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Monday, 13 July 2020
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Markets & companies, Raw materials market

"Current situation creates opportunities for newcomers"

Tuesday, 16 June 2020

C&G Pigment, a Chinese export marketing company of inorganic pigments, has founded a subsidiary based in Leverkusen, Germany. Managing Director Axel Schneider explains the motivation for this step and talks about the challenges and opportunities for the new player in the market.

Axel Schneider is Managing Director at the German subsidiary of C&G Pigment.

Axel Schneider is Managing Director at the German subsidiary of C&G Pigment.

Why did C&G Pigment decide to establish a subsidiary in Europe?

Axel Schneider: C&G Pigment has been active for almost 30 years as an export marketer for well-known Chinese pigment manufacturers. They worked on almost all continents except for Europe. Last year, the company Zhejiang Huayuan Pigment, manufacturer of iron oxide pigments with the brand name "Hyrox", wanted to start building up sales activities to Europe. This should be done with my support. Since C&G Pigment already markets the pigments of Zhejiang Huayuan in other areas, they decided to become active in Europe and entrusted me with the establishment of the subsidiary. Of course, we offer our entire portfolio: iron oxides, chrome oxide green, titanium dioxide and carbon black pigments.

Why did the company decide to locate in Germany?

Schneider: Germany is quite centrally located in Europe, has a good infrastructure, a well-trained workforce and a solid political base. There may be some countries that are less expensive in costs, but all in all Germany offers a very attractive environment for companies.

What further steps should follow?

Schneider: Our German subsidiary C&G Pigment Europe has now started operations. We are currently in the process of establishing the company as a platform for our European business. This means that we want to set up all the services that the European customer expects from a modern supplier, especially with regard to flexible delivery service through local stocking. In the meantime, we have started to initiate projects with interested customers for the approval of our products.

How do you assess the competitive environment for iron oxide pigments in Europe and in Germany?

Schneider: Without question not an easy one for a newcomer. The world's largest manufacturer is at home in West Germany, and many formulations contain products manufactured using the Laux process. To prevail with pigments produced by the precipitation process, on the other hand, requires staying power and intensive project work. But all in all, we see the European market with its variety of applications and its wealth of variants as a very interesting market whose challenges we want to face with enthusiasm.

What are the current challenges facing manufacturers and suppliers of iron oxide pigments?

Schneider: In addition to the formulation standards already mentioned, there are numerous challenges such as the current corona virus crisis, which has temporarily collapsed demand in some countries. This makes production planning and warehousing difficult. Personal visits to customers are not possible, and technical advice is therefore more difficult, which of course does not apply only to iron oxide suppliers. In addition, there has been uncertainty for years about the fate of the number two European supplier, where customers have hardly complied with the name changes. Every change raises new questions about the future positioning. On the other hand, this opens up opportunities for newcomers like us.

As a Chinese company what challenges do you see in the European market?

Schneider: During the pandemic, the issue of sustainability in dealing with nature seems to have receded into the background at the moment, but it will very soon come back to the fore. Chinese pigment manufacturers are still viewed critically in this regard. However, I must emphasise at this point that our partner Hyrox has completely renovated its plant in Deqing and converted it into a production facility with state-of-the-art purification technologies for water and exhaust air. The entire project took a full three years and was successfully completed in 2018, which I was able to see for myself during various visits.

But where do you see advantages and strengths in this respect?

Schneider: C&G Pigment not only offers many years of experience, the owner Jiming Cai founded the company in 1993, but also a great deal of application expertise. Our products, even if they are produced with different manufacturing processes than those of the market leader, sometimes offer quite interesting technical properties. Here I would like to mention only the low-viscosity yellow types and the bluish black types as examples. These special qualities will allow us to open up niches and perhaps one day lead to new standards. And because we work closely with the R&D laboratories at Hyrox and also with our other partners, we can offer our customers tailor-made solutions. We are therefore entering the European market with great confidence.

The interview was conducted by Damir Gagro

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