Analyze the impact of the withdrawal of DuPont from the paint industry

On July 23, 2013, DuPont, the largest supplier of chemical products in the United States, announced that it is planning to withdraw its once lucrative coatings business to focus on the rapidly growing agricultural sector and hopes to better position itself against market fluctuations.

DuPont's "Butterfly Wings" fanning across the ocean has also attracted some attention in China. For the international chemical giant's clear statement that it will abandon the coating business, what will the people in China's paint industry think? What kind of follow-up impact will “DuPont Discard Paint” bring to the paint industry in China and the world?

For China: Challenges and Opportunities Does DuPont want to abandon its coating business will have some negative impact on China's paint industry? In response to this problem, Ben Wang reporters interviewed a number of people in the industry. Taken together, the answers obtained can be expressed as: There are negative effects, but more are positive effects.

Xue Hui, general manager of the civilian paint division of Tikkurila (China) Coating Co., Ltd., expressed this view: "Du Pont wants to abandon the coating business for the Chinese paint industry should have a certain negative impact, but the impact should be small." He pointed out that the Chinese market began to heat up in 2013, and many paint companies’ sales volume climbed in the first half of 2013. Under the circumstances of a market bull market, DuPont’s negative impact should not be significant. But he also expressed vigilance at the same time. He said: “In the long run, this is a warning and a warning bell. Such a big giant company gave up the paint industry and proved that the paint industry does have a crisis of development.”

The possible negative impact is more on raw material costs. Xiao Yang, Chairman of Zhuhai Feiyang New Material Co., Ltd., analyzed: Due to the large market share of titanium dioxide produced by DuPont, once DuPont abandons the coating business, the price of titanium dioxide will rise, causing the cost of coatings to increase. The price increase of paint is far less than the price increase of titanium dioxide. The negative effect is that the profit of paint will be lower.

Hua Dian Coatings Henan Marketing Center Ding Li and General Manager Liang Tian of Dongguan City Tomorrow Nano Technology Co., Ltd. expressed the same view. Liang Xiao pointed out that DuPont has made outstanding contributions to the development of China's paint industry, and if it withdraws from the Chinese market, it will have some impact on China, “such as the rising production costs of paint companies and the decline in paint quality.”

However, instead of staring at the crisis signals that DuPont might abandon its paint business, painters seem to prefer to see hidden development opportunities behind them. Liang Biao added after the above statement: "But these effects are only short-term, and soon domestic companies will fill this vacancy. This is still a rare opportunity for paint raw material manufacturers." Zhaoqing Qianjiang Advanced Materials Technology Wang Chun, general manager of the company also believes that "(DuPont abandoned paint) especially for our paint industry, but there will be favorable aspects, our domestic paint companies should seize this opportunity to develop and grow as soon as possible in order to participate in international competition."

Guilin, the chief operating officer of Guangdong Huazib Chemical Industry Co., Ltd., has seen the problem more thoroughly: “DuPont's desire to abandon the coating business cannot be simply because the paint industry is not good, but because DuPont has chosen a better industry.” Therefore, She believes that China is still at an intermediate stage of industrialization. There is still considerable space for development in each industry. The Chinese coating market also has its own characteristics. This is beneficial to local companies who are familiar with the Chinese market. of. “Chinese paint companies should keep up with the needs of the market and adjust their own pace of development in a timely manner, not to be chaos by the outside world.”

Of course, once the raw material costs continue to increase, it may have a positive impact on the transformation of the paint industry. “Some small paint manufacturers are even less able to survive. This creates a certain sense of crisis for them. Some large paint companies will be more competitive and give them better opportunities,” said Ding Li. . The Anqing Linghu Coatings Co., Ltd. Board of Supervisors, Wang Yiming, director of the General Economic and Trade Office also believes that this will lead to market restructuring, some small and micro-enterprises may be closed down and accelerate the pace of further regulation of the paint market.

