The status of UV radiation curing markets and technology in China.

The objective of this article is to highlight the markets for radiation curable products in China as the Chinese market has been growing rapidly in recent years. This report summarizes the input of around 81 leading companies, including 31 that produce raw materials (chemicals), 51 that manufacture UV products (where eight of them supply both) and six suppliers of UV lamps and equipments (some of them supply multiple products). The growth rates of raw materials and UV curable products are 42.7% and 11.1% respectively, with the total growth rate of 27% in 2002. The production value of raw materials and radiation curable products in China has been increased with growth rates of 54.2 and 12.0% respectively, and the total growth rate of 33.1% in 2002. Market trends, growth rate of each major segment, and technological developments are reviewed.

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INTRODUCTION

Increasing environmental concerns and ongoing legislation to cut the emissions of volatile organic compounds (VOCs) have been the major driving force behind the development of radiation curing coatings over the past 30 years. Radiation curing, including ultraviolet (UV) and electron beam (EB) curing technology, is now being increasingly used in various sectors of applications because it is a clean and green technology that increases productivity as compared with other traditional methods of curing. This technology is now commonly utilized to perform the ultra fast drying of protective coatings, varnishes, printing inks, and adhesives, and to produce the high definition images required in the manufacture of microcircuits and printing plates. Besides its great speed and spatial resolution, radiation curing presents a number of other advantages, in particular ambient temperature operation, solvent-free formulations, low energy consumption, and the production of polymer material with tailor-made properties.

Financial crises around the world have had an impact on the economic growth in all countries in Asia, including China, but the market for radiation curing has been greatly expanded in recent years. The strong growth in radiation curing currently is still predominant in UV curing technology in China. However, as the price of low energy accelerator further decreases, this technology is going to be very promising in the future markets.

As a developing country, China's market for radiation-curable products is small compared with North America, Europe, and Japan. However, with the opening up of China's economy, the introduction of advanced radiation curing technology from abroad is promoting the market growth of the domestic radiation curing industry through the developments of telecommunications, fiber optics, mobile phones, computers, graphic arts, packaging, household electronic appliances, architectural materials, and so on.

The nationwide association for the Chinese radiation curing community--RadTech China--founded in 1993, is playing a key role in information exchange and business among its members and Chinese experts, and their counterparts in other parts of the world. The increasing use of curable materials for coatings, inks, and adhesives provides an incentive for the development of new varieties of oligomers, multifunctional monomers, and photoinitiators. Some remarkable progress has been achieved in the research on photopolymers related to area of radiation technology in China. (1)

The industry growth rate for UV/EB radiation-curable materials in 2000 in China was the highest, i.e., 22%, among all Asian countries. (2,3) While the economies in most regions of the world struggled in 2002, the Asian Pacific region fared better, since China is the primary driver of growth and has experienced reasonable-to-good GDP growth. Definitely, the country with the most growth last year and also forecasted for the next five to eight years is China. This article provides a short overview of 81 leading companies, including 31 that produce raw materials (chemicals), 51 companies that manufacture UV products, and six suppliers of UV lamps and equipment (some of them supply multiple products). Moreover, the trends and applications of UV products in industry and the outlook of Chinese market trends and technological developments collected by RadTech China for year the 2002 are reviewed.

GENERAL TRENDS OF THE UV-CURING MARKET

Growth in the radiation-curing market is not a simple issue. There are trends away from some chemical types of resins, photoinitiators, and additives, and towards others. Likewise, some end-use applications are currently more successful than others. Subsequent growth in these applications stems in some cases from the increasing penetration of UV technology, and in others from a buoyant overall market for coated products. For the purpose of market understanding, the industry can be segmented by application areas. Currently, the largest application area for UV coatings in terms of volume is furniture and construction, where these products are used mainly on wooden furniture, and also on various resilient flooring surfaces. This is closely followed by the printing and packaging industries, including inks, and clear overprint varnishes (OPV), as shown in Figure 1. Table 1 lists typical applications for UV coatings in each case of the major industries. These two tiers in the UV coating industry--raw material supply and formulation--are aligned in very different ways. The raw materials suppliers tend to be aligned along the chemical types. Therefore, the acrylate, cationic, and powder resin markets all have different market leaders, as does the photoinitiator market.

