Painting a brighter future for green growth
Even as some foreign enterprises are searching for greener pastures to offset lower economic growth, rising labor costs and higher expenditure on environmentally friendly plants in China, companies like Axalta still believe that the grass is greener in the world's second-largest economy.
China still an important market for global manufacturing success, says Axalta chief
Charles Shaver, chief executive officer of Axalta Coating Systems, a leading global supplier of liquid and powder coatings, however, remains undaunted by some companies moving to countries like Thailand, the Philippines and India. The chemical industry veteran, with more than three decades of experience, believes that China is still far ahead of others in terms of the potential for sustained growth and robust development.
As leader of the world's second-largest waterborne coating products and services provider and a major coating supplier to the transportation and industrial sectors, Shaver should know better as Axalta has seen a period of steady and consistent growth in China.
Unlike most of his peers, Shaver has ample experience in the China market, dating back to his first visit to the country in 1986. Decades of working closely with the China market have made Shaver believe that understanding the market, the staff and the clients is key to making the right decisions in China.
"Axalta operates around the globe, and every market has its particular opportunities and challenges. We believe that understanding the localities is the key to success. China is so vast and even two neighboring cities may favor different colors for coatings. So it is really important to understand the local market demands, and cater to the needs," he said.
Axalta was formed in 2012 when chemicals giant DuPont sold its paint business to the Carlisle group. Headquartered in Philadelphia, the United States, the company has several well-known paint brands like Duco, Dulux, Lucite and Imron under its banner.
Last month, Warren Buffett's Berkshire Hathaway said it was buying a 9 percent stake in the company.
Yet another key attribute for Axalta's sustained growth would be talent. Shaver said that he plans to add to the roughly 2,000 people it already has in China.
"We want to see more Chinese talent in leadership positions because they have direct knowledge including consumers' spending habits, client demands, policies and regulations, and the particular demands for each product and service," he said.
Last year, about 19.6 million cars were sold in China, and the number is expected to grow further this year, according to data from the China Association of Automobile Manufacturers. That, Shaver said, will trigger further demand for industrial coatings.
With the global economy recovering, demand for coatings may pick up in the next few years, and the sector may see further growth in 2015 and 2016, according to the China Coating Industry Association.
At the same time, the industry standards for the coating sector may also go up a notch, considering China's determination to cut carbon emissions and focus on green growth, Sun Lianying, head of the CCIA, said in a recent industry report.
Though China's market for paints and coatings has been growing at a steady clip, competition has also become intense with big global players like AkzoNobel, PPG, BASF and Nippon trying hard to win market share in painting and coating products.
Shaver said that Axalta is already well ahead of its peers in waterborne coating for cars and has more than 140 years of research and development experience in the sector.
But the real challenge, Shaver said, is not in terms of technology, but in the constantly changing demand that requires companies to be more flexible and adaptable. "For instance what works in Europe need not necessarily work in China and vice versa," he said.
In China many products and services are tailor-made to meet clients' demands, and Axalta offers some 13,000 colors every year.
So continuous investment in research and development is not only a necessity, but needs to be backed with automation to ensure steady productivity, said Shaver.
Explaining the high levels of automation already in existence at Axalta, he said that it requires just eight people to operate its entire product line. Shaver, however, reiterated that the added focus on automation does not mean less employment opportunities.
"The objective of automation is to increase productivity and separate people from those conditions which are unfriendly to employees, such as noise. As long as China keeps maintaining its positive growth and market expansion, the demand for productivity will pick up and employment opportunities will grow," he said.
Compared with Japan and several European Union nations, where waterborne coatings account for some 60 percent of the paint used in cars, China has yet to develop regulations on the same scale.
Waterborne coatings are environmentally friendly and regulations governing their increased use will prove beneficial to coatings makers in the long run, he said.
Many Chinese domestic carmakers have started using more waterborne coatings, even though they are more expensive than the traditional powder-based coatings despite the higher investment for equipment revamp and staff training.
"It is an indication of China's commitment to develop in greener ways," said Shaver.
Driven by the customer demand for sustainable practices and by national policies, the automotive industry in China is in need of advanced coating technologies that will enable it to reform its production lines so that it can cultivate economic growth in a manner that is also environmentally responsible and meets societies' obligations.
