Home ›› 29 Mar 2023 ›› Front

Akij Bashir eyes growing paint market share

Mehedi Al Amin
29 Mar 2023 00:00:00 | Update: 29 Mar 2023 00:05:48
Akij Bashir eyes growing paint market share

At a time when over 85 per cent of the country’s paint market share is in the hands of multinational companies, Akij Bashir Group, one of the leading local business conglomerates, is going to start paint manufacturing, aiming to capture a share of the growing market in Bangladesh.

Officials of the business group said the work to set up a paint manufacturing plant has already started at Akij Economic Zone in Trishal of Mymensingh.

“No local company is showing interest in increasing its share in the paint market. That is why we are trying to do that by going into manufacturing. Moreover, our business group itself uses a huge amount of paint,” AKM Mohibullah, general manager (sales and marketing) of Akij Bashir Group, told The Business Post.

“The paint market is growing by 7-8 per cent annually. We want to be slow but steady where quality will be the key factor to capture the market. We will fully comply with all the rules and regulations,” he said.

The Bangladesh Paint Manufacturer’s Association (BPMA) says the decorative paint market size is Tk 413 crore. Arun Mitra, general secretary of the association, told The Business Post multinational companies are holding around 85 per cent of the market share while the rest is occupied by local manufacturers.

According to the BPMA, among the major multinational companies, Berger Paints alone holds 54 per cent of the decorative paint market share, followed by Asian Paints (18 per cent), Kansai Nerolac (7 per cent), Nippon (3 per cent), and Jotun (0.8 per cent).

Among local brands, Elite Paint occupies 6 per cent of the market share, followed by Rainbow Paints (4 per cent) and Roxy Paints (1.5 per cent).

The rest is occupied by other multinational and local brands. There are at least 80 paint manufacturers in the country.

Decorative paints account for 80 per cent of the total paint use in Bangladesh while industrial paints make up 10 per cent, marine paints 4.5 per cent, coil coating 3.5 per cent, and auto refinish and others 2 per cent, according to the BPMA.

“We will produce all kinds of paints, with a focus on household, decorative, and industrial paints,” Mohibullah said.

“We are expecting to enter the market within six months,” Shahriar Zaman, marketing manager of Akij Bashir Group, told The Business Post. “Quality, innovation, and variation will be very important to compete with the existing brands.”

Challenges for newcomers

The BPMA says a newcomer in the paint market will inevitably face some challenges.

Explaining further, it said dealers and painters hold about 80 per cent of the influence on the purchase decisions made by customers while less than 20 per cent of the dealers account for 80 per cent of the sales.

The dealers try to do business with the top 2 market leaders due to high demand and brand recognition. On the other hand, most of the big companies put big efforts into maintaining business with the 20 per cent dealers.

Thus, one of the biggest challenges for a new market player is to build business relationships with these dealers, said the association.

It said around 99 per cent of the paint raw materials are imported while the import duty and tax are high. There is also a 5 per cent supplementary duty and a 15 per cent VAT on imports because paint is considered a luxury product in the country.

Besides, a 5 per cent supplementary duty is imposed on local paint manufacturers and suppliers, which increases the retail prices of finished goods. It is hard for local manufacturers to compete with companies selling imported paints because the latter resorts to under-invoicing and unethical practices.