Local paint makers fall behind in race

Local entrepreneurs in the paint industry are falling behind in the race against aggressive marketing of foreign brands for lack of technological support and finance.

Though both local and foreign brands offer most types of paints, Bangladesh is still import-dependent for vehicle paints and the import cost is also increasing gradually. Bangladesh imported paint and burnish worth Tk 3,215.22 crore 2020-21 fiscal year while it was Tk 2,821.80 crore in FY 2019-20. The figure was Tk 2,767.68 crore in FY 2018-19, Tk 2,599.92 crore in FY 2017-2018 and Tk 2,152.17 crore in FY 2016-17, according to the National Board of Revenue data.

The paint market of the country is worth approximately more than Tk 5,000 crore while the annual growth rate is 8-10 per cent, said Md Abdur Rahman, vice president of the Bangladesh Paint Manufacturers Association.

According to the Bangladesh Paint Manufacturers Association, currently, nearly 75 per cent of the paint market is dominated by foreign brands, both locally produced by multinationals and imported, and 25 per cent is met by the local brands.

The paint industry is burgeoning for rapid urbanisation and widespread development work across the country and a boom in the real estate sector. More than 5 lakh people are involved directly and indirectly with the paint industry.

There are 41 registered manufacturers including multinational and domestic entities and they have the efficiency to meet the demand of the country, said Md Abdur Rahman.

“Paint is now a necessary lifestyle product which was once considered as a luxury product just a few years ago,” he added.

The annual consumption of paint in Bangladesh now stands at approximately 2,00,000 tonnes while locally manufactured products by multinational and domestic companies meet 90 per cent of the demand, said Rupali Chowdhury, managing director of Berger Paints Bangladesh. “Berger is leading the paint market holding more than 55 per cent market share, ” Rupali said.

Haji Shafique Ullah Khan, managing director Pailac Paint & Chemical Co Ltd, told The Business Post that the local entrepreneurs cannot keep pace with the market competition against the aggressive marketing by foreign brands as well as people’s preference to the foreign product even if the quality of local products remain better.

Imperial Paints Company Chairman Md Nuruzzaman said the local entrepreneurs cannot go for aggressive marketing with attractive promotional because their working capital is very poor compared to the multinational companies and they have done everything for dominating the market.

Arun Mitra, general sectary of the Bangladesh Paint Manufacturers Association, most of the small manufacturers had to stop production after the National Board of Revenue issued a circular imposing some strict conditions for importing a component of paint used as a preservative.

“Earlier, the manufacturers and traders could import the component with a no-objection certificate from the Department of Explosives. Now the revenue board said a NOC from them is also mandatory for importing the component after submitting previous data of their demand, usage and outputs. Small companies used to collect the component from the retail market but the circular now bars selling the component in the open market, “he said.

He said, “Some foreign manufacturers strengthened their foothold in the country as they have everything to manipulate the market but we have nothing compared to them. We need policy support from the government for our survival.”

Mokbul Islam Khan Tipu, managing director of Polac Paint and Chemical Co, said various problems such as shortage of capital, the high price of raw materials are holding back the local entrepreneurs. “It is high time to create room for the local manufacturers. The foreign brands have grabbed the market in a style of Lux beauty soap,” he added.

Berger’s Rupali Chowdhury was unhappy with the direction of the government’s mega projects as the project proposals make it mandatory to import paint which is no better than locally produced paints.

Bangladeshi manufacturers do not produce hardly two or three products that can be imported but other products should not be imported for the sake of the local industry, she added.

Rupali said Berger is also planning to manufacture some vehicle paints which is now totally import-dependent.