History of the development and market analysis of aluminum-silver pastes in our country

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Yang Xianghong, Purchasing Director for AkzoNobel Industrial Coatings in China. The development history of aluminum-silver pastes in China: These pastes are mainly produced in the United States, Germany, Japan, the United Kingdom, and China. The industry related to aluminum-silver pastes began in China in 1995, with the German company ECKART being the first to enter the market; subsequently, TOYO and SILBERLINE also entered the Chinese market. The aluminum-silver pastes from these companies, representing German, American, and Japanese manufacturing standards, have distinct characteristics – some of these products are suitable for use in intermediate coats for automotive paints, while others are more refined and suitable for use in plastic coatings. Currently, the demand for high-end aluminum-silver paste in the domestic market is 15,000 tons, of which about 2,500 tons are imported from abroad. The mid-to-low-end aluminum-silver paste market is largely dominated by domestic manufacturers, especially in the case of low-end aluminum-silver paste. In the high-end aluminum-silver paste market, there is a significant gap between Chinese companies and foreign firms. With the development of the market, the quality and stability of domestic aluminum-silver paste products have continued to improve, which has led to a gradual decline in sales volumes in the Chinese market for some previously well-known manufacturers such as ECKART, SCHLENK, SILBERLINE, TOYO, etc. The prices of their mainstream products in the Chinese market have also been forced to decrease year by year. China’s aluminum-silver paste production industry began in the early 1990s, and its production history is relatively short compared to that of foreign companies. Companies that started operations early include Zhangqiu Metal Pigments Co., Ltd. (hereinafter referred to as Zhangqiu), Jinan Yasida Chemical Technology Development Co., Ltd. (hereinafter referred to as Yasida), Danyang Guangyang Aluminum Silver Powder Factory (hereinafter referred to as Guangyang), and Shenzhen Zuxing Industrial Co., Ltd. (hereinafter referred to as Zuxing), among others. They all started by copying Aika’s aluminum-silver paste formula. Later, as Zuxing made breakthroughs in its replication technology, some skilled workers left Zuxing; many manufacturers of aluminum-silver paste were established using Zuxing’s technology, such as Shanghai Shanjing Aluminum Industry Development Co., Ltd. (hereinafter referred to as Shanjing) and Dongliang Aluminum Industry Co., Ltd. (hereinafter referred to as Dongliang). After several years of development, these companies have gradually grown and expanded, resulting in a situation where each now has its own distinctive products. At present, Zhangqiu has a relatively large production capacity, with an annual output of around 8,000 tons (including the production capacity for floating products) ； Zuxing’s annual production capacity can reach 3,000 tons ； Yasida and Tōryō have an annual production capacity of around 2,000 tons each, while the production capacity of other manufacturers is relatively smaller. Next, we will conduct a comprehensive analysis of the status of the major domestic manufacturers of aluminum-silver pastes, considering aspects such as their product performance, stability, sales, as well as production and R&D capabilities. Performance characteristics of the products from major domestic manufacturers of aluminum-silver pastes: Overall performance of major domestic aluminum-silver paste products. ◆ Zhangqiu has the most comprehensive range of product lines among domestic manufacturers of aluminum-silver pastes; its products include both floating and non-floating types, ranging from ordinary aluminum-silver paste series, electroplating-like aluminum-silver paste series, to aluminum pigments designed for plastics, as well as water-based aluminum-silver paste series (set to go into production soon) and electroplated silver-aluminum-silver paste series (also set to go into production soon). It offers products of all high, medium, and low quality levels (only the resin-coated aluminum-silver paste series is not available). Its products are mostly low-end, with an increase in mid-to-high-end products recently. The product has a strong metallic appearance, and it exhibits excellent chemical and mechanical resistance. In particular, its heat resistance is outstanding, making it highly suitable for metal finishing coatings such as fluorocarbon paints. ◆Yasida has a relatively complete range of non-floating product lines. The flash silver product series offers a good appearance in terms of coating quality; the coarse flash silver with a particle size of 12–30 μm is considered by Yaisada’s sales staff to be the best product. Furthermore, Yisida’s products have a relatively uniform particle size distribution and good batch stability, which are also major advantages of its products. Many of IASIDA’s products have performed well in the fields of plastic paint and original automotive paints ； They have also developed mid-to-high-end aluminum-silver pastes for fluorocarbon paints. ◆Certain non-floating products manufactured by Dongliang, especially those with an electroplated silver finish (with particle sizes of 10–30 u), can even rival the products of internationally renowned manufacturers, and its production process also features unique aspects. ◆Zuxing has one of the most comprehensive product lines among domestic manufacturers of aluminum-silver pastes. Its products range from ordinary aluminum-silver paste series, electroplating-imitation aluminum-silver paste series, to coated aluminum-silver paste series, aluminum pigments designed for plastics, water-based aluminum-silver paste series (set to go into production soon), and electroplated silver-aluminum-silver paste series (also set to go into production soon). It offers a full range of products at high, medium, and low price points. The aforementioned four major manufacturers are not particularly outstanding in fine silver