Global paint leaders raise prices as a result of the consumption tax

China Coatings network
: the world's
coatings
leader due to the consumption tax increase of 4%, Jin Litai is still in communication has not followed the rise. Beckers, the global paint giant, has officially announced a 4 per cent price increase from April 1, 2015, based on a 4 per cent consumption tax on the paint industry. Jin Litai (300225.SZ) insiders said that the company to
water-based paint
mainly, not all varieties need to be taxed, the varieties that need to be taxed are still in communication with the tax department, whether to raise prices in the future and downstream customers to negotiate. The above-mentioned insiders also said that some contracts are signed on an annual basis, whether to raise prices in the middle, but also need to negotiate with downstream customers; If a 4% price increase is needed, it is already a relatively large price increase.
analyst, who did not want to be named, said that the traditional paint industry currently has an average profit margin of only 6.4%, with the implementation of the consumption tax policy, will also force the transformation of traditional
passing
production enterprises; With the national attention to atmospheric governance, the paint market environmental protection costs continue to increase, pollution of the environment, toxic traditional paint will face industrial integration, "this provision for environmentally friendly coatings, namely water-based,
powder coatings
industry is good news." With the approval of the State Council, a consumption tax will be levied on coatings from February 1st, with an applicable tax rate of 4%, and no consumption tax will be levied on coatings containing volatile organic compounds (VOCs) below 420 g/L (including) during construction.
analysts said that this will force the transformation of traditional paint production enterprises, toxic traditional paint will face industrial integration, environmental protection paint leading enterprises such as Jin Litai is expected to benefit. Domestic paint-related listed companies are Jin Litai (300225.SZ), Yu Three Gorges A (000565.SZ), Rainbow Refining (002256.SZ) and so on. Public information shows that as early as January 1, 2004, the European Union has a total ban on the production and sale of solvent-based paint in EU countries; The U.S. also restricted Chinese paint furniture from entering the U.S. market in 2004. Global
Coatings Network
learned that in the future, with environmental protection requirements more and more stringent, water-based, powder coatings to replace traditional solvent-based coatings consumption and upgrading trend is clear, the policy will force the traditional coatings as the main
coating enterprises
transformation, the paint industry is facing the opportunity of industry reshuffle, environmental protection paint development space is larger.