Adhesive Market of Mainland China Michael Yang Secretary General of CATIA Sept. 26, 2013, Guangzhou -1- 1. Overview of Adhesive Industry in Mainland China Tab. 1 Adhesive output, sales value and growth rate during 2010-2012 Type Year Output (million tons) Sales Value Growth Rate (%) (billion RMB) Output Sales Value 2010 4.628 58.73 14.3 11.7 2011 5.165 66.93 11.6 14.0 2012 5.605 70.88 8.5 5.9 Sept. 26, 2013, Guangzhou -2- 16 15 15.0 14.5 13.4 13.1 13.0 13 14.3 14.2 14 12 11.6 Growth Rate (%) 11 10 8.5 9 8 7.4 7 6 2003 2004 2005 2006 2007 2008 2009 2010 2011 6 2012 5.605 5.165 5 4.628 4.050 4 3.325 3.570 Output (million tons) 2.940 3 2.575 2.279 1.990 2 1 0 2003 2004 2005 2006 Sept. 26, 2013, Guangzhou 2007 2008 2009 -3- 2010 2011 2012 Tab. 2 Classification of Adhesive in Mainland China in 2012 2012 Year Type of Adhesive Waterbased Adhesive Name of Adhesive Sales Volume (1,000 tons) Sales Value (billion RMB) PAE Emulsion 2,250 —— PVAc Emulsion 690 —— VAE Emulsion 437 —— PU Dispersion 34 —— CR Latex 2.6 —— Total 3,413.6 25.36 Sept. 26, 2013, Guangzhou -4- Classification of Adhesive in Mainland China in 2012 (Cont’d) 2012 Year Type of Adhesive Name of Adhesive Sales Volume (1,000 tons) Sales Value (billion RMB) SBS Resin 207 —— CR 170 —— PA 178 —— Total 555 8.46 EVA Resin 222 —— Synthetic Rubber 164 —— Others 125 —— Total 511 10.29 Solventbased Adhesive Hot Melt Adhesive Sept. 26, 2013, Guangzhou -5- Classification of Adhesive in Mainland China in 2012 (Cont’d) 2012 Year Type of Adhesive Reactive Adhesive Others Name of Adhesive Sales Volume (1,000 tons) Sales Value (billion RMB) PU 580 —— Epoxy 124 —— Cyanoacrylate 22.5 —— Modified Acrylate 10 —— Anaerobic 3.1 —— Total 739.6 17.61 Silicone 360 —— Polysulfide 26 —— Total 386 9.16 Sept. 26, 2013, Guangzhou -6- Market Drivers for Fast Growth Silicone Adhesive Polyurethane Adhesive Acrylate Adhesive Sept. 26, 2013, Guangzhou -7- 2. Adhesive Import and Export Tab. 3 Adhesive import and export during 2010-2012 Import 类 别 Volume 时 Export Value Volume Value 间 1,000 tons Growth Rate (%) Billion USD Growth Rate (%) 1,000 tons Growth Rate (%) Billion USD Growth Rate (%) 2010 202.5 22.95 1.696 45.21 326.4 18.95 1.026 31.03 2011 191.1 5.63 1.961 15.63 356.2 9.13 1.238 20.66 2012 181.7 4.92 2.209 12.65 368.8 3.54 1.315 6.22 Sept. 26, 2013, Guangzhou -8- 3. Adhesive Market Segments Tab. 4 Market segments consumption and share in 2012 No. Application Market Consumption (1,000 tons) Market Share (%) Growth Rate (%) 1 Paper Converting and Book Binding 455 8.1 6.3 2 Packaging and Labelling 1,135 20.2 9.9 3 Fibre Processing 430 7.7 7.0 4 Transportation 410 7.3 12.0 5 Footwear and Leather 408 7.3 5.2 6 Consumer/Do-It-Yourself (Retail) 84 1.5 7.7 7 Building/Construction/Civil Engineering/Craftsmen 1,503 26.8 7.4 8 Woodworking and Joinery 856 15.3 7.7 9 Assembly Operations/Other 324 5.8 17.8 5,605 100 -- Total Sept. 26, 2013, Guangzhou -9- Chinese Adhesive Market Share in 2012 Packaging Building/Construction Bookbinding Woodworking Footwear/Leather Fibre Processing Transportation Assembly/Other DIY 20.2% 1.5% 5.8% 7.3% 26.8% 7.7% 7.3% 8.1% 15.3% Sept. 26, 2013, Guangzhou -10- 4. Adhesive Development Trend Analysis 1). Main problems of the industry Excess production Capacity is becoming serious. Domestic market demand is inadequate. Overall product competitiveness is poor. Sept. 26, 2013, Guangzhou -11- 2). Development trend estimate for 2013 Industry economy has been running stably. Overall price level has maintained stable. Enterprise performance has improved slowly. Sept. 26, 2013, Guangzhou -12- 3). Environmental pressure and safety situation Environmental friendly product Enterprise National Standard Trade association Sept. 26, 2013, Guangzhou -13- Thank You China Adhesives and Tape Industry Association (CATIA) Address: Room 2107, Tower B, Tianyuangang Center, No. 2 Dongsanhuan North Road, Chaoyanag District, Beijing 100027, China Tel: +86-10-8766 7165 Fax: +86-10-8766 3015 E-mail: yang@cnaia.org http: // www.cnaia.org Sept. 26, 2013, Guangzhou -14-