china waterborne wood coating market

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Market Assessment of Waterborne

Wood Coating for WBCP

November, 2015

Presented by Ariel Jiang

& Conor Eliot

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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

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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.

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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.

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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

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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

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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

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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