products. Xuyang Aluminum Pigments Co., Ltd. adds certain materials to its aluminum-silver pastes, and the fine silver pigments it produces exhibit excellent performance in terms of whiteness, fineness, and coverage. Overall, domestic manufacturers of aluminum-silver pastes are making continuous technological progress; with a few exceptions, the vast majority of aluminum-silver paste varieties can be produced commercially in China. The stability of aluminum-silver paste products is another very important indicator for assessing the quality of these products. Ensuring the stability of aluminum pigments, especially their stability during storage, has always been one of the biggest challenges for manufacturers of metal pigments. Overall, the stability of domestic aluminum-silver paste products (in terms of storage stability) is still not on par with that of products from internationally renowned companies, but it is getting closer rapidly. Since Yisida established its company with a focus on standardized systems and management from the beginning, its products also enjoy good quality control, and their stability is highly regarded in the domestic market. In fact, there are many ways to improve and maintain product stability: ◆ Strictly control the production process. ◆Unlike fixed procurement channels, by purchasing raw materials in large quantities at once, the impact of variations in raw materials on product stability is reduced. ◆A method of producing large quantities of products in a single batch (with batch sizes of up to over one ton) is adopted, along with increasing inventory levels of finished products to ensure a stable supply of products to users. ◆Use a solvent with better stability. ◆Special treatment is applied to the finished products before they leave the factory to enhance their stability. Quality management and control: Most of the aluminum-silver paste manufacturers I have come into contact with have obtained ISO9001 certification. However, the author only saw the most standardized and comprehensive management and quality control system at IELDA: there are multiple quality inspection stages, from the testing of materials upon arrival at the factory to the inspection of finished products before they leave the factory. In terms of R&D capabilities among the major domestic manufacturers of aluminum-silver pastes, such capabilities are assessed based on a company’s ability to continuously develop existing products as well as its capacity to develop new products. Since the R&D activities of companies are kept strictly confidential, we can only analyze based on factors such as product stability and alternative products required by clients. At present, companies mainly focus on imitating products from internationally renowned firms such as SILBERLINE, ECKART, and TOYO, making certain modifications according to the specific requirements of each client. In terms of the development of new products, small companies are more proactive and ambitious, whereas large companies do not show a clear distinction between their old and new products, which results in a large number of products that are not of high quality. In China, only Yisa Da, Zuxing, and Zhangqiu rely on independent research and development; they have their own professional R&D teams. Most other manufacturers focus on improving their technologies by recruiting talent from elsewhere. Among the many aluminum-silver paste manufacturers in China, those that have a well-developed capacity for producing such paste are Yasida and Zuxing; Zhangqiu is currently building a large-scale R&D center for aluminum-silver paste. Of course, domestic companies also have incomparable advantages: since many coatings are used in consumer products such as phone casings, different customers have varying requirements regarding the color of the coatings provided by manufacturers – for the same silver color, some customers prefer it to be lighter and whiter, while others prefer it to be brighter. Often, standard products cannot be used, but domestic companies can make \"minor adjustments\" in a very short time. For foreign companies, this is an almost impossible task, especially in a short period of time. Even if they are willing to customize it for you, they require a commitment from the customer in terms of quantity, and it takes a considerable amount of time. This is one of the reasons why large international companies are “losing business” in China. This is the key to survival for domestic enterprises, especially small ones. Meanwhile, large domestic aluminum-silver paste manufacturers need to improve in terms of customization, new product development, and staying closer to their customers. Analysis of the sales strategies of major aluminum-silver paste manufacturers: There are significant differences between the sales models of domestic aluminum-silver paste companies and those of international giants. Sales models of domestic enterprises: A certain aluminum-silver paste manufacturer in Shandong performs well in the local market, accounting for a large share of its total sales volume. Its sales network also covers most of the regions across the country where there is high demand for aluminum-silver pastes. Its overseas sales network has been established successfully as well; to date, it is the company that has achieved the best results in overseas sales. The company’s sales network is relatively well-organized, but its overall operational flexibility is lacking, and costs are high. Their sales network in the domestic market relies on their own sales teams in the Shandong region; however, sales in other areas are carried out through agents. This significantly increases the cost of selling their products, putting them at a disadvantage in terms of price competitiveness. Moreover, there are too many steps in the sales process, which clearly hinders timeliness and effectiveness in aspects such as information communication, feedback, resolving product issues, and after-sales service. “In just a few years since they began producing aluminum-silver pastes, domestic manufacturers have made significant progress; in the mid-to-low-end product market, they have