The Trade Balance of HPP among these Regions

How is the worldwide “trade flow” for High Performance Pigments?

In order to establish a trade balance we need, in addition to the consumption figures, a “guestimate” of the production volume by regions (Table 9.1).

9.4 The Demand for HPP by Consumer Market Segments 135 Table 9.1 Production site of main HPP producers.

Producers Main pigment classes

BASF Perylene, isoindolines/isoindolinones, quinophthalone, phthalocyanine specialties, anthraquinones

Bayer Quinacridones, dioxazines, perylenes, phthalocyanine specialties Clariant Quinacridones, dioxazines, perylenes, special azos, hp naphthols

Ciba Quinacridones, dioxazines, perylenes, special azos, other polycyclic pigments,

phthalocyanine specialties

DIC/SUN Quinacridones, dioxazines, perylenes, special azos, hp naphthols, phthalocyanine specialties

The major part of these pigment segments are manufactured in Europe,

USA and Japan.

Based on the consumption by regions (Table 9.2), we have:

Europe 6600-6800 tonnes (approximately 35%)

NAFTA 7600-7900 tonnes (approximately 40%)

Asia Pacific 3500-3800 tonnes (approximately 20%)

ROW (Inc. India) 800-1000 tonnes (approximately 5%)

We can now estimate the product volumes in each region, to establish the trade balance. Our best guess about such production volumes is shown in Table 9.2.

Table 9.2 Trade balance of HPPs by regions.

Europe

NAFTA

Asia Pacific (incl. Japan)

ROW

(incl. India)

Production

> 80001

> 80001

< 30001

< 5001

Consumption

6600-68001

7600-79001

3500-3800t

800-1000 t

Trade balance

Net exporter

Slightly net exporter

Net importer

Net importer

These figures clearly show that developing countries like China and India do not yet play an important role as producers. Will this change next year? Will the scenario for textile dyes be repeated? Certainly, it is not easy to predict the future, but the following comments can be made. First of all, it is evident that the main HPP producers are themselves the key as to whether China and India will become increasingly important or not. Four reasons are given for this statement:

1. The capital investment to produce HPPs is significantly higher than that for classical azo pigments and textile dyes.

To fund such investment, local companies (sometimes gov­ernment-controlled) are active in looking for joint ventures with well-known pigment producers.

2. The quality of certain HPPs produced in the two above-men­tioned countries does not yet correspond to global market requirements.

3. The more certain pigment specialties are perceived of as “commodities”, the more the major players will be forced to produce in locations at the cheapest possible price. However, we must also consider that labor costs to produce HPPs are in general not higher than 10% of the total production costs.

Is it worthwhile for the “majors” to risk their current strong positions for a small saving? The “commoditization” of cer­tain products is therefore another driving factor for the pro­duction move to developing countries.

4. The success rate of research and development. The commo­ditization process can of course be delayed if also in the future new and modified HPPs can be successfully launched, because it is more or less certain that such innova­tions will be first produced in well-established plants in Ger­many, Switzerland, USA and Japan.

Ofcourse, there are other factors like

• trade barriers

• availability of raw materials and intermediates

• governmental regulations about ecological and toxicological issues, etc., which also influence a possible change in the trade balance ofHPPs.

In conclusion, taking all possible factors into account, it appears that the devel­oping countries will ultimately become more important for production and con­sumption of HPPs, but that this process will be rather slow.

9.5

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