Pak­istan paints and coat­ings in­dus­try

Enterprise - - Industry View -

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.

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