managed to seize a large share of market volume from well-known foreign companies. It is precisely the development of China’s aluminum-silver paste industry that is driving down the global prices of such products. ” The company’s domestic sales model – namely, selling primarily through agents – results in its products having the highest prices among similar products of the same quality available on the market. This is one of the main reasons why it has limited competitiveness among domestic small and medium-sized customers. At the same time, some traders sell products from other manufacturers under their brand name, which to some extent damages the reputation of that company’s products. Another aluminum-silver paste manufacturer in Shandong has a distinctive sales approach. For certain large customers, they sell their products on a pay-after-use basis, and this sales method is quite attractive to some users. A certain aluminum-silver paste manufacturer in South China once established its own independent sales network, with over 30 sales offices across the country, located in various major aluminum-silver paste markets along the coast as well as in the interior areas. They are at the forefront of the domestic industry in terms of timely supply, visiting customers directly to understand their needs, problem-solving, and after-sales service ； However, in recent years its distribution model has changed significantly, shifting to a dealer-focused approach; other factors such as the lack of distinct product characteristics and issues with quality consistency have also hindered its development. The sales models of international large companies in China: A well-known Japanese company that produces aluminum silver paste once managed to \"monopolize\" the Southeast Asian market, including China, thanks to the excellent performance of its products and their high stability. However, due to inaccurate assessments of market trends in previous years, it delayed increasing its production capacity; as a result of product shortages, many customers turned to other suppliers. At present, the company focuses on serving Japanese companies, and adopts a secondary distribution model for other clients: two Japanese trading companies handle the overall distribution, which is then brought to the market in China through numerous distributors. Another well-known American company specializing in aluminum-silver pastes was able to expand rapidly in Asia by taking advantage of the slower production capacity of those Japanese companies; it became famous in China and Southeast Asia, with a renowned coating company spending millions of dollars on purchases from them each year. Due to internal management issues and problems with distribution channels within the company, its market share declined rapidly, especially in the Chinese market. In recent years, they have tried to \"return to the market\" by frequently changing the managers in China and their distribution channels, but it seems they are becoming less and less professional, with their performance continuing to decline. There are also international companies that truly take the market seriously, such as certain European firms: their sales staff are dedicated and know how to serve customers. By \"merging\" with a large-scale additive manufacturer, this company has **enhanced its understanding of downstream applications; with the support of this large additive producer, it now has a solid foundation for developing new products** ； With a professional team and substantial financial investment from the company, they have been introducing world-leading products in recent years. What are the shortcomings of domestic enterprises? By examining in depth the current situation of these enterprises, it can be seen that they have deficiencies in areas such as research and development, raw material selection, production process control, after-sales service, and technical support. ◆Domestic companies tend to focus on the production and sales of aluminum-silver pastes. There are very few dedicated teams that study the market, competitors, and especially downstream applications. Most aluminum-silver paste manufacturers have virtually no knowledge of the specific application scenarios of their downstream customers. The author has not yet seen a fully equipped product application laboratory at any aluminum-silver paste manufacturer in China. ◆This industry is essentially in a “semi-enclosed” state, with no communication between different companies; some large firms divide their technical staff into separate groups, with each person responsible only for a specific part of the work ； They rarely rely on research institutions to systematically develop new products. ◆Regarding raw material selection: Among large-scale aluminum-silver paste manufacturers, the author has seen only Zhangqiu start with spray-aluminum powder produced in-house, while other manufacturers purchase their spray-aluminum powder from external suppliers. Large foreign aluminum-silver paste manufacturers produce spray aluminum powder in-house. The quality of purchased spray aluminum powder is difficult to control, and no matter how strict the subsequent processing steps are, it remains a problem at the source. ◆Since aluminum-silver paste is a functional coloring pigment, whether the aluminum flakes can fulfill their role in the coating depends greatly on whether the solvent system used in the aluminum-silver paste is compatible with the resin and solvent systems present in the coating. Aluminum is an amphoteric metal, and the acid value of ordinary paints should be kept below 7. Furthermore, the resin systems used in ship paints/anticorrosion paints, automotive paints, plastic paints, and wood coatings are quite different. There are epoxy resins, polyesters, alkyd resins, acrylic resins, nitrocellulose, etc., and their corresponding solvent systems vary greatly. If domestic aluminum-silver paste manufacturers are unaware of this and insist on using a fixed solvent system, the actual performance in practical applications will not be very good. ◆In terms of production process control: Domestic enterprises mainly rely on