one strategy that is common to all local coatings manufacturers in Asia; hence, powder coatings manufacturers have to alert their customers on the benefits of using powder coatings in order to sustain profitability amidst rising raw material costs. Product differentiation in the powder coatings market is a key success factor as there are numerous local companies supplying generic coating products.

"Powder coatings manufacturers have to consistently invest in R&D so as to develop coatings that have superior performance properties and come at an affordable price," observes Kumar. "This will ensure product differentiation in an intensely competitive and fragmented market."

Asian Powder Coatings Markets is part of the Chemicals and Materials Subscription, which also includes research in the following markets: European Radiation Cured Coatings Market, Chinese Wood Coatings Market, Chinese Paint Additives Markets. All research included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews are available to the press.

Frost & Sullivan, a global growth consulting company, has been partnering with clients to support the development of innovative strategies for more than 40 years. The company's industry expertise integrates growth consulting, growth partnership services, and corporate management training to identify and develop opportunities. Frost & Sullivan serves an extensive clientele that includes Global 1000 companies, emerging companies, and the investment community by providing comprehensive industry coverage that reflects a unique global perspective and combines ongoing analysis of markets, technologies, econometrics, and demographics.

Source: Frost & Sullivan

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