Overview of Aerosol Industry

AEROSOL PRODUCTS

  • The aerosol industry is a branch of the fine chemicals industry. An aerosol product is a product that sprays the contents out of the aerosol can and its valve by utilizing the pressure of the propellant to create a mist, paste, powder or foam-like of liquid particles. The aerosol can, the aerosol valve, the contents and the propellant are four components of an aerosol product.
  • The aerosol product market consists of over 2000 kinds of products applied in a variety of economic sectors. The international common classification of aerosol products is based on the field of its application, which can be divided into seven categories, namely, personal care aerosol products, household aerosol products, aerosol insecticides, automotive aerosol products, aerosol paints, food aerosol products and medical aerosol products.
  • The majority of our products are household aerosol products including air fresheners and we also produce some kinds of personal care products, automotive aerosol products and insecticides. Household aerosol products include a variety of air-fresheners and household cleaning products such as window cleaning, stove cleaning and bathroom cleaning products. Air-fresheners and household cleaning products represented the majority of our products during the Track Record Period. Our automotive aerosol products include tire cleaning products, multi-purpose cleaning products and car-seat cleaning products etc. Our aerosol insecticides generated the least revenue for our Group during the Track Record Period. We also produce a few other kinds of personal care aerosol products including hair mousse, hair spray and shaving foam.

THE GLOBAL AEROSOL INDUSTRY

According to the CRI Report, the global production of aerosol products increased from approximately 13.10 billion cans in 2008 to approximately 14.40 billion cans in 2012. During the financial crisis in 2008, the global consumer market suffered a setback and the global production of aerosol products was affected by the market conditions in 2008 and 2009. The market generally recovered in 2010 and maintained rapid growth in the following years. The global annual production of aerosol products is expected to be more than approximately 16.78 billion cans in 2017, representing a CAGR of approximately 3.0% from 2013 to 2017, which is mainly attributable to the rapid development of the PRC and other emerging markets. The following diagram illustrates the global annual production of aerosol products from 2008 to 2012 and the estimated global annual production of aerosol products from 2013 to 2017.

Global Annual Aerosol Production

As indicated in the annual production diagram, the demand for aerosol products maintains a continuous growing trend. The growing demand for the global aerosol products is mainly in North America, Europe and other developed regions. The development of Asia and other emerging countries has also become an important source of demand growth in recent years. The global aerosol market has reached approximately US$67.68 billion in 2012 from approximately US$51.80 billion in 2008, representing a CAGR of approximately 6.9% from 2008 to 2012. The global aerosol market size is expected to grow at a CAGR of approximately 7.3% to reach approximately US$95.98 billion in 2017.

The following diagram illustrates the market size of the global aerosol industry from 2008 to 2012 and the estimated market size of the global aerosol industry from 2013 to 2017.

Global Annual Aerosol Product Market Size

At present, the global aerosol industry is mainly concentrated in Europe, North America and emerging markets such as the PRC, Brazil and Mexico. The continuous development of the PRC economy has promoted the growth of global demand for aerosol products.

According to the CRI Report on the aerosol industry, as indicated by the annual production volume, the demand for aerosol products maintains a growing trend. The demand for aerosol products is concentrated in North America and Europe with an upward trend. The emerging markets in Asia have also become a source which is driving the increase in demand of aerosol products. A large proportion of aerosol products manufacturers in the PRC provide CMS products while they produce OBM products.

The majority our CMS products were exported to North America and Europe market.

  1. THE AEROSOL PRODUCT MARKET IN THE US

4.1 Market Overview

According to the CRI Report, the production of aerosol products in US increased from approximately 3.64 billion cans in 2008 to approximately 3.94 billion cans in 2012. Due to financial crisis in 2008, American consumer market suffered a setback and the production of aerosol products was affected by the market conditions in 2008 and 2009. The market generally recovered in 2010 and maintained high growth in the following years. In 2012, the production of American aerosol products reached approximately 3.94 billion cans, the CAGR has increased approximately 2.4% compared to the year in 2011. The following diagram illustrates the total production of aerosol products in the USA from 2008 to 2012:

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The aerosol product market size in the USA has increased from approximately US$13.36 billion in 2008 to approximately US$17.19 billion in 2012, representing a CAGR of approximately 6.5% from 2008 to 2012. The following diagram illustrates the market size of the USA aerosol industry from 2008 to 2012.

