On
December 11, 2017, Zhanchen Group signed an agreement with Puyang Industrial
Park in Henan Province, China. According to market intelligence firm CCM, the
company plans to have an investment of almost USD160 million. The sum will be
used to build a 300,000 t/a solvent, water-borne coating production base in the
aforementioned region, aiming to increase the overall annual coating market
value of Zhanchen to more than USD520 million.
It
is worth mentioning, that the Puyang production base will be the tenth
production base of Zhanchen Group in total and will function at the same time
as the headquarter of the company’s business in North China.
The
new Puyang production base is going to mainly focus on the production of
advanced, environmentally friendly materials.
The
company is very active in investments and capacity expanding currently. Besides
the new production base in Puyang, Zhanchen Group is building two other
production bases in Jiangsu Province and Zhuhai City, Guangdong Province. For
this, it signed an investment agreement with Taixing Economic Development Zone
in Jiangsu Province in late October this year. More than USD90 million is
planned to be invested in the construction of a 150,000 t/a environmentally
friendly coating production bases, which will produce furniture and decorating
paints. According to CCM’s researcher, the project is estimated to start in
2018.
Another
production base in Zhuhai City is likely to be put into operation at the
beginning of 2018. It is mainly engaged in the production of furniture wood
coatings, architectural coatings and resin, with a combined capacity of 150,000
t/a and an investment of over USD40 million. This project aims to set a new
record of the largest single unit coating factory in whole Asia.
On
top of high-speed capacity expansion, attention should also be paid to Zhanchen
Group’s asset restructuring. This is supposed to be finished in early 2018 and,
then, the company will launch the initial public offering and relocate its
headquarter to Zhuhai City. CCM believes Zhanchen Group’s business will be
significantly boosted through these approaches. Once listed on the stock
exchange, Zhanchen Group will have higher potential to grow into a new leading
enterprise in China’s coating industry.
Earlier
this year, a strategic cooperation agreement was signed by four coating giants
from Germany and China. The four strategic allies are each industrial leader in
their specific field. Germany based allnex is the global top
manufacturer of industrial coating resins, Zhanchen Group and Baiyulan
respectively engage in coating production and furniture manufacturing. Homag
China is the leader in machines for wood processing and coating spray.
According
to market insiders, the agreement will set a breakthrough for coming
developments in high gloss WB UV technology application in the furniture
manufacturing industry. The alliance’s mission is to accelerate the development
of green coatings in China, according to executives of the companies.
After
all, the domestic market share of water-based coatings and paints still falls
behind the global market share. Zhanchen Group representatives have announced
the company is committed to the promotion of eco-friendly products in China.
China’s Coatings market
Coating is
the largest consumption field of titanium dioxide in China. From 2013 to 2016,
China's total coating output increased from 15.28 million tonnes to 19.00
million tonnes at a CAGR of 7.53%. Titanium dioxide is used in three major
categories of coating: architectural coating, industrial coating and speciality
coating. Usually, the rutile titanium dioxide is widely applied
in architectural coating and industrial
coating.
The
coating industry is closely related to the real estate sector, so the change of
TiO2 demand could be told by some real estate terminal data. The period from
January to August 2016 had seen a YoY 25.5% increase in the sale areas of
China's real estate. Driven by the property industry, a YoY 6.92% growth of
coating production was witnessed in January to July 2016, with the output
reaching 10.07 million tonnes in China.
About the company
Zhejiang
Zhancheng Group Co. Ltd. provides engineering construction services. The
Company designs, contracts, and constructs buildings including hospitals,
schools, office buildings, and hospitals.
Established
in 1994, Zhanchen, as one leader of paints and coatings in China, has its
headquarter building in Shenzhen and 8 manufacturing bases are located each in
Shenzhen, Beijing, Shanghai, Qingdao, Chengdu, Fuzhou, Dongguan and Zhuhai.
Moreover, Zhanchen Group is now expanding the business of paints and
coating to overseas market, which is demonstrated by the foundation of an
overseas business division in 2016.
About CCM
CCM is China’s leading market intelligence provider for the fields of agriculture,
chemicals, and food & feed.
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