MARKET GROWTH OF RADIATION CURING

In the past 10 years, the market growth of radiation curing has been rapid and a wide variety of influences will further drive the growth in China, including the entrance into the World Trade Organization (WTO), greater liberalization of the media, distribution, and competition among the industries.

It is natural for high market growth to meet the demands and requirements of rapid national economic development and for production, along with consumption, to start from a lower volume basis. However, in the last three years the upgrading of domestic varieties output, the quality and value of radiation-curing products have become even more significant in comparison with the past. Moreover, their applications have also expanded to some new fields. During this period there has been are increasing number of domestic companies dealing with radiation curing. According to the investigations of the 81 leading companies mentioned earlier, the developing positions of different companies with respect to their products in 2001 and 2002 and shown in Figures 2 and 3.

Coatings and inks remain the largest application areas for UV-curable materials in China. In the past years although some radiation-curable products were imported, the products produced by Chinese manufacturers have expanded rapidly. The total outputs of radiation-curable coatings, monomers, and inks were 16,741 tons, 13,862 tons and 3,968 tons, respectively, in 2002, while in 2001 outputs were 15,245 tons, 8,879 tons, and 3,416 tons, respectively. As a result, growth in production value is 9.8% for coatings, 56% for monomers, and 16% for inks.

RAW MATERIALS

The demand for raw materials to serve the industries is still increasing rapidly and new possible end uses are constantly emerging. In 2002, the total market for raw materials of radiation curing in China was estimated to be 30,419 tons. At the end of 2001, the radcure plants invested by UCB Co. Belgium in Shanghai and Taiwan Eternal Chemical Co. in Zhuhai, made breakthroughs in promoting the Chinese market. Moreover, many domestic corporations are expanding their production capacity.

The production value of monomers has increased from 2001 to 2002 with a growth of 61.0%, as listed in Table 2, as China has transformed from an import country to an export country. Oligomers are another important product for UV curing. Until now, it was difficult for the suppliers of domestic oligomers to meet the needs of the market due to low annual production output. According to rough estimates in 2001, the market share of domestic oligomer products was small, therefore most of them were imported. However, in 2002, the output of oligomers was 7,037 tons with a growth of 107.6% compared with 2001, which was 3,390 tons. The production value has increased to $4.66 million U.S. which is almost three times that in 2001 due to enhanced production of expensive polyurethane acrylates.

Photoinitiator is a key product for UV curing, having the fastest growth rate in the past three years in China's market. The domestic routine photoinitiators not only meet the market need but are also beginning to be exported to foreign markets including the United States, Europe, and other regions. The output of photoinitiators in China increased from 9,042 tons in 2001 to 9,520 tons in 2002. It was a new record, although annual growth was 5.3% compared with 2001.

However, the outputs of benzil and bezoin were included in the statistical data totals of 2001 but not in 2002; this highlights the greatly increased output of other photoinitiators. Moreover, the production value increased from $46.14 million U.S. in 2001 to $58.12 million U.S. in 2002 with a growth of 26%. The production of exports increased from 7,200 tons to 7,450 tons, earning $45 million U.S. as foreign exchange with a growth of 24.4% (Figures 4 and 5).

UV PRODUCTS

There are a large number of end-uses for radiation curable industrial products in China. The data listed in Tables 2-4 are attempts to segment and evaluate the status of output, growth, and production values of this diverse market. (4,5) The major markets of UV-curable coatings are wood/bamboo, flooring coatings, and PVC coatings. Overprint for paper is another important market. Table 3 shows that there are still numerous areas where radiation-curable system have barely penetrated, such as automotive coatings, anticorrosive coatings, and metal coatings.

