The Paint Association says it's harder for companies with less than 10 percent of the industry's profits to raise prices

"Profits are less than 10 points, so companies react so much." Huang Kai,
association
Guangdong Province," said Huang Kai, president of the China Coatings Association. As taxes may further depress corporate profits, some companies have begun to raise prices, moving costs upstream or downstream, but more are unable to raise prices because of fierce competition.
The current domestic paint market, foreign brands occupy the majority of the market share, business
tumium dioxide
analyst Yang Sun told the Daily Economic News reporter, above the scale of enterprises, foreign investment accounted for 60% of the market share, domestic large
coating enterprises
not much, small and medium-sized piles, the phenomenon of mixed industry fish and dragon is more prominent.
profit is only a few points
it is understood that oily coatings generally VOC content is higher than 420g/L, while
water-based coatings
are low VOC environmental protection coatings. Although powder coatings in the production process of environmental pollution is slightly larger, but most of the end products are also low VOC environmental protection coatings range. Solvent-based coating content is higher than 420g/L, and most of the domestic paint enterprises solvent-based coatings accounted for a very large proportion, including Carrie, Zhanchen coatings, Bards and so on.
"generally
building coatings
, VOC displacement is basically up to standard. But in the marine, aircraft, heavy machinery and other industrial applications are not environmentally friendly enough, "United
Coatings Network
editor-in-chief Fu Zhi told the Daily Economic News reporter.
, an analyst in the information coatings industry, said, "According to the 420g/L standard, the proportion of products that can meet the standards in the domestic production sector is not more than 30%, and in the construction sector it is more difficult to control." "
" we believe that the coating performance requirements of ships, automobiles, aircraft and other important areas, is the focus of this round of consumption tax collection areas. Fu said. Mr Huang said the industry's profits were less than 10 points, so companies reacted so much. Today, with a low proportion of compliant products, a 4 per cent consumption tax would undoubtedly be a blow to the paint industry, which has a net profit margin of less than 10 per cent.raise the price or not?
Fu wisdom told reporters that before the Spring Festival belongs to the paint consumption off-season, price increases are relatively small, some large
ponsion brand
has not yet made a price response. China Airlines new material finance department person Ma Wei revealed that the company is also ready to raise the price of products after the year, but as to how much price increase has not yet been determined.
Jiabaoli related people told reporters that the company's paint profit margin of only 6% to 7%, but the company price increase is unlikely. "Because the paint industry is already quite competitive at price, we will transform our production lines to accommodate the use of water-based coatings by helping downstream wood furniture customers transform."
Yangson believes that the consumption tax on the paint industry will first accelerate the integration of the industry and promote sound development. At the same time, after the coating industry costs increase, the pressure can be transferred downstream, or in turn to the upstream raw material pressure. "I feel that most companies will be wronged to eat up this part of the cost pressure, and then try to press upstream and downstream, to profit self-insurance."
, CEO of United Coatings Network, told reporters that from the ship, automobile, aircraft and other fields, China's paint enterprises have not yet occupied the situation, foreign-funded enterprises have a higher market voice. "This means that the sector is likely to be the first to see a surge in prices."
Huang Kai believes that because most of the tax paid by enterprises above the scale, in the market economy environment, large and medium-sized enterprises to raise prices, may give small-scale, informal enterprise opportunities. "Price increases may have little impact on large companies, while for medium-sized companies, customers may abandon their products and switch to smaller, informal businesses." "We don't think we should be overly optimistic or disappointed about the role of the consumption tax." Guo said.