china waterborne wood coating market

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  • 1

    Market Assessment of Waterborne

    Wood Coating for WBCP

    November, 2015

    Presented by Ariel Jiang

    & Conor Eliot

  • 2

    Table of Contents

    I. Project Introduction

    II. Market Analysis of Wooden Furniture

    III. Market Analysis of Wood Coating

    IV. Market Analysis of Waterborne Wood Coating

  • 3

    Project Introduction Project Introduction

    This China Waterborne Wood Coating Market Report (report) is published by Waterborne

    China Platform (WBCP) and analyzed by GCiS, a third party research organization . The copyright

    in this report belongs to WBCP.

    WBCP: established in July 2009, is a non-profit organization initiated by coating raw material

    suppliers, paint manufacturers, equipment suppliers, and CNOOC Changzhou Paint & Coating

    Industry Research Institute. Serving as a country-wide forum and reliable source of industry

    information, WBCP is committed to accelerate the transition from solvent borne to waterborne

    products in the coatings, graphic arts market by industry-wide efforts.

    GCiS China Strategic Research: established in 1997, is an international market research

    organization. Serving for international and domestic notable companies on B2B market research

    and strategic consultancy, which focuses on: Chemicals, Construction, Medical, Energy, etc.

    Headquartered in Beijing, with offices in Shanghai & Wuhan, services mainly covering:

    Comprehensive Market Assessments, Channel Assessment, Competitor Research, Voice of

    Customer, M&A, etc.

  • 4

    Project Requirements & Research

    Methodology

    Findings in this report source from:

    - Background Research is based on secondary research and expert interviews.

    - Primary Data is obtained from a large number of telephone interviews.

    - Quantitative Data is used for analyzing and calculating market figures, which have been cross-checked with the

    figures obtained from every market participant.

    - Qualitative Data is used for analyzing industrial trends and market determinants, info obtained from interviewees

    opinions and secondary research.

    Project Introduction

    This project mainly studies wood coating, waterborne wood coating and wood furniture,

    Wooden Furniture: Analyze the market size (2012-2014) of wooden furniture, and predict the market size for

    2015-2019. Wooden furniture includes American Style, Antique (Non-Western), Cabinets, Childrens, Hotel,

    Contracted, Office, Outdoor (including Outdoor Wood House), and Wood Doors.

    Wood Coating: Analyze the wood coating market size (2012-2014), and predict the market size for 2015-2019.

    Wood coating categories includes Waterborne, Ultra Violet based, Polyurethane, Nitro, Acid Curing, Unsaturated

    Polyester, and other.

    Waterborne Wood Coating: Analyze waterborne wood coating market size (2012-2014), and predict the market

    size for 2015-2019. Waterborne wood coating categories includes Waterborne Polyurethane, Waterborne Acrylic,

    Waterborne Polyurethane Acrylate, Waterborne 2k-Polyurethane, Waterborne Ultra Violet based, and others.

    Base year: 2014.

  • 5

    Table of Contents

    I. Project Introduction

    II. Market Analysis of Wooden Furniture

    III. Market Analysis of Wood Coating

    IV. Market Analysis of Waterborne Wood Coating

  • 6

    The value of wooden furniture produced in 2014 is about RMB 570 Bn. Minimalist

    has the highest production value among all wooden furniture types: 38%.

    Following by wood doors which accounts for 17.2% and American Style which

    account for 16.9% .

    Market Size (2014)

    Source: GCiS, China Furniture Association, China Furniture Annual

    Type

    Production

    Value

    Production

    Output

    (Bn RMB) ( Mn pieces)

    Minimalist 218 182.4

    *Wood Doors 98 47.1

    American Style 96 38.2

    Antique (Non-Western) 57 10.0

    Cabinets 28 11.2

    Childrens 22 12.4

    Office 20 6.3

    Hotel 13 2.8

    Outdoor (exc. Outdoor

    Wood House)0.3 0.2

    Sub-total 552.3 310.6

    **Outdoor Wood House 16.4 3.7

    Total 568.7 -

    Wooden Furniture Production Value and

    Production Output by Furniture type (2014)

    Wooden Furniture Production Value (%) (2014)

    Wooden Furniture

    Note: *Wood Doors: Units given in sets.

    **Outdoor Wood House: Units given in m.

    38.3%

    17.2%

    16.9%

    10.0%

    4.9%3.9% 3.5%

    2.9%2.3%

    0.1%

    Production Value

    Minimalist Wood DoorsAmerican StyleAntique (Non-Western)CabinetsChildrensOfficeOutdoor Wood HouseHotelOutdoor

  • 7

    The wooden furniture industry has been greatly affected by the upstream raw material

    market, downstream market demand, consumers preferences and regulatory force.

