The enormous local paint market is dominated by foreign brands because local firms fail to gain market share due to lack of technological support and access to affordable financing, industry people said.
With the growth in the economy that has resulted in rapid urbanization and a surge in spending capacity, the middle class to the rich and super rich, often opt for high quality paint materials of various foreign companies.
Besides the traditional needs for interior and exterior paints for homes and offices, the paint market has expanded its footprint to the industrial and textile sectors in recent years.
A recent study of LankaBangla Investment Ltd reveals that above 80% of the country’s paint market is in the hands of foreign brands. They include Berger, Asian, Roxy, Pailac, Aqua, and Elite.
Berger alone holds 52% market share, followed by Asian Paints 18%, Roxy 7%, Elite 7%, Pailac 5%, and Aqua paints 2%, the study elaborated.
Local paint companies, now around 30, have less than 20% market share, the study said.
The Pran-RFL group has recently launched paints in the market under the brand name of Rainbow Paints. Other local brands include RAK, Uzala, Nippon, and Jotun Paints.
According to Bangladesh Paint Manufacturers’ Association (BPMA) estimates, the yearly domestic paint market is around Tk3,000 crore. The BPMA said local brands cannot compete with foreign brands.
“Local paint companies lack research & development facilities to produce good quality paint products. Besides, lack of low-cost capital funding also hinders prospects for local paint companies,” BPMA general secretary Md. Shamsuzzaman told the Dhaka Tribune.
He said many consumers also think the quality of foreign paints is better than that of local paints, which is not always true as both local and foreign firms produce paint from the same raw materials.
Owners and industrialists involved in the paint business said growth in the real estate sector played a vital role in expanding the paint market of the local economy. Further, home renovation, low-cost home loans, and the expansion of industries are other reasons for the booming paint industry.
They said around four to five local paint companies closed down in the last few years due to financial constraints, thus failing to compete with foreign brands.
BPMA organizing secretary Asaduzzaman Shahid Khan said, “The use of paint has proved to be useful to flat and home owners as it increases the lifespan of buildings.
“Industrialists are now aware that paints prevent rust from damaging iron bars. With the pace of infrastructure development, the use of industrial paints is also increasing day by day in both medium and large industries,” Shahid Khan said.
The BPMA leaders said the government should put some sort of restrictions on the entry of foreign companies in the local paint market.
Local owners of paint companies said the sector now employs nearly 20,000 people. They said, without policy and fiscal support from the government, the local paint industry would perish, let alone grow.
The enormous demand for paints used in ships, private cars, and furniture, is now fully met by foreign brands, industry experts said.
Key products of paint companies include plastic emulsion, distemper, outer coat (weather proof) and synthetic enamel.
Managing director of Berger Paints Bangladesh, Rupali Chowdhury, told the Dhaka Tribune, “Berger is the leading paint maker in Bangladesh. Maintaining quality has helped the company to hold market leadership. It has two production units each in Dhaka and Chittagong, and has 11 home decor outlets in the country. It employs 1,000 people and has a countrywide distribution network of more than 3,000 dealers.”
Berger Paints Bangladesh, an 'A' category company, listed with the stock exchanges in 2006. The company's sponsor-directors hold 95% shares, institutions 1.85%, foreign shareholders 1.55%, and the general public 1.60%, as of September 30, 2018.