Known as a direct and efficient leader among staff, Shaver does not mince words when asked if he still regards China as a magnet for investment.
"It is true that many labor-intensive companies have been moving out of China and it is not surprising because this is how the sector works. Manufacturers need to consider costs in line with clients' demand," he said.
Axalta Coating Systems is also aware of the rising labor costs. Currently, some products and services provided in China are already a 15 percent higher than their counterparts in Europe, partly due to the rising labor costs in the country.
Axalta's clients have recognized the reasons and are accepting the price hikes, he said. And for Axalta, China's higher labor costs have a silver lining.
"The professionals are much better educated and have more skills. In any case, Axalta looks after employees' welfare. We stay with our clients, and we believe that China still has a pro-business environment and we anticipate further growth in the market," said Shaver.
Jiading facility to spearhead environmentally friendly efforts
Axalta Coating Systems, the Philadelphia-based liquid and powder coatings maker, signaled its plans to further expand in China earlier this year, after it started manufacturing from its new facility in Shanghai's Jiading district.
The new facility in Jiading Industrial Zone, or the East China hub for automakers, produces environmentally friendly waterborne automotive OEM coatings with annual output capacity of 25,000 metric tons.
The coatings will be "highly efficient, energy-saving, and specially developed for car makers", said Charles Shaver, CEO of Axalta Coating Systems.
The Jiading facility was set up with an investment of $50 million, and the company will invest further amounts to expand research and development functions in the near future in Shanghai.
All the products and services offered by the new facility in Jiading are catered to meet demand from China, mainly from East China's automobile manufacturers.
From BMW to Geely, from GM to Cherry, a wide range of foreign and domestic car brands have been using Axalta's products and services, asking for greater productivity from the coating system.
Driven by customer demand for sustainable practices and by national policies, the automotive industry in China has triggered demand for advanced coating technologies. This, in turn, will enable the industry to reform its production lines so that it can cultivate economic growth in a manner that is environmentally responsible and meets social obligations.
The Jiading plant is designed and operated in a way to meet these goals, said Shaver. All the production areas in Jiading comply with Axalta's sustainable production protocols, he said.
Charles Shaver, chief executive officer of Axalta Coating Systems, a leading global supplier of liquid and powder coatings, however, remains undaunted by some companies moving to countries like Thailand, the Philippines and India. The chemical industry veteran, with more than three decades of experience, believes that China is still far ahead of others in terms of the potential for sustained growth and robust development.
As leader of the world's second-largest waterborne coating products and services provider and a major coating supplier to the transportation and industrial sectors, Shaver should know better as Axalta has seen a period of steady and consistent growth in China.
Unlike most of his peers, Shaver has ample experience in the China market, dating back to his first visit to the country in 1986. Decades of working closely with the China market have made Shaver believe that understanding the market, the staff and the clients is key to making the right decisions in China.
"Axalta operates around the globe, and every market has its particular opportunities and challenges. We believe that understanding the localities is the key to success. China is so vast and even two neighboring cities may favor different colors for coatings. So it is really important to understand the local market demands, and cater to the needs," he said.
Axalta was formed in 2012 when chemicals giant DuPont sold its paint business to the Carlisle group. Headquartered in Philadelphia, the United States, the company has several well-known paint brands like Duco, Dulux, Lucite and Imron under its banner.
Last month, Warren Buffett's Berkshire Hathaway said it was buying a 9 percent stake in the company.
Yet another key attribute for Axalta's sustained growth would be talent. Shaver said that he plans to add to the roughly 2,000 people it already has in China.
"We want to see more Chinese talent in leadership positions because they have direct knowledge including consumers' spending habits, client demands, policies and regulations, and the particular demands for each product and service," he said.
Last year, about 19.6 million cars were sold in China, and the number is expected to grow further this year, according to data from the China Association of Automobile Manufacturers. That, Shaver said, will trigger further demand for industrial coatings.
With the global economy recovering, demand for coatings may pick up in the next few years, and the sector may see further growth in 2015 and 2016, according to the China Coating Industry Association.
