Pakistan paints and coatings industry
The paint industry was one of the first to be established in Pakistan. Over the years, it has made many advances and there are a number of state- of- the- art paint factories currently operating in the country. These employ new technologies and modern processes in the manufacture of various categories of paints such as defence, industrial, decorative and building paints plus automotive finishes and special paints for roads and airports. Pakistan is self- sufficient in paint manufacturing with earnings from export of paints and allied products increasing annually.
According to a report, 30 million litres of paint are produced in Pakistan every year and the industry is growing at an average rate of 6% while there are 540 million potential customers that manufacturers can cater to annually.
Over the years, a number of major companies have emerged. One of them is ICI Dulux Paints, now owned by AkzoNobel Pakistan. ICI manufactures paints in three categories: decorative, industrial and automotive. The company also launched a colour studio in Karachi which was quite successful and a second one was opened in Islamabad.
There is Berger Paints that started operations in 1950 and is one of the world’s best- known brands. Berger established its first local manufacturing facility in Karachi in 1955 and today operates from a modern factory in Lahore. Berger has a 20 per cent share in the household segment and remains ICI’s major competitor. Buxly Paints started operations in this region
in 1933 and set up a plant in Pakistan after partition. Kansai Paints is another company that has made a name for itself in the local market. With its head office in Lahore, Kansai is a major supplier of paints to the automobile industry, catering to such brands as Toyota, Suzuki, Nissan, Honda, Hino, Sigma, Hyundai, Yamaha and Baluchistan Wheels. In 2009, Kansai launched a line of decorative paints and offers a wide range of products that include emulsions for interiors and exteriors, enamels, predeco products, wood finish and texture paints. Master Paints came on the scene in 1976 and is fast building its position as a leading paint manufacturer in Pakistan.
Other companies include Happilac Paints established in 1978 with a product line comprising both decorative and industrial paints, Nelson Paints that mainly focuses on decorative paints with a colour advisory service to give suggestions to consumers pertaining to colour schemes, estimates and surface preparation, and Nippon Paints ( with its headquarters in Japan) that started operations in 2007, offering a wide range of deco paints and a ‘ green’ environment- friendly paint product which is probably the first of its kind in Pakistan.
As per a survey, the entire market for decorative paints is 210 million litres and can be further divided into the organised and unorganised sectors. The first is the market that purchases decorative paints from paint manufacturers and has a volume of 73 million litres. The unorganised market, on the other hand, consists of paint substitutes used for decoration and has a volume of 137 million litres.
There are around 22 paint producing units in the organised sector, which is represented by the Pakistan Paint Manufacturers Association ( PPMA) while over 350 units are functioning in the unorganised sector. The latter has an edge because it is not covered by the excise and taxation net unlike the organised sector and yet serves as a fierce competitor in the local market.
The decorative market is sub- divided into interior and exterior categories. The first, as is obvious from the name, is used for indoor coatings while the latter is for the outdoors. The exterior paints market in Pakistan is 7 million litres, with ICI as the market leader, mainly because of its product Weathershield ( providing
around 4.2 million litres). In fact, weather- resistant paint is a major breakthrough as far as the industry is concerned. It is particularly useful in cities like Karachi where people living on the seafront are constantly struggling with maintenance issues caused by the salty sea breeze that creates relentless wear and tear. It is in this category that ICI dominates the market. Weathershield is even claimed to work as a dust repellent. Its price is five per cent higher than that of Berger’s Weathercoat.
ICI also offers a diverse range of bright and unique colours for exterior coatings. It also offers other options such as matt emulsion ( which, although expensive, is scrubresistant and makes for easy maintenance). Odourless and perfumed paints, environmentfriendly products, quick drying emulsions and textured paints also exist in the market, which leaves the consumer spoilt for choice.
It is hardly surprising that several manufacturers in the country have teamed up with foreign companies in a bid to outdo their competitors. Such collaborations lead to the development of groundbreaking products for the local market and also help set certain international standards that ensure that quality standards are maintained. Consider, for example, Berger’s technical arrangement with some of the leading paint manufacturers in Japan and Malaysia for its decorative paints category. Similarly, Nippon Paint, as mentioned earlier, is a Japanese company that made its way into Pakistan in 2007, and applies the same cutting- edge technology that is being used internationally.
Pakistan’s unique geostrategic location enables it to capture Central Asian and Middle Eastern paint markets. The aftermath of the war in Afghanistan has resulted in massive reconstruction and has turned out to be the ‘ perfect’ market for Pakistani paint exports – around 90 per cent of Afghanistan’s paint requirements are being met from Pakistan. What’s more, the Central Asian states have a good road network which makes trade with these countries a lot easier. However, given the volatile political climate of the country coupled with the worldwide economic recession, the market share for the industry has dropped by 10 per cent. This is made worse by policies introduced by governments in the past which have resulted in an increase in the general sales tax to 16 per cent. Also, the existing duty structure in the country is complicated and can be as high as 25 per cent in some cases.
The PPMA, on several occasions, has proposed that the overall duty levied on the industry ( with regard to the raw materials imported) should not be more than five per cent because there is huge demand for Pakistani- manufactured paints in the international market – owing to the high quality control standards practiced in the sector. The downturn in manufacturing volumes, coupled with Pakistan’s energy crisis and rising political instability, can prove to be detrimental to the growth of the sector.
The Pakistani paint industry has come a long way from the days when paints were considered a luxury item. Today, consumers are willing to experiment with the overall look and feel of their homes. They want to spend time, effort and resources to ensure that their houses appear presentable and maintain them on a regular basis. Pakistan also remains an ideal choice for the import of paints for the Middle Eastern and Central Asian countries, because of its location ( and reduced transportation costs) and the growth spurt in the construction sector in various war- torn regions. In light of such developments, it is hoped that the concerned authorities will provide relief, perhaps in the form of subsidies, to the manufacturers and lend support so that training institutes are set up and technical knowledge is imparted to further improve the quality of the existing products in the paints and coatings category.
The Pakistan paints industry must also start preparing itself to meet new manufacturing standards in order to offer local customers the best quality products. For instance, the air pollution factor is fast becoming a driving force behind the adoption of new coating technologies being applied to the manufacture of paints overall as well as to waterborne and high- solids coatings, powders and two- component paint products.
Berger factory in Lahore.