The output of UV coatings was 16,741 tons in 2002, with a growth rate of 9.8% (Figure 6). However, the production values decreased from $62.52 million U.S. to $60.95 million U.S. with a negative growth of 2.5%. In domestic markets, most UV coatings are middle grade. The supply is greater than the demand, which causes tough competition among the suppliers. As a result, they sell products at a low price so the production value is decreased due to increased volume and competition.

China is the sixth largest manufacturer of inks in the world. It represents 6% of the production capacity in the world. It is observed that the fastest growing areas in China are jet inks and the whole gamut of offset printing from simple news inks to high gloss inks or coldest web offset inks. The total output of 22 UV ink manufacturers was 3,968 tons in 2002 with a growth of 16.2% compared with 3,416 tons supplied by 29 manufacturers in 2001. The production value decreased with a negative growth of 4.3%, as listed in Table 2. The output of offset, gravure, flexible, silk screen, and so on are listed in Table 4.

The Chinese are emphasizing developing top grade and fine package printing products, increasing the additional value of products and meeting the needs of some home markets and exports. To do so, Chinese officials stress that the printing industry must consolidate and develop existing offset printing ability, increase gravure printing, screen printing, ink jet printing, and curved surface printing, develop flexo printing, and improve post- press integration and technology.

In the field of photolithography, Second Film Plant of China Leikai Film Group is progressing well. Its output has increased with a growth rate of 20% as shown in Table 2. The consumption of UV-curable materials used in the electronics field is increasing rapidly due to the fast development of the information technology (IT) industry in China.

The output for radiation-curable adhesives was estimated at 23 tons in 2002 by three corporations compared with 1.9 tons in 2001 by two corporations. The development of radiation-curable adhesives is quite recent in comparison with industrial coatings and graphic arts. In addition to the environmental drive, other factors such as unique cure properties and the move of the automotive industry towards replacing mechanical fastening and welding with chemical bonding are influencing the growth rate of radiation-curable adhesives.

EQUIPMENT

UV-curing equipment is also growing rapidly to meet increasing demands. In 2002, 1.642 X [10.sup.5] UV lamps were manufactured. However, the output of several kinds of equipment for different applications, such as nonelectrode lamps, portable lamps, and spotcure lamps shows a remarkable growth rate of 128.9%. The production value also increased, with a growth rate of 84.6%.

The progress in electron beam curing is not the same as with UV in China. EB accelerators are normally used in radiation processing heat shrinkage materials and crosslinked cables and wires. However, there have not been any EB facilities for radiation curing on an industrialized scale due to its expensive cost.

DEVELOPMENT OF CORPORATIONS INVOLVED IN RADIATION-CURING TECHNOLOGIES

There are definitely opportunities for many companies to flourish in the radcure market. Although double-digit growth rates are no longer the norm, the radcure market continues to post high number growth rates. According to a recent survey by RadTech China, there are mainly 81 corporations, with 64 of them supplying UV products, while the other 17 corporations partly producing monomers, oligomers, and UV products. According to detailed information on these corporations, there are a total of 4,624 employees working in UV curing, among them 17.9% technicians. ISO 9001 or ISO 9002 has certified 33 corporations among all those currently operating. The status of different types of corporations involved in radiation curing in China is shown in Figure 7. The Chinese market has established a fair environment to make enterprises of all kinds of ownership, including private companies, joint ventures, and state-owned companies dealing with radiation curing, compete on an equal footing. In addition, some foreign companies, such as Fusion, Sartomer, Ciba, UCB, DSM, ChemFirst, BYK, BASF, Tego, Bayerand, and so on, have established their offices or conducted business in China, which has contributed to the development of the Chinese radiation-curing market. The implementation of the ambitious western development campaign will also provide new business opportunities for radiation-curing technology. In fact, the Chinese government is supporting the country's strategy of opening up the western region with preferential policies including an increase of funds for infrastructure construction, environmental protection, and incentives for overseas investment.

