The influences on the Chinese markets are diverse, reaching from regional differences via government control, tighter regulations or fragmentation and overcapacities in core branches. Any strategy for this diverse market must therefore be as versatile and flexible as the situation demands, analysts expect. Yet, most experts agree on several core elements: As most Chinese companies still mass produce high volume goods, foreign companies should go for niche markets and embrace complexity of products and services.
Markets that suffer from overcapacities, such as basic materials and commodities, should be thus avoided in favor of attractive specialties such as electronic chemicals, functional coatings, membrane materials, pharmaceuticals or water treatment products. Christian Kohlpaintner, member of the Clariant Executive Committee, commented: “When we look at the specialty chemicals market in China, we expect growth of about 7 % per year. There is a clear trend for consumption driven growth, with a shift towards innovative products and service offerings.”
Long Time Strategy Pays Off
Since Chinese companies tend to be oriented towards quick success, a strategy that focusses on long-term development can be favorable. As local administration is becoming increasingly rule bound and eager to stomp out corruption, direct government relationships are becoming less and less important — a factor that is underlined by the fact that state-owned firms saw declining sales while domestic players grew.
With China pushing into a new era of industrialisation, chemicals and petrochemicals are especially affected. While the size of the sector is enormous, innovation ability, efficiency and integration is not quite often not on-par with the global competition. Can the ‘Made in China 2025’ herald a new dawn for Asia’s chemical and petrochemical industry? Discover more in our online whitepaper What the New Era of Made-in-China 2025 means for Petrochemicals and Chemicals