This article discusses the challenges growth in developing counties and end-use industries bring and how we need to join efforts across the value chains.
Are you prepared for global growth?
It is an exciting time of growth for resins and coatings producers as the vibrant energy of the rapidly-expanding middle classes of China and India unleash. These new consumers have aspirations that are creating a tidal wave of opportunity for our industry. This opportunity manifests itself through rapid urbanization, accelerating economic growth, rising household consumption expenditure and construction spending.
It is not just about managing geographic growth but also growth in certain end use industries as MarketsandMarkets research points out:
“The growing popularity of various types of protective coating resins such as alkyd, acrylics, epoxy, polyurethane and polyester in various end-use applications plays a significant role in driving the market.”
With growth rates of 6-7% in China and India set to continue plus the increasing demands for higher value coatings, pressure is being put on the efficiency and effectiveness of supply chains. Not just regarding availability and logistics, but also to become more innovative and agile in responding to the increasing sophistication of coating requirements and consumer expectations. Mix in the growing pressure for more sustainable solutions, and you have a very fizzy cocktail of challenging elements that individual companies will find hard to master without some level of value chain integration.
Managing dynamic growth
Growth is always a two-sided coin. On one side you have a clear business opportunity that you can address, but on the other side, you have to be in a position to manage the growth effectively. If you don’t have the resources in place, it can damage your brand for a long time. In resins & coatings, the management side of the coin often requires a much closer collaboration within existing value chains or finding new suppliers who can turn the supply tap on and off as you need it.
Global integration will be key
To manage growth and the risks of supply that come with growth means finding the right strategic partners – ones that add value to your business and your customers. Whether it is growth due to geography or in new end use industries, you will need partners that have the infrastructure and critical mass to support you globally.* This is a tall order as it requires greater integration with suppliers and/or vertical integration of part of the supply chain, but will become increasingly important as coatings grows worldwide.**
Ulrika Andersson, Executive Vice President for Specialty Polyols & Solutions, shares her thoughts on the subject: “Growth of coating led by a prosperous development in countries like India and China, will not only bring further spectra’s of colors, but signs of infrastructural expansion being true enablers for a countries development. The need for a sustainable growth is a true global responsibility, which should and could only be solved through joint efforts across global value chains. Innovative environmental friendly technologies, renewable and/or waste based raw materials supporting matching new needs and demands are already within reach or a solution away from realization.”