    Market Drivers and Challenges

    Source: GCiS

    Increased Urbanization:

    Increased urbanization and citizens disposable income has

    boosted demand for wooden furniture in 3rd and 4th tier

    cities.

    Rise of Custom Furniture:

    Custom furniture can more effectively use up spaces than

    finished furniture, make it a rational choice in terms of

    space saving. It can also better meet individualized needs

    of consumers, while increasingly sophisticated technology

    and a transparent pricing system has helped drive growth

    of the custom furniture market in recent years.

    Growth of Furniture exports to emerging markets:

    Under the China-ASEAN certificate of origin and related

    policy implications, China's exports to the Middle East,

    ASEAN, wooden furniture and other countries in Latin

    America have had double-digit growth.

    Changes in Consumer Preference:

    More consumers now prefer wooden furnitures texture

    than other types of furniture, so there is higher demand for

    wooden furniture in both the 2nd hand and first time buyers

    market.

    Rise of Raw Material and Labor Costs:

    The Chinese governments ban on logging in Northeastern forests

    and western countries restriction on wood imports has increased the

    price of wood and decreased Chinese wood exports. Rising labor

    costs in China have cause a number of wood furniture manufacturers

    to shift operations to Vietnam and other Southeast Asian countries.

    Real Estate Market Slow Down:

    The real estate market is growing slower due to the governments

    macroscopic readjustment. As a result, furniture, as a related

    purchase of housing, also grows slower with the real estate market.

    VOC Sewage Charge: Regional VOC Sewage Charges will soon

    be implemented, which will affect the production cost of wooden

    furniture because it is levied on furniture suppliers that coat products.

    Consumption Tax:

    The government is going to levy consumption tax on non-eco friendly

    wood coating products, which will increase their price. As an

    upstream market for wooden furniture, the wood coating consumption

    tax increase on October, 2015, will indirectly affect the development

    of the wooden furniture market.

    Slowdown in key export markets :

    Export markets, such as the US and EU as well as other major

    regions have introduced restrictions and regulations targeting

    Chinese wooden furniture companies. Competitiveness have also by

    influenced by inflation of the Chinese Yuan.

    Wooden Furniture

    Market Drivers Market Challenges

  • 8

    Based on GCiS predictions, wooden furniture will have a production value of RMB

    640-730 Bn by 2019 with a five year CAGR of 2.3% in a conservative estimate and 5.1%

    in an optimistic scenario.

    Forecasts

    Production Value

    (RMB Bn)2012 2013 2014 2015-E 2016-E 2017-E 2018-E 2019-E 2014-2019 CAGR

    Conservative464 521 570

    581 596 612 623 638 2.3%

    Optimistic 596 629 664 695 732 5.1%

    Wooden Furniture 2012-2019 Production Value and CAGR

    Source: GCiS, 2014 China Furniture Annual, China Furniture Association

    Wooden Furniture

    Wooden Furniture2012-2019 Production Value by Type

    2012 2013 2014 2015 E 2016 E 2017 E 2018 E 2019 E 0

    100

    200

    300

    400

    500

    600

    700

    Pro

    du

    cti

    on

    Valu

    e (

    Bn

    RM

    B)

    7.5%

    8.0%

    8.5%

    9.0%

    9.5%

    10.0%

    10.5%

    11.0%

    11.5%

    12.0%

    170198

    218 224 229 235240 246

    94

    9498 101

    105 109112 11677

    90

    96102

    104105 106

    107

    45

    52

    5759

    6061

    6364

    22

    25

    2829

    2930

    3131

    17

    20

    2222

    2223

    2324

    16

    19

    2021

    2122

    2223

    14

    15

    1617

    1717

    1818

    10

    7

    136

    810

    78

    0.2

    0.3

    0.30.3

    0.30.3

    0.30.3

    OutdoorHotelOutdoor Wood HouseOffice

    ChildrensCabinetsAntique (Non-Western)American Style

    Wood DoorsMinimalist

    Conservative

    2012 2013 2014 2015 E 2016 E 2017 E 2018 E 2019 E 0

    100

    200

    300

    400

    500

    600

    700

    Pro

    du

    cti

    on

    Valu

    e (

    Bn

    RM

    B)

    7.5%

    8.0%

    8.5%

    9.0%

    9.5%

    10.0%

    10.5%

    11.0%

    11.5%

    12.0%

    170198

    218 231244 258

    273 288

    94

    9498

    104110

    117124

    132

    77

    90

    96100

    102103

    105106

    45

    52

    57

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