MARKET POTENTIALS AND OPPORTUNITIES

China is a developing country, with one fifth of the world population and vast territories. This fact alone indicates the potential market factor and opportunities for radiation-curing technology. In recent years, China's economy has been improving, while the world economy has begun to slow down. For example, the U.S. economy entered a recession and Europe economy began to show signs of exhaustion after long-term and rapid progress, in particular after suffering the September 11 terrorist attack on New York and Washington, D.C. Moreover, the economy of Japan has not recovered from the prolonged recession that started in 1992 due to the burst of the technology prosperity bubble. The sustaining development of China's economy will be accompanied with urgent requirements for high and new technologies, including radiation-curing technology. Moreover, in 2001, Beijing was selected as Host City of the 2008 Summer Olympic Games. This event means a number of key projects related to the 2008 Summer Olympic Games will be starting before long--possibly a promising application field for radiation curing.

CONCLUSIONS

This short overview of the Chinese market has shown that there are still many opportunities for growth in radiation curing. High growth will continue through continued evolution in well-established areas (wood coatings, screen and offset inks, etc.), addressing technological shortcomings by developing new technologies and new raw materials (UV-curable waterborne, UV-curable powder), and by entering new application fields (composite and gel coats, automotive OEM, and refinish coatings etc.).

Table 1--Industrial Applications for UV Coatings

Furniture     Electronics and  Printing and
Construction    Telecom          Packaing    Automotive

Wood          PCB assembly     Inks          Head lamps
                                             Clearcoats
                                             (interior and exterior)
PVC flooring  PCB protective   OPV
                coatings
Foils         Optics fibers    Release       Printed dashboard
                               coatings        components
MDF
              CD clearcoats

Furniture
Construction  Consumer Goods

Wood          Plastic casings
                (TV, mobile phone)
PVC flooring
Foils         Skis and
              equipment
MDF           Spectacle lenses
              Mirror coatings

Figure 1--Application areas for UV curing.

Printing and packing  (35%)
Consumer goods        (13%)
Electronics            (9%)
Automotives            (4%)
Wood and furniture    (39%)

Note: Table made from pie chart.

Figure 2--Market shares of different corporations working in UV curing
in 2001.

UV products    (53.66%)
UV lines       (10.57%)
Raw materials  (35.77%)

Note: Table made from pie chart.

Figure 3--Market shares of different corporations working in UV curing
in 2002.

UV Products    (56.0%)
UV line         (7.4%)
Raw materials  (36.6%)

Note: Table made from pie chart.

Figure 4--Market shares of different UV products.

Coatings  (80%)
Inks      (19%)
Others     (1%)

Note: Table made from pie chart.

Figure 5--Market shares of different raw materials used in the UV curing
industries.

Monomers         (45.5%)
Photoinitiators  (23.1%)
Oligomers        (31.4%)

Note: Table made from pie chart.

Table 2--Output and Production Values for UV Curing in 2001 and 2002

                                Output (Tons Per Year)
Products                        2001              2002

Raw materials  Monomers          8879             13862 (a)
               Oligomers         3390              7037
               Photoinitiators   9042              9520
UV products    Coatings         15245             16741
               Inks              3416              3968
               Print plates     14837             17810
                                  [m.sup.2]         [m.sup.2]
               Adhesives            1.9              23
UV lines       Lamps                2.63 X            1.642 X
                                      [10.sup.5]        [10.sup.5]
               Equipment          465              1060
               Raw materials    21311             30419
Total          UV products      18661             20732
               UV lines            --                --
               total            39972             51151

                                 Output (Tons  Production Value (Million
                                 Per Year)     U.S.$)
Products                         Growth (%)     2001    2002

