Expert dialysis: paint industry profits are lower than the warning line

Business News Agency, August 22th At present, the profits of many paint companies in China are generally low, exceeding the industry's normal profit warning line (due to the characteristics of the paint industry and other reasons, the normal industry profits of paint manufacturers should be 20-30%, at least To be higher than 10%), the main reason is the brutal market competition in recent years, which directly led to the departure of the market price of paint from the actual price.

The market demand increases rapidly every year in 2010. The proportion of architectural coatings production has reached 36.4%. However, there is still a big difference between developed countries such as Europe, the United States and Japan. The proportion of architectural paints in Europe and the United States in the paint industry is more than 50%. Japan is slightly lower, and it is also maintained at about 40%.

According to the data, in 2004, the annual demand for architectural coatings in China was only 2 million to 3 million tons, making it the largest paint and coating market in Asia. At present, market demand is increasing at a rate of 25% per year. So far, the output of architectural coatings in 2011 was 4.14 million tons, and the output of architectural coatings in 2012 was 4.87 million tons, up by 17.7% and 17.6% respectively from the previous year. As an architectural paint company, it is necessary to change market strategies at an appropriate time and actively respond to the state's affordable housing strategy. This is the only way to realize corporate social responsibility while maintaining the competitiveness of the company.

As far as the overall scale is concerned, China’s coating production ranks third in the world, second only to the United States and Japan, but its per capita annual consumption is much lower than that of industrialized countries. Among them, the average annual consumption of 22 kilograms of Americans, the world average of 4 kilograms, while our country only 2 kilograms. In addition, in Europe and the United States and other developed countries, the use of advanced paint decoration of the building's exterior wall has accounted for 90%. At present, the application rate of China's architectural coatings in exterior wall decoration is less than 10%, and the market development space is very large.

Although China has become a paint model abroad, the demand for domestic paint market has increased year by year, but in recent years, the performance of domestic paint companies in the market can be described as a “low point in the trough,” and listed companies in the securities market have reported losses. In the contest between "invasion" of foreign capital and "loss" of domestic capital, the pattern of China's paint industry may undergo dramatic changes. Foreign-funded enterprises that have absolute advantages in capital, technology, product quality, etc. will seize high-end markets in the large- and medium-sized cities, while small-scale, low-intensity domestic-funded small and medium-sized enterprises can only occupy the vast rural market segments.

China has now become a model for foreign paints. It is understood that world-renowned coating companies such as Sherwin-Williams, Nippon Coatings, and ICI have all set up general agents or built production plants in China. The international coating companies’ market share in China has reached about 45%, almost monopolizing medium and high-end products. market. A Chinese and foreign paint fight is inevitable.

Brand strategy exists short-sighted behavior Industry insiders believe that a rational brand management strategy should become the domestic paint companies in the market to break through the preferred method of thinking. Due to the small scale, Chinese paint companies are unable to carry out large-scale advertising campaigns, and it is difficult to increase brand awareness. The short-term business concept of some of its agents is also damaging to the company.

In addition, the lack of high-quality products and the oversupply of low-quality products are extremely unfavorable to private enterprises. At present, in the total supply of paint, domestic high-grade paints only account for a small proportion, and most of them rely on imports. With the further evolution of the market structure, the status of foreign-funded enterprises to control the high-end market will be more stable, and some private-owned paint companies may become processing factories for foreign brands.

Of course, domestic paints are not lacking in quality. Some products are comparable to foreign brands in terms of quality. The difference lies in the brand value.

At present, paint companies generally have short-sighted behavior in brand strategy. The product's strategy is limited to product sales. For example, a production plant often registers several companies at the same time, and the same company has several or even more than a dozen trademarks at the same time. For enterprises, this approach is intended to fully develop the market, have more agents, and at the same time not to create conflicts of interest between agents and between agents and enterprises. Then, this situation also led to only a handful of brands in the paint industry, and the domestic high-quality paint market has almost no domestic paint seats.