High cost of energy, inputs hurting paint makers
Paint makers say high cost of energy, raw materials and haulage as well as high rate of adulteration and counterfeiting is hurting their industry.
“Our ability to surmount and overcome these challenges will bring the industry to the desired state,” Chris Kiwamu, managing consultant and chairman, Advisory Board of Kirsten Turner Consulting, said during his keynote address at PMA 2018 annual general meeting held in Lagos recently.
He said despite its large population and huge construction sites, Nigeria’s paint per capital consumption still ranks low when compared with other countries of the world.
According to the Paints Association of Nigeria (PMA), the country’s per capital paint consumption is less than 1 kg per head, which is very low when compared with countries such as Brazil, 8kg per head; Venezuela, 7.5Kg per head; Japan and West Europe 15kg per head; and United Sates and New Zealand, 25kg per head, among others.
“Nigeria paint consumption is still among the lowest in the world, at less than 1kg per person,” Kiwamu said.
“If we can grow our paints consumption to 3kg per head in the medium-term perspective, it will positively affect the fortunes of virtually all market participants in the industry,” he stated.
He noted that the target of 3kg per head in the country is not a very ambitious projection as countries such as Bolivia, Paraguay and Venezuela of relatively poor economies have already attained and surpassed the target.
He stated that the industry is currently estimated at $268million and projected to grow to $377 million in 2025 with increase in per capital consumption.
He also added that despite the industry growing fast in the last few years, rising costs and high rate of importation have affected the profit margins of local paints manufacturers.
He identified high cost of energy, raw materials and haulage as well as high rate of adulteration and counterfeiting as factors responsible for the rising costs of manufacturers.
“The current low per capital consumption of paints in Nigeria offers tremendous opportunity for paint practitioners in the country,” he says.
Also speaking during the annual meeting, Rotimi Aluko, chairman of PMA and managing director of Voda Nigeria Limited, said that the provision of critical public utilities is critical for the development of industrialisation in the country as well as for economic growth.
“The problem of infrastructural deficiencies of roads and public utilities still poses a serious challenge to the survival of the paint industry and the Nigeria economy,” Aluko said.