Bangladesh Paint Commerce, Industry of Future Prospect – Shanto

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Bangladesh’s paint industry has been growing at a double-digit rate for the past several years riding on the increasing demand from the construction sector, market players said. With the leadership of BPMA, Bangladesh paint industry is getting a strong position day by day both nationally and internationally. It is the voice of paint industry providing representation in the market place and at government level. This association seeks to advance, encourage and recognize the highest standards of paints by providing members and consumers with up-to-date information on a regular basis and also through their Awards for Excellence which is held annually at AGM.

Market Overview

Prime Bank Ltd. had done a market analysis report which brought out the entire paint industry of Bangladesh where we can see that the current market demand is estimated at Tk 1,000 crore and domestic production capacity Tk 920 crore.

The demand-supply gap, according to the study, is Tk 80 crore. “We believe there is still good prospect for paint industry here. It is growing constantly,” – Sangam Lal, chief financial officer of RAK Group, a UAE-based conglomerate that has been working on setting up a paint factory in Bangladesh.
Tk 50-55 crore factory is likely to go for commercial production by the year-end. Only a few players Berger, Asian, Roxy, Pailac, Aqua and Elite etc are operating in the market with over 90 percent market share where Berger alone holds 48 percent market share, followed by Asian Paints 12 percent, Roxy 10 percent, Pailac and Aqua each 7 percent and Elite Paints 5 percent. Uzala and Navana paints are also in the market, according to the report.

Berger becomes the market leadergrew by 25 percent in 2008 and Asian Paints that entered the market in 2002, whooping 50 percent. The local housing industry, which grew 20 percent, may do well this year, despite internal and external obstacles. Shipbuilding and automobile industries also consumed a good amount of paints, market operators said, without giving a specific percentage. Key products that hold the major market shares are: plastic emulsion, distemper, outer coat (weather proof), synthetic enamel etc.
Plastic emulsion and distemper are close substitute of each other. Emulsion is basically used in high-end residence all over the country and distempers are economy class products having a demand in semi-urban and rural markets. Weather coat is growing very fast and presently hold 20 percent market share.

Future Prospect
There are several reasons for the growth, which include growth in real estate sector, gradual increase in awareness of preservation of houses, widening urbanization, availability of house loans and shift from semi-permanent to permanent housing structure, growth in shipbuilding industry and consistent growth of the economy at around 6 percent for the past five years-TouhidulAlam Khan, executive vice president (corporate banking) of Prime Bank.

“Maintaining quality has helped the company to hold the market leadership. However, believes the market is already crowded and there is little business opportunity for the new entrants. Berger has 50-55 percent market share in Bangladesh,” -Rupali Chowdhury, chief executive of Berger Paints Bangladesh.

RAK groups also hopes to grab the market share because there is a clear gap between the demand and supply. And we’re on the edge of achieving international quality as the government to introduce a mandatory 50ppm on lead in paint by 2015, a more stringent requirement than the internationally used 90ppm. BPMA targets to produce lead-free paints in Bangladesh and from early 2013, seven leading companies have switched to lead free paint production though there are currently no regulations on lead in paint in Bangladesh.

Paint samples recently tested in the country have been found to contain lead concentrations below 30ppm. But BPMA decided that the standard should be 50ppm and international standard to be below 50ppm.

ESDO is working closely with the BPMA to help local SMEs phase out lead from paint, and it has asked the government to provide financial and technical support. But without regulation and while products containing lead remain in the market, it is difficult for manufacturers to make potentially costly changes to their paint manufacturing processes.

In a joint proposal with the BPMA, the NGO, among others, is seeking duty free import of zirconium driers and an import ban on lead driers (lead octoate). There is currently a 5% import duty on zirconium driers.

BPMA is endlessly working to ensure to cultivate healthy and profitable competition among manufacturing members and to provide continuous exchange of technical assistance and services between the suppliers and the manufacturing members for a progressive technology.
It also explores potential business opportunities beneficial to the progress of the industry, and to enhance the economic growth of the country. The leadership of BPMA shall promote the Paint industry’s substantial contributions to with a strict adherence to ethical business practices and legal conduct.

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