An interview with Roger Moo, Senior Marketing Manager

for Coatings, Dow Latex, Pacific Area

What is your overall view of the waterborne architectural coatings market in China?

The architectural coatings market in China will continue to be robust for the next five to six years. It will lead Asia in volume, value, advancement in research, production and application technology.

How large is this coatings

market in China?

The architectural coating market size in 2004 should be around 1.4 million MT a year.

How fast is it growing? What were the growth rates over the last five or 10 years? What will they be over the next five or 10 years?

It had been growing at 15% for the last five years and is projected to be growing at above 10% for the next five or 10 years.

What are its largest segments and how big are they?

The largest segment is medium-range economic interior emulsion paint. The size should be around 500,000 MT a year.

Please outline the main drivers of growth.

The main drivers are (1) the robust economic growth that improves people's ability to purchase a better home; (2) the government effort in pushing for home ownership; and (3) the belief that properties are one of the best investments that provide good returns. As a result, property demand remains strong, which helps to escalate the sales in the China coatings market.

Please outline the market's main obstacles.

The fear of a bubble crisis has driven the government to cool down the economy by macro control recently. This will unavoidably slow down the growth of the coatings industry in China. Another problem is the high energy and hydrocarbon costs that have escalated coatings costs. The lack of nationwide implementation of a paint standard and good application know-how may be an obstacle.

Who are the largest players in the market?

The largest players in the decorative market are Nippon Paint, ICI Paint, Beijing Red Lion, Hampel Hai Hong, Shunde Huarun, China Paint, Camel Paint, Shanghai Huli, Wuhan Shanghu, Shanghai Zhongnan, Shanghai Sto, Shanghai Shenzhen and Guangzhou Zhujiang Chemical.

Any comments on the product technology in Asia and developments within UCAR Emulsion Systems?

In line with the government effort to save energy and EHS implementation, our technology development is geared towards this direction. Meeting green labels, low VOC, high-solids input and better weathering resistance are all important factors.