No festive shine
Although the festive season is considered to be the prime time for the paint industry, it has no shine this festive season.
Already affected by devastating April earthquake, the domestic paint industry has further contracted due to the current political instability.
As the real estate sector is facing problems, the paint market has not only lost its year on year growth of 15 per cent but also suffered a decline of five per cent. On the top of that, the short supply of raw materials has barred the industry from operating at full production capacity.
“The paint industry has not been able to perform this year, as the devastating earthquake and Tarai unrest has badly affected both industry and market,” said Budhaditya Mukherjee, Country Director of Asian Paints Nepal.
Citing that fresh construction has completely dried up, he said, “Currently the market is confined to repainting, however, this has also fallen short.”
He added, “We are compelled to operate below our production capacity as there a huge dearth of raw material.” According to him, they still plan to introduce their festive offer shortly. “We are optimistic about the market. It will improve once the existing political instability is resolved,” he added.
“The current fiscal year is going to be challenging for the paint industry,” said Gyanu Sigdel, Assistant Manager Marketing at Berger Jenson and Nicholson Nepal, adding that the slump in sales began with the massive earthquake and it is yet to recover.
“Post-earthquake, architecture plans for new houses were sanctioned, eventually no new construction has been initiated till date,” he shared, adding that it has resulted in the plummeting of the market by four per cent.
Citing that the industry has been experiencing unhealthy competition, Sigdel said, “A sizeable number of importers are importing sub-standard paints through both formal and informal channels which is also affecting the market.” According to him, currently they are producing merely 50 per cent of their installed capacity. Berger Nepal has introduced its festive offer — ‘Berger Money Kamana’.
Under this scheme, customers need to send photographs of their houses painted with Berger paints and the company will reward Rs 100,000 to some 40 best-painted houses. According to him, they foresee the industry making a comeback and flourishing only after the third quarter of the next fiscal, as the construction of new buildings will takeapproximately a year to complete.
Poor performance by the housing sector and delay in decision-making process to provide construction permits are major factors to affect the industry.
Moreover, fuel crisis, lack of availability of manpower — particularly painters and the unavailability of raw material owing to the almost two months blockade in the Tarai region has hampered the industry.
“The demand for paints has improved as compared to two months earlier,” said Amit Narayan Shrestha, Territory Sales Incharge at Pashupati Paints, adding that however, they are facing a tough time to supply products on time due to fuel crisis.
Citing that they are not coming up with any festive schemes this season, he said, “Sales have improved as compared to previous months. But with the festive season approaching, we have not planned any scheme this time due to the current political unrest.” He is of the opinion that the market will progress as soon as the political situation improves.