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Kline Analysts: Even in Worst Case, Growth of Chinese Synthetic Latex Polymer Market will Outpace the West

LITTLE FALLS, NJ, January 19, 2007 –

The Chinese market for synthetic latex polymers is expected to grow at a higher rate than in North America and Europe, even in worst-case scenario forecasts for the next 10 years, according to a recently published study by Kline & Company.

Over the past decade, demand for these materials in China has expanded at a rate of more than 15% a year, well ahead of the mature markets in Europe and North America. Though this growth may slow slightly as the overall market consolidates, manufacturers can expect demand to rise by around 9%, according to the pessimistic-case scenario forecast presented in GLOBAL BUSINESS OPPORTUNITIES IN SYNTHETIC LATEX POLYMERS, 2006-2017, Volume I: China.

“While China accounts for only 11% of the global market, its rapid economic growth has put it ahead of Japan in terms of SLP consumption in just 10 years,” says Gillian Morris, industry manager of the Chemicals and Materials practice for Kline’s research division. “The outlook remains very promising for the near term, and there’s a wealth of opportunities for companies looking to capitalize on China’s steady development.”

Styrene butadiene (SBR) and styrene acrylics represent two of the most attractive segments of the market. SBR should see double-digit growth, with the possibility to exceed 25% per year, according to Kline’s best-case scenario forecast. The projections for SBR in China are linked to the manufacture of paper and paperboard products, the leading consuming markets for SBR latex polymers. Kline’s analysts see a solid, expanding base of Chinese paper production and consumption, with the possibility for much higher growth than any of the other latex polymer segments.

Styrene acrylics are also expected to grow at double-digit rates during the next decade, exceeding 13% annually in the probable and best-case scenario forecasts. Paints and coatings are the primary end uses for styrene acrylics. Though the expected growth range for styrene acrylics is smaller than that of SBR, the supplier base is more fragmented and offers more opportunities for market entry and expansion. BASF, Sunde BATF Industry, Eternal Chemical, National Starch, and Rohm and Haas are the five largest suppliers of styrene acrylics, but they make up only 35% of the market segment. In contrast, BASF, Ciba, Dow, LG YX, and Runyang Adhesive account for 65% of SBR supply in China.

Even in the more consolidated segments, China’s market remains more attractive than Western Europe, where four companies account for 85% of SBR sales and five companies account for 67% of styrene acrylic sales, Kline’s study shows. Still, regional and local features require careful study for any company interested in competing for market share.

“If we look at the overall market, there are multinationals that are currently performing well with good strategies in place, and there are others that aren’t present but are most likely developing entry strategies,” says Eric Vogelsberg, senior vice president and head of Kline’s Chemicals and Materials consulting practice. “Knowing where and how to establish a foothold is crucial to gaining an advantage in this growing market before it reaches maturity.”

GLOBAL BUSINESS OPPORTUNITIES IN SYNTHETIC LATEX POLYMERS, 2006-2017, Volume I: China is part of a global series of regional analyses examining current and forecast demand by major product and end-use industry, including information on grades, prices, applications, major consumers, distribution channels, supplier sales, and technology and market trends. Other volumes in the series will explore India, North America, and Western Europe.

For more information on the study series, go to www.klinegroup.com/reports/Y612.asp or contact Gillian Morris at +1-630-781-9587. In Europe, contact Erin Durham at +39-0331-976969.

For information on Kline’s customized consulting capabilities for the specialty and fine chemicals industry, contact Eric Vogelsberg at +1-973-435-3466.

Established in 1959, Kline & Company (www.klinegroup.com) is an international management consulting and market research firm serving the specialty chemicals, consumer products, life sciences, and energy industries.

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