Manufacturers have warned of an imminent increase in prices of paint starting this year following a sharp rise in production costs in the past six months starting July last year.
Regional paint manufacturer, Crown Paints, experienced a shrink in demand last year during the electioneering period last year and will be eyeing to grow its premium products market share from 60 to 65% in 2018.
Crown Paints CEO Rakesh Rao, while outlining the firm’s 2018 strategy on Friday, said most clients in the real estate sector have indicated they would liquidate the current stock as the economy recovers from the effects of last year’s political crisis.
Rao exuded confidence that the sector would bounce back in the next two years to register full potential and boost the firm’s earnings. He, however, warned that the market should prepare for higher prices due to increased production costs.
“The prices of raw materials have gone high. Some have shot up by over 100 per cent since July. A tonne of titanium could go for US$ 1,900 and currently it is going for US% 3,600 per tonne and we do not have an option as it translates to increases in price,” said Rao.
Last year, Crown Paints reported a 51.6% jump in the half-year profit reporting Ksh 60.4 million net earnings. Rao said the company plans to launch a major campaign drive to educate and connect with the painters’ customers as a way of establishing a long-term partnership that will improve demand for its products.
“We also intend to offer many new value added services for homes by engaging with customers for research in order to develop products and services that meet and even exceed their expectations to grow this segment of our business,” said Rao.
He said since most clients choose compromising quality when paint prices rise, the firm will develop low cost paint for the housing sector. These, he said, will be availed at a lower prices than prevailing products in the market.
Last year, Crown Paints manufacturing plant in Kisumu was adversely affected as most of its suppliers in the Western Kenya region were unable to access and distribute its products due to post-election chaos. Most of the clients had works halted, a situation Rao said the company had no viable strategy to overcome given it was a repeat election.
The company had recorded highest product uptake in August last year, but business deteriorated as the country’s suck further into elections that were marred with protests.
Joseph Sosi is a reporter with Business Today. He holds a Bachelor of Arts (Communication and Media Technology) degree from Maseno University. Previously, he was a sub-editor of Ureport and social media administrator at The Standard Group. He is passionate about politics, education and technology.