How to get better coating additives without losing profit
Why is balancing the performance of formulations, quality of coating additives and profit margins so challenging?
Our technical teams have been working with industry players across the region for decades. The issue they hear the most is “We want to improve the quality of our products, but our margins are not leaving us any room to move.”
This is a wide-spread issue that most coating and ink companies face at some point. With markets becoming increasingly competitive and trends moving fast, it becomes harder and harder for coating and ink manufacturers to find the right balance between two difficult spots:
- The product quality is sufficient, but the high costs of additives create a situation, where there is little room to compete in the market. Customers are left to choose between low margins or high costs – losing in both ways.
- Inferior additives are used to cut costs, which sooner or later turns into quality issues. Dissatisfied customers and complaints from end-users create a high-risk environment for producers.
We’d like to take a look at a new approach to additives and this seemingly difficult balance of quality and costs.
How can we improve and replace insufficient coating additives and improve profits at the same time?
At some point most manufacturers decide to replace their additives. As mentioned, this happens either because they are dissatisfied with the performance, or because they can’t compete in the changed market environment. What happens next poses the second-tier challenge to this issue:
Who should they work with to improve and replace their current additives?
- Big industry players have proven quality available – but it comes at a high cost. Going with a high-quality proven solution like this will further increases the pressure on margins.
- Lesser-known industry players can provide attractive prices, but often lack references. Without the right testing infrastructure such replacements can cause massive quality issues at later stages.
Manufacturers shouln’t have to choose between quality and profits – but it seems that their options are often limited.
Solving this challenge was one of the main drivers for our Coating & Resin team, when they decided to launch JebChem. We believe it is possible to use great additives, with proven quality – and to make a decent profit at the same time. So how do we do it?
During the development of JebChem, our team discussed the main requirements to improve and replace coating additives in client formulations. They identified three main components to successully overcome this challenge:
A solid network of technology partners
Having the right connections and experience in working with leading coating technology providers and innovators was a must. At the same time, a deep knowledge of the industry, and trusting relationships with lesser known, but reliable technology partners was necessary.
A world-class testing environment
Any products and claims must be thoroughly proven in a multitude of tests, using only state-of-the-art equipment and testing practices. This would require a major investment into testing infrastructure, as well as highly skilled and experienced laboratory personnel.
It was quickly clear that only a wide range of additive suppliers would provide our team with the right tools to offer relevant replacement solutions to clients. JebChem would have to find the right mixture of additives, combined with the technical knowledge on how to best put them to use in formulations.
Relying on more than 50 years of experience in Asia’s coating industries and trusting relationships with key industry players for decades, the team carefully selected suppliers from over 10 countries who proved to be the right fit for JebChem.
Furthermore, a highly skilled technical team with deep industry roots was hired to exclusively focus on future JebChem projects.
Last but not least Jebsen & Jessen Ingredients invested heavily into a Regional Coating Innovation Center, with more than 400 m2 of state-of-the-art laboratory space in Thailand. If you haven’t had the chance, take a quick virtual tour through the center.
What are the benefits for coating manufacturers in Asia?
Throughout the last years, since the launch of JebChem and the Regional Coating Innovation Center, our team has completed hundreds of projects. Many of them have been to improve and replace coating additives in existing formulations, allowing us to test our solutions and ensure that we are on the right track. The end-results for our clients were always better products and better profits.