Powder Coating: A global value chain perspective
Duke University’s Center on Globalization, Governance & Competitiveness (CGGC) reviewed the technology and product market developments in powder coatings from 1950-2000. The study, sponsored by the Corporate Partnerships Program of the Environmental Defense Fund, used Global Value Chain analysis1 to highlight important dynamics in the powder coating industry and how these affected the adoption of powder coating over time. Excerpts from the report on the powder coating value chain structure, the ability of key players to affect the industry, and some challenges of the Chinese powder coating market are provided in this article.
The powder coating value chain (Figure 1) consists of raw materials suppliers, powder coatings manufacturers, independent powder coating enterprises (coaters), and product manufacturers (original equipment manufacturers, or OEMs). Powder coatings manufacturing and application equipment manufacturers (and their component suppliers) enter the powder coating value chain at specific points. Other relevant organizations and institutions are trade associations, trade journals, private consulting organizations, and the regulatory environment. Powder coating was a $6.5 billion industry worldwide in 2008. Powder coatings manufacturing was a $5 billion industry worldwide in 2008. Equipment manufacturing was a $704 million industry worldwide, while independent coating enterprises were an $808 million industry in 2008. Powder coating as a whole makes up approximately 6 percent of the total coating world market and approximately 30 percent of coatings used in manufacturing and commercial applications. The powder coating value chain is most concentrated in the powder coatings manufacturing segment and least concentrated in the coating enterprises segment. Details on each segment of the value chain are provided below.