The enormous local paint market is dominated by foreign brands as local firms have failed to gain market share due to lack of technological support and access to affordable financing, according to industry insiders.
With the growth in the economy that has resulted in rapid urbanisation and a surge in spending capacity, the middle class to the rich and super rich, often opt for high quality paint materials of foreign brands.
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 percent of the country’s paint market is in the hands of foreign brands, including Berger, Asian, Roxy, Pailac, Aqua and Elite.
Berger alone holds 52 percent market share, followed by Asian Paints with 18 percent, Roxy 7 percent, Elite 7 percent, Pailac 5 percent and Aqua 2 percent, the study elaborated.
The 30 local brands have less than 20 percent market share, it said.
Pran-RFL Group has recently entered the market with Rainbow Paints. Other local brands include RAK, Uzala, Nippon, and Jotun Paints.
According estimates by the Bangladesh Paint Manufacturers’ Association (BPMA), the yearly domestic paint market is around Tk 30 billion.
“Local paint companies lack research and development facilities to produce quality products. Besides, lack of low-cost capital funding also hinders prospects for local brands,” BPMA General Secretary Md. Shamsuzzaman told 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 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.
“The use of paint has proved to be useful to flat and home owners as it increases the lifespan of buildings,” BPMA Organizing Secretary Asaduzzaman Shahid Khan said.
“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,” he added.
The government should put some sort of restrictions on the entry of foreign brands in the local market, say BPMA leaders.
Local paint companies said the sector now employs nearly 20,000 people. According to them, without policy and fiscal support from the government, the local industry would perish, let alone grow.
The enormous demand for paints used in ships, 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.
“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,” said Berger Paints Bangladesh Managing Director Rupali Chowdhury.
The company employs 1,000 people and has a countrywide distribution network of more than 3,000 dealers, she added.
Berger Paints Bangladesh, an 'A' category company, listed with the stock exchanges in 2006. The company's sponsor-directors hold 95 percent shares, institutions 1.85 percent, foreign shareholders 1.55 percent, and the general public 1.60 percent, as of September 2018.