Growing the polymer business in China
12 Mar 2003
With an increase in per capita income and greater availability of varied consumer products, the Asia-Pacific region represents a burgeoning market for specialty conditioning polymers used in personal care applications.
Within this region, China accounts for more than 50% of total conditioning polymer consumption and will be the key contributor to growth over the next five to ten years, according to a recently published study by Kline & Company.
'China will exhibit very strong, double-digit growth over the next five years-far higher than any other Asian country or mature markets such as the United States and Western Europe,' says Gillian Morris, industry manager of Kline's Chemicals Practice.
In fact, Kline's study, entitled 'Specialty raw materials for cosmetics and toiletries: A Global Series of Regional Market Analyses', predicts that consumption of these materials in the Asia-Pacific region will equal that of Western Europe by 2005 and exceed it by 2010.
The market for conditioning polymers for personal care applications, including hair care and skin care products, in the United States, Western Europe, and the Asia-Pacific region (excluding Japan) is pegged at around $600 million in 2002. The US market currently accounts for 50% of this total, with Western Europe at around 30% and Asia-Pacific at 20%.
Kline's study segments the conditioning polymers business into three product categories: silicones; polyquaterniums, including cationic guar, and conditioning proteins. Overall, silicones account for around 65% of global conditioning polymer consumption, with polyquaterniums accounting for 25% and conditioning proteins making up the balance.
Part of the challenge for suppliers of conditioning polymers - and marketers of finished products - in taking advantage of the opportunities for growth in China lies in identifying consumer demographics and fashion trends, as well as regional differences in such a large territory.
In the northwestern provinces of China, which are less influenced by Western culture and experience a colder, harsher climate, the market for cosmetics and toiletries has not grown as quickly as in other regions. For example, two-in-one shampoo/conditioners are still popular in the northwest, but the more westernised provinces such as Guangdong prefer straight conditioners. Thus, the original shampoo/conditioner combinations introduced to the Chinese market from companies such as Unilever and Procter & Gamble were not successful.
Investment by foreign companies in manufacturing facilities in China - led by Dow Corning and GE Toshiba - is on the rise, but so is production of raw materials for cosmetics and toiletries by smaller Chinese firms.
More importantly, the number of Chinese companies manufacturing generic equivalents of specialty chemicals supplied by foreign firms is booming. The quality of supply from these local producers has improved dramatically and can no longer be dismissed automatically on the basis of standards or purity when compared with foreign-produced raw materials, according to the study.