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4.2 Factors for the Demand for Aerosol Products in US

The US is a developed country and its rate of population growth remains high over the years. For a long of period of time, high growth rate of population results in rapid growth in production and consumption. As such, the market size of aerosol products is able to maintain a steady growth.

The US population from 2001 to 2012

According to the CRI Report, the consumption of aerosol products per capita in the US increased from approximately US$43.18 in 2007 to approximately US$54.70 in 2012. The following diagram illustrates a steady growth in the consumption of aerosol products per capita inthe USA from 2007 to 2012:

Per Capita Consumption of Aerosol Products in the USA from 2007 to 2012

4.3 Import from the PRC

The USA is a major export destination for daily chemical products including aerosol products from the PRC. According to the statistics from China Customs, the import value of daily chemical products that include aerosol products imported by the USA from the PRC has increased approximately 63.50% from 2010 to 2012. In 2012, the total value and quantity of daily chemical products that include aerosol products imported by the USA from the PRC amounted to approximately US$82.45 million and 27.05 million kilograms respectively.

The USA’s imports of daily chemical products that includes aerosol products from China from 2010 to 2012

  1. THE AEROSOL PRODUCT MARKET IN EUROPE

5.1 Market Overview

According to the CRI Report, the production of aerosol products in Europe increased from approximately 5.39 billion cans in 2008 to approximately 5.73 billion cans in 2012. During financial crisis in 2008, European consumer market suffered a setback and the production of aerosol products was affected by the market conditions in 2008 and 2009. The market generally recovered in 2010 and maintained growth in the following years. In 2012, the production of European aerosol products reached approximately 5.73 billion cans, with a growth rate of approximately 3.99% compared to the year in 2011. The following diagram illustrates the annual total production of aerosol products in Europe from 2008 to 2012:

Annual Total Production of Aerosol Producing in Europe from 2008 to 2012 Source: CRI Report INDUSTRY OVERVIEW – 62

According to the CRI Report, the aerosol product market size in Europe has increased from approximately US$22.79 billion in 2008 to approximately US$29.51 billion in 2012, representing a CAGR of approximately 6.7%. Although the financial crisis in 2008 and 2009 hindered the growth of aerosol production, the demand for aerosol products kept growing. The following diagram illustrates the aerosol product market size in Europe from 2008 to 2012:

Annual Aerosol Product Market size in Europe from 2008 to 2012

5.2 Factors for the Demand for Aerosol Products in Europe

Overall, the population of Europe has ceased from growth. There is still a gap between income level and consumption per capita among European countries. GDP per capita is still quite low in many eastern European countries where demands of consumption in aerosol products are able to maintain a high growth rate for a long period of time.

According to the CRI Report, the consumption of aerosol products per capita in Europe increased from approximately US$30.62 in 2007 to approximately US$40.98 in 2012. The following diagram illustrates a steady growth in the consumption of aerosol products per capita in Europe from 2007 to 2012:

Per Capita Consumption of Aerosol Products in Europe from 2007 to 2012 Source: CRI Report 5.3 Import

5.3 Import from the PRC

Europe is another major export destination for daily chemical products including aerosol products from the PRC. According to the statistics from China Customs, the import value of daily chemical products that include aerosol products imported by Europe from the PRC has increased approximately 48.1% from 2010 to 2012. In 2012, the total value and quantity of daily chemical products that include aerosol products imported by Europe from the PRC amounted to approximately US$111.22 million and 31.05 million kilograms respectively.