The statement of Yang Haibo, director of the Jiunuozhen Stone Paint Marketing Department, is similar to the “summary speech,” he pointed out that if the Chinese paint industry needs DuPont, then the withdrawal of DuPont will have a negative impact on the industry; “The real truth is that it is not DuPont abandoned paint. Industry, but the paint industry has abandoned DuPont. Therefore, DuPont's abandonment (coating business) will not have a negative impact on Chinese coatings." "Today's Chinese paint market does not require the second DuPont. It only needs to do better than DuPont. The brand, Dupont's exit, is a very big encouragement for those brands that are currently outstanding in the market. In this sense, the impact of DuPont is positive for the lack of innovative Chinese coatings industry."

“DuPont Phenomenon”: Cases or Trends DuPont's renunciation of paint business due to shrinking profits will not become a target for other chemical giants to imitate, causing a global crisis in the coatings industry. This issue has yet to be verified. However, for the Chinese paint industry, they generally gave a negative answer.

Xue Hui made it clear that the global crisis should be very small. “Because European paint is a monopolized industry, small paint brands have been acquired by big brands. The existing brands are big companies. The prices of products are less competitive and people are not sensitive to the price of products. More concerned with the quality of products, environmental performance, etc. So for European companies, the crisis should be far from coming."

Wang Chun also holds a negative opinion. He believes that the paint industry is a traditional industry. As a surface treatment product, it will always exist and be applied in all aspects. "The global economic aggregate will continue to rise, and all developments will show an upward trend. The paint industry will develop towards mergers and acquisitions, enlargement and strength, and will develop in the direction of high value-added, high-tech and long-lasting." Shaw Yang also pointed out that "because the global market demand has always existed, it has pushed the paint industry into a new era."

Wang Yiming pointed out the essence of DuPont's abandoning paint business: “DuPont’s practice is only the big company's stripping and reorganization of its bad business segment, and it will not cause a crisis in the paint industry.” Liang Wei also believes that the paint industry will last forever. . "A company does not do, there will be other companies to fill the market vacancies. This is the law of the market."

Guilin chose a somewhat conservative statement. He believes that DuPont's abandonment of the coatings business may have caused some industry shocks at the beginning, but DuPont's coating business, in general, accounts for a relatively small proportion of the world's overall huge chemical industry. As long as mankind's industrialization continues and survival and development continue, the chemical industry will only continue to advance and will not retrogress. “And I think that as a paint company, its real strength is not reflected in the market boom, but even if it suffers a market downturn, it will be able to stand on its own feet and seek breakthroughs.”

Ding Li thinks that DuPont’s influence of abandoning the coating business may spread: “After all, DuPont’s influence is too great.” But she also pointed out that paint companies are in crisis, but there are also new possibilities. “That is not to rely too much on peacetime.” There will be new opportunities for companies like DuPont (like this) or companies with new technologies."

Yang Haibo is still the most cold-hearted one. He believes that if most companies in the global chemical industry share the same business concepts, business practices, and operating conditions with DuPont, there will be a certain degree of spread. But this is obviously not realistic.

"In other words, is there only one DuPont in the global chemical industry, or is there a lot of 'DuPonts'? DuPont's problems will only spread to 'DuPonts'. If one or two large chemical companies worldwide withdraw from the paint market, the global paint market will result. With cringe and weak market demand, there will be a crisis. But the possibility of this happening does not exist."

Commenting on the viewpoint of the painter community, we can easily see that for the future development of the paint industry, opportunities and challenges are the norm. Maybe there are different opinions on certain issues, but hope that the tone of the industry will not change. Perhaps any slight change in the paint industry may be the butterfly's wings, but its influence cannot be the same every time. Or the fermentation process of this kind of effect is only short-lived, only need to face rationally; or it is a long-term slow process, there is enough time to deal with. However, ignoring it will certainly be an undesirable attitude. Because in the fierce market competition, any negligence may lead to its own survival disaster.