At the same time, the industry standards for the coating sector may also go up a notch, considering China's determination to cut carbon emissions and focus on green growth, Sun Lianying, head of the CCIA, said in a recent industry report.
Though China's market for paints and coatings has been growing at a steady clip, competition has also become intense with big global players like AkzoNobel, PPG, BASF and Nippon trying hard to win market share in painting and coating products.
Shaver said that Axalta is already well ahead of its peers in waterborne coating for cars and has more than 140 years of research and development experience in the sector.
But the real challenge, Shaver said, is not in terms of technology, but in the constantly changing demand that requires companies to be more flexible and adaptable. "For instance what works in Europe need not necessarily work in China and vice versa," he said.
In China many products and services are tailor-made to meet clients' demands, and Axalta offers some 13,000 colors every year.
So continuous investment in research and development is not only a necessity, but needs to be backed with automation to ensure steady productivity, said Shaver.
Explaining the high levels of automation already in existence at Axalta, he said that it requires just eight people to operate its entire product line. Shaver, however, reiterated that the added focus on automation does not mean less employment opportunities.
"The objective of automation is to increase productivity and separate people from those conditions which are unfriendly to employees, such as noise. As long as China keeps maintaining its positive growth and market expansion, the demand for productivity will pick up and employment opportunities will grow," he said.
Compared with Japan and several European Union nations, where waterborne coatings account for some 60 percent of the paint used in cars, China has yet to develop regulations on the same scale.
Waterborne coatings are environmentally friendly and regulations governing their increased use will prove beneficial to coatings makers in the long run, he said.
Many Chinese domestic carmakers have started using more waterborne coatings, even though they are more expensive than the traditional powder-based coatings despite the higher investment for equipment revamp and staff training.
"It is an indication of China's commitment to develop in greener ways," said Shaver.
Driven by the customer demand for sustainable practices and by national policies, the automotive industry in China is in need of advanced coating technologies that will enable it to reform its production lines so that it can cultivate economic growth in a manner that is also environmentally responsible and meets societies' obligations.
Known as a direct and efficient leader among staff, Shaver does not mince words when asked if he still regards China as a magnet for investment.
"It is true that many labor-intensive companies have been moving out of China and it is not surprising because this is how the sector works. Manufacturers need to consider costs in line with clients' demand," he said.
Axalta Coating Systems is also aware of the rising labor costs. Currently, some products and services provided in China are already a 15 percent higher than their counterparts in Europe, partly due to the rising labor costs in the country.
Axalta's clients have recognized the reasons and are accepting the price hikes, he said. And for Axalta, China's higher labor costs have a silver lining.
"The professionals are much better educated and have more skills. In any case, Axalta looks after employees' welfare. We stay with our clients, and we believe that China still has a pro-business environment and we anticipate further growth in the market," said Shaver.
Jiading facility to spearhead environmentally friendly efforts
Axalta Coating Systems, the Philadelphia-based liquid and powder coatings maker, signaled its plans to further expand in China earlier this year, after it started manufacturing from its new facility in Shanghai's Jiading district.
The new facility in Jiading Industrial Zone, or the East China hub for automakers, produces environmentally friendly waterborne automotive OEM coatings with annual output capacity of 25,000 metric tons.
The coatings will be "highly efficient, energy-saving, and specially developed for car makers", said Charles Shaver, CEO of Axalta Coating Systems.
The Jiading facility was set up with an investment of $50 million, and the company will invest further amounts to expand research and development functions in the near future in Shanghai.
All the products and services offered by the new facility in Jiading are catered to meet demand from China, mainly from East China's automobile manufacturers.
From BMW to Geely, from GM to Cherry, a wide range of foreign and domestic car brands have been using Axalta's products and services, asking for greater productivity from the coating system.
Driven by customer demand for sustainable practices and by national policies, the automotive industry in China has triggered demand for advanced coating technologies. This, in turn, will enable the industry to reform its production lines so that it can cultivate economic growth in a manner that is environmentally responsible and meets social obligations.
The Jiading plant is designed and operated in a way to meet these goals, said Shaver. All the production areas in Jiading comply with Axalta's sustainable production protocols, he said.
