China’s housing boom fails tostimulate DIY painting

The Chinese Government’s Five YearPlan includes a commitment to build30 M new “affordable housing units”by the end of 2015 and this shouldsupport the ongoing rapid growth inarchitectural paints consumption.However, the earlier anticipatedenthusiasm for a do-it-yourself (DIY)decorating boom seems to haveevaporated. Home Depot, the largestDIY retail chain in North America,entered the Chinese market inDecember 2006, with the acquisitionof the HomeWay group, with 12 retailoutlets and annual revenues of morethan $650 M. At that time, Mr BobNardelli (CEO of Home Depot)assessed the Chinese homeimprovement market as worth $50 bn.Over the past two years, Home Depothas shut down its outlets in Beijing,Qingdao and Shenyang, leaving onlyseven outlets in China – four inTianjin, two in Xi’an and one inZhengzhou. Meanwhile, theKingfisher group (which owns theB&Q, Castorama and Koctas retailchains in Europe) opened its first DIYstore in China in 2002 but has onlyrecently become fully profitable. Also,the group has apparently downsizedits stores in the Beijing area.

By contrast, business is booming forlocal decorating firms, such as DongyiRisheng Decoration Co and BeijingLongfa Architectural Decoration Co,which cater for the growing sector ofmiddle-class homeowners. These firmssupply painting services on an all-inbasis (materials plus labour), typicallyquoting Rmb 20-40 per ping (a localunit of measurement, equivalent to3.345 sq m). That equates to $0.90-1.80 per sq m of painted surface, theprice being mainly dependent on thetype of paint specified. According to MrKeith Nuthall (the author of thissurvey), the customers of DonyiRisheng, Beijing Longfa and similarfirms tend to specify well-known globalbrands of paint from AkzoNobel,Tikkurila and other multinationalsrather than local Chinese brands,mainly because of perceived productconsistency and durability.

Original Source: APCJ, Asia Pacific Coatings Journal,Dec 2011/Jan 2012, 24 (6 (China Country Focus)), 1-2 (Website:http://www.asiapacificcoatingsjournal.com/) © QuartzBusiness Media Ltd 2012

PLANTSCanada, Hungary & Spain: Aditya Birla– carbon black

Columbian Chemicals is now adivision of Birla Carbon, following thecompletion of the $875 M acquisitionby the Aditya Birla group last June.(See ‘Focus on Pigments’, Sep 2011,6). Effective 1 January 2012, BirlaCarbon was established to coordinatethe group’s worldwide carbon blackactivities, with Dr Santrupt Misra asChief Executive Officer. Mr KevinBoyle, who was previously CEO atColumbian, became Chief OperatingOfficer for Birla Carbon. Mr SurendraGoyal was appointed as ChiefFinancial Officer. Mr MadhurimaGupta was appointed as ChiefSourcing & Procurement Officer. BirlaCarbon generates annual revenues ofaround $2 bn and its global carbonblack capacity is around 2 M tonnes/y.

Expansions are already underwayat several of the plants inherited aspart of the Columbian Chemicalsacquisition. Debottlenecking willincrease Birla’s total Europeancapacity by at least 30,000 tonnes/yby the end of March 2012. The mainplants affected will be the 60,000tonnes/y plant at Santander (Spain)and the 106,000 tonnes/y plant atTiszjauvaros (Hungary).

In Canada, Birla has begun workon a 50% expansion at its Hamilton,ON plant, raising capacity here to135,000 tonnes/y. In addition, thecompany is installing a facilitydescribed as “an energy centredesigned to leverage efficiencies ofthe plant to supply electricity for bothinternal and external uses.”Presumably, this means a power co-generation facility. No details werereleased as to the target completiondate.

Mr John Loudermilk (President,North America) said: “Major globaltyre manufacturers have announcedsubstantial expansion programmes inNorth America, driving expecteddemand growth for carbon blackbeyond current production capacitywithin the region. Birla Carbon iscommitted to supporting ourcustomers’ growth plans. TheHamilton plant’s outstanding history ofproducing worldclass products, theproximity to our customer base, and

the excellent talent pool in the Ontarioregion position us well to provide thatsupport.”

Original Source: European Rubber Journal, 23 Jan2012, (Website: http://www.european-rubber-journal.com/) © Crain Communications Ltd 2012 &Press Release from: Aditya Birla Management CorpPvte Ltd, Worli, Mumbai 400030, India, tel: +91 226652 5000, website: http://www.adityabirla.com (14 Feb 2012)

China: Jiangxi Tikon – TiO2

Jiangxi Tikon Titanium, formerlyknown as Jiangxi TianguangChemical, recently launched threenew TiO2 pigment grades andconfirmed its position as one of thecountry’s top six suppliers. At its 50hectares site at Fuzhou-Fubei, thecompany now has facilities producingup to 120,000 tonnes/y of TiO2pigment, of which 100,000 tonnes/yas rutile grades and 20,000 tonnes/yanatase grades. It recently launchedthree new rutile grades, namely: TR-33 (universal); TR-36 (for the plasticsindustry); and TR-39 (described as“high powder resistant”, with excellentdurability and low oil absorption,suitable for paintmakers). JiangxiTikon is a subsidiary within theSanSheng group (headquartered inHong Kong). As well as selling todomestic customers, Jiangxi Tikonalso exports to the US, Japan, Italyand various Southeast Asian markets.

Original Source: APCJ, Asia Pacific Coatings Journal,Dec 2011/Jan 2012, 24 (6 (China Country Focus)), 5(Website: http://www.asiapacificcoatingsjournal.com/)© Quartz Business Media Ltd 2012

China: Nippon Steel Chemical, Sojitz,Yizhou & Koppers – carbon black

Four companies are collaborating in aproject with the city government ofPizhou (Jiangsu province) for theestablishment of a fully integrated coaltar processing complex in Pizhou(about 330 km north of Nanjing). Thepartners are: Koppers Inc(headquartered in Pittsburgh, US); theShandong Yizhou group (based inChina); Nippon Steel Chemical andSojitz Corp (both headquartered inTokyo, Japan). Executives from the fourcompanies and from the Pizhou citygovernment signed a memorandum ofunderstanding in mid-February 2012.Construction work has already begunand is expected to be completed byearly 2014.

MARCH 2012 3

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