Painting a brighter future for green growth

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.

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