Analysis of Competitive Structure of China Acrylic Emulsion Industry

Update:19-04-2018
Summary:

The acrylic emulsion market has been stable in the rece […]

The acrylic emulsion market has been stable in the recent period. Due to the dual impact of raw materials and demand side, the watchmakers are willing to lower their offers. For the first three quarters of this year, the acrylic emulsion market will be analyzed in detail using the Porter Five Force model:

First, judging from the threat of new entrants, the Hunchun new material emulsion unit in Hebei in the first half of the year has been put into production, and it has been produced on a single basis. There are still plans for companies to increase production capacity. From the current demand side, the downstream coating industry has entered a situation of overcapacity. However, this year's environmental monitoring efforts have been more effective, effectively promoting the "oil to water" process. According to incomplete statistics, there are about 2 million water paint production capacity increase. . It is expected that the new entrants in the later period will launch competition for possession of new downstream markets, and will have a certain impact on the established companies in the industry.

Secondly, judging from the threat of alternatives, the market share of acrylic resin has narrowed down under the environmental protection policy. However, the quality of acrylic emulsions has not reached a level that can completely replace acrylic resins. Acrylic emulsions are used in government support and corporate research and development. With continuous investment, the emulsion market continues to expand and its market share has gradually increased.

Then, judging from the supplier's bargaining power, acrylic emulsions have a wide range of products and the materials are complex and diverse. The major impact on costs are butyl acrylate, styrene, and MMA. Due to the large amount of ingredients in the formula, most of the products are used in small quantities, and there are many suppliers that can be selected, but the substitution is not strong. To ensure the quality of the emulsion, it is less likely to change suppliers. However, price wars between suppliers continue to be staged, offer prices are relatively flexible, and bargaining power is weak. Acrylic emulsion have been shrinking in profit in recent years and will soon enter the “early profit era”, with high cost or weak demand, and acrylic emulsion manufacturers will face no small pressure.

Finally, judging from the degree of competition among competitors in the industry, the main competitiveness in the industry is mainly: private enterprises, joint ventures, and wholly foreign-owned enterprises. The total capacity of the private sector accounts for about 80% of the total, which is mainly attributed to Baldwin Group and Poly. Its quality, product structure, price positioning and downstream customer groups all have great similarities. The competition between them is fierce. This part of the company is mainly based on direct sales, a wide distribution of production capacity, has a strong operating retail outlets and geographical and cultural advantages. The total capacity of the joint venture accounts for about 8%, mainly from Guangdong Andex, etc. Their multi-production capacity is concentrated in the province of paint, with a narrow range of distribution, and marketing is combined with direct sales and agents. The total production capacity of foreign-owned enterprises accounts for 12%, mainly BASF, Dow Chemicals, etc. The products are high-grade and have a higher orientation, mainly based on agent sales. Not only does it have advanced management experience, strong R&D strength and funding, but it also has a high level of customer acceptance, but it lacks agility relative to the Chinese market. The same target groups in the industry have caused the competition in the industry to intensify and the price war in the latter stage will intensify.