Europe’s imports of daily chemical products that including aerosol products from the PRC from 2010 to 2012

  1. THE AEROSOL PRODUCT MARKET IN AFRICA

The climate in Africa is prone to the breeding of flies, mosquitos and other injurious insects. As a result, people suffer from infectious disease such as malaria, yellow fever and filariasis which are transmitted by injurious insects. According to data from World Health Organisation, more than 200 million people are infected with malaria every year. Insecticide, including aerosol insecticide, is one of the most effective methods to kill flies, mosquitos and other injurious insects. Aerosol insecticide is one of the most effective methods to kill flies, mosquitoes and other injurious insects. According to CRI, there is a potential of huge demand in the aerosol product market in Africa because of the high economic growth rate and rapid population growth rate in Africa.

CRI estimated that the aerosol product sales volume in Africa would reach about approximately 360 million cans by 2013 and approximately 580 million cans by 2017, with a CAGR of approximately 12.66% from 2013 to 2017. The market scale of aerosol product retail in Africa will be approximately US$900 million and is expected to reach approximately US$1.63 billion by 2017, with a CAGR ofapproximately 16% from 2013 to 2017.

Forecast on sales volumes of aerosol product in Africa from 2013 to 2017

  1. THE AEROSOL INDUSTRY IN THE PRC

7.1 Development of the Aerosol Industry in the PRC

The continuous growth of the PRC’s economy leads to the rapid development of the aerosol industry. The CRI Report indicated that, as a result of the increase in consumption, the change of life style and consumption pattern as well as people’s growing knowledge about aerosol products, the aerosol industry has a substantial growth potential. The PRC is expected to be the third largest aerosol-producing region after Europe and the USA with a production the size of approximately 3.15 billion cans in 2017, making the PRC one of the major drivers of the growth in the global aerosol market. Annual aerosol production in the PRC has increased from approximately 1.05 billion cans in 2008 to approximately 1.61 billion cans in 2012, representing a CAGR of approximately 11.63%. The following diagram illustrates the total production of aerosol products in the PRC from 2008 to 2012 and the estimated total production of aerosol product from 2013 to 2017:

 

Annual Aerosol Production in the PRC

According to the CRI Report, as the aerosol products are direct consumer products, the demand of aerosol products has increased rapidly in line with the increase of household disposable income and development of consumer goods market. The CRI Report also stated that the size of the aerosol product market in the PRC increased from approximately RMB20.56 billion in 2008 to approximately RMB35.57 billion in 2012, with a CAGR of approximately 14.7%. According to the CRI Report, the aerosol product market size in the PRC is expected to grow at a CAGR of approximately 19.2% and reach approximately RMB82.89 billion in 2017. The following diagram illustrates the market size of aerosol industry in the PRC from 2008 to 2012 and the estimated market size from 2013 to 2017:

Annual Aerosol Product Market Size in the PRC

7.2 Factors for the demand for Aerosol Products

Firstly, strong economic growth and rapid urbanisation in the PRC has in turn boosted levels of disposable income of households. Rising levels of disposable income in both urban and rural areas allow people to spend more on aerosol products. Furthermore, the increasing trend of urbanisation influence people’s lifestyle, particularly the young generations. More consumers are willing to leverage household aerosol products and personal care aerosol products in order to save their time and energy on housework and personal care. Moreover, home hygiene awareness stimulates the demand and consumption of household aerosol products, aerosol insecticide and automotive aerosol products.

7.3 Export of Aerosol Products in the PRC

The total export quantity and value of aerosol related products of the PRC in 2012 are approximately 186.46 million kilograms and US$699.34 million respectively, with an increase of approximately 1.87% and 12.99% compared with that of 2011. The major categories of aerosol products exported are insecticides and household aerosol products such as air-fresheners and cleaning products. According to the CRI Report, the export of aerosol related products of the PRC is expected to grow steadily as indicated by the export data from the China Customs.

Total Export Quantity and Value of Daily Chemical Products including Aerosol Products in China of 2010, 2011 and 2012