Raw materials  Monomers           56.1          23.21    37.36
               Oligomers         107.6           4.66    18.63
               Photoinitiators     5.3          46.14    58.12
UV products    Coatings            9.8          62.52    60.95
               Inks               16.2          35.82    34.28
               Print plates       20            52.36    72.31
               Adhesives        1110.5           0.082    0.206
UV lines       Lamps             -37.5           6.602    4.33
               Equipment         128.9           1.57     2.90
               Raw materials      42.7          74.01   114.11
Total          UV products        11.1         151.43   169.59
               UV lines           --             8.17     7.23
               total              --           233.62   290.92

                                 Production Value (Million U.S.$)
Products                         Growth (%)

Raw materials  Monomers            61.0
               Oligomers          299.7
               Photoinitiators     26.0
UV products    Coatings            -2.5
               Inks                -4.3
               Print plates        38.1
               Adhesives         1506
UV lines       Lamps              -34.4
               Equipment           84.6
               Raw materials       54.2
Total          UV products         12.0
               UV lines           -11.5
               total               24.5

(a) Including the output of UCB Co. Belgium and Eternal Co. Taiwan in
China mainland.

Table 3--Output of UV Coatings (Tons) in 2001 and 2002 from 34
Corporations

UV Products             2001   2002

Wooden and bamboo       7705   8955
Paper                   4527   4462
PVC                     1399   1456
Plastic                  605    908
Automotive               592    380
Electronic appliances     97     50
Metal                    320     80
Others                     1    450
Total                  15245  16741

Table 4--Output of UV Inks (Tons) in 2001 and 2002

UV Inks                        2001  2002

Offset                          261   232
Gravure                          40   114
Surface printing                  4    25
Flexible                          1     1
Silk screen                    1225   625
Metal                           500   790
Anticorrosive                    --   181
Sold mask                       830   930
Letterpress                      58   213
Photoimageable anti corrosive   200   310
Photoimageable sold mask          4    95
Optical disk                    293   450
Total                          3416  3968

Figure 6--Major contributing outputs showing the development of UV
curing in China in the past three years.

                 Output [tons]
          2000   2001   2002

Coatings  9300  15245  16741
Monomers  8000   8879  13862
Inks      1060   3416   3968

Years
Note: Table made from bar graph.

Figure 7--Status of different types of corporations in the market.

Joint-stock    (31%)
Joint-venture  (10%)
State-owned     (6%)
Collective      (6%)
Foreign         (6%)
Private        (41%)

Note: Table made from pie chart.

Table 5--Output Growth of Number of Corporations in 2002 as Compared
With 2001

                                Output (Tons)
Year  Corporation  >=100  100~500  500~1000  1000~2000  >2000

2001      87        60      38        12         5        5
2002      81        67      41         9        11        6

Table 6--Production Values of Corporations in 2002 as Compared with 2001

                      Production Value (Million U.S.$)
Year  Corporations  >=0.1  0.1~0.2  0.2~0.5  0.5~1.0  >1.0

2001      87        39      21         9       6       3
2002      81        49      25        14       6       4

References

(1) Hong, X.Y., "Basic Research of Photopolymer in China," Conf. Proc. RadTech North America 2000, 968, April 28-May 1, Indianapolis, IN, USA, 2002.

(2) Shi, W.F., "How UV/EB Curing in China is Expanding," Coatings Agenda, (Asia-Pacific) 118 (2001).

(3) Xu, J.W. and Shi, W.F., "Progress in Radiation Curing Marketing and Technology," JOURNAL OF COATINGS TECHNOLOGY, 74, No. 928, 67 (2002).

(4) RadTech Newsletter No. 2, 6 (2003).

(5) Lu, Y.Z., "China: Growth for Radiation Curing Fueled by Successful RadTech Asia 2001 at Kumming," Conf. Proc. RadTech North America 2000, 957, April 28-May 1, Indianapolis, IN, USA, 2002.

by Anila Asif, Liu Jianhua and Wenfang Shi, [dagger] University of Science and Technology of China*

*Dept. of Polymer Science and Engineering, Hefei, Anhui 230026, P. R. China.

[dagger]Author to whom correspondence should be sent: Voice: +86.551.3606084 and Fax: [phone]; Email: [e-mail].