extensive manual control. Based on the production processes observed in various factories to date, it is hard to believe that such methods can enable precise control over the thickness-to-diameter ratio and particle size distribution of aluminum sheets. ◆Furthermore, the lack of adequate research on the fatty acids and various additives used in the production of aluminum-silver pastes has also led to poor development of high-quality aluminum-silver pastes. ◆Compared to imported ones, domestic aluminum-silver pastes are not as “white” or “pure,” and their shelf life is shorter. ◆After-sales service and technical support: Domestic companies fall short in this area, essentially adopting a approach of providing minimal after-sales support. Having dedicated personnel for technical support and after-sales service will bring them closer to the customers. ◆Other aspects: Some domestic companies such as Zhangqiu and Zuxing have a certain history of operating in this industry. Over the years, both of these companies have been dedicated to the production and research of aluminum pigments, treating the development of aluminum-silver pastes as a genuine business endeavor rather than merely a means to generate profits. Its founders are still working diligently in this industry; the ownership of the two companies is highly concentrated, and there are no signs that they intend to move into other industries in the future. Another company also regards the production and research and development of aluminum-silver pastes as part of its business, but its complex ownership structure results in a serious lack of enthusiasm among its founders, especially when it comes to the development of new products. Other manufacturers of aluminum-silver pastes seem to be less committed to its production compared to the companies mentioned above; for example, some owners are more successful in the clothing industry than in producing aluminum-silver pastes, while others are primarily involved in retail. Compared with foreign manufacturers of aluminum-silver pastes, domestic companies have a shorter history of development, and the research on some products is not yet thorough enough. Although the quality of certain products has reached foreign standards, there are still differences in terms of equipment as well as experience and methods for quality control. The quality of domestically produced aluminum pastes has achieved good results in ordinary fine silver applications, but there is still a gap compared to imported products when it comes to products with high flash points ； There is still a large gap in areas such as aqueous, encapsulated, and electroplated aluminum-silver pastes. In the past two to three years, China’s aluminum-silver paste products have also begun to develop in the direction of using fine spherical aluminum powder as raw material. Significant technological advancements have been made domestically, but the performance metrics and coating quality of these products still fall short of those of similar foreign products. In just a few years since they began producing aluminum-silver pastes, domestic manufacturers have made significant progress; in the mid-to-low-end product market, they have managed to seize a large share of market volume from well-known foreign companies. However, it still has to be noted that domestic manufacturers of aluminum-silver pastes are at a relatively disadvantageous position in terms of specialty products and the high-end market. Foreign companies led by ECKART are aware of the pressure from domestic firms, and are establishing product application centers and even factories in China; more intense market competition is set to unfold in China and around the world. Development trends of aluminum-silver pastes in China: The development direction of domestic aluminum-silver paste manufacturers is reflected in two main aspects, namely the improvement of existing products and the use of new solvent systems that are less toxic or even non-toxic. Improvements to existing products: ◆ Efforts are being made to improve the storage stability of aluminum-silver paste products. ◆Improvements have been made in terms of the whiteness of fine silver and the brightness of high-shine silver. Strive to make the product cleaner. ◆Strive to improve the manufacturing process and enhance the stability of products across batches. ◆Efforts are being made to improve the acid resistance, heat resistance, and weather resistance of aluminum-silver pastes. The new solvent system features low toxicity and non-toxicity: Currently, many aluminum-silver paste manufacturers use No. 200 solvent oil for grinding, and high-boiling-point tri- and tetramethyltoluene as the final solvent for aluminum-silver paste. The aromatics contained in these solvents, especially the polycyclic aromatic hydrocarbons present in high-boiling tri- and tetramethylenetoluenes, are harmful to human health; the EU has enacted laws to ban their use. Aluminum silver paste is mainly used in phone coatings, toy coatings, and computers. In Europe, there is an increasing demand that such coatings contain no aromatic compounds, especially polycyclic aromatic hydrocarbons. Some aluminum-silver paste manufacturers have begun using high-boiling-point dearomatic solvents such as D60, D70, and D80. These essentially aliphatic solvents have an aromatic content of less than 150PPM and contain no polycyclic aromatics. However, the storage stability of the aluminum-silver paste produced in this way, as well as its compatibility with coatings, still needs improvement. Adding an appropriate proportion of active solvent is expected to improve phase compatibility and other properties. ◆Make vigorous efforts to develop resin-coated types as well as electroplated aluminum and silver pastes. ◆Smoother and higher-brightness aluminum sheets are selected to produce brighter and whiter aluminum silver paste. ◆Make significant efforts in the research and development of water-based aluminum-silver pastes – this is the direction for the development of such pastes. ◆Of course, major manufacturers are also working on the development of colored electroplated aluminum-silver pastes.