According to Mohsin Habib Chowdhury, Chief Operating Officer of Berger Paints Bangladesh Limited, paint companies are increasingly investing in developing new products, particularly those with a low environmental impact. He noted that efforts are underway to create lead-free paints that are low in volatile organic compounds, which help reduce air pollution.

However, the paint industry, like many others, is feeling the impact of the ongoing economic slowdown. Rising US dollar prices have posed a significant challenge for paint companies dependent on imported raw materials, Chowdhury explained. With over 29 years of experience in the paint industry and a strong track record in senior leadership roles, he has proven his capabilities in negotiations, business development, and crafting effective strategies.

Discussing current industry challenges, Chowdhury pointed to the Red Sea conflict, which has disrupted global logistics, resulting in longer lead times. The global economic downturn has also increased China’s exports to Western countries, creating a shortage of shipping vessels in South Asia. These factors have complicated the situation for companies like Berger, which rely on imported raw materials. Chowdhury emphasized the need for regulatory intervention to alleviate these challenges, which are major hurdles to maintaining growth in the current economic climate.

Chowdhury also mentioned that since 2010, the government has imposed a 5 percent supplementary duty on the value of each paint product. In the current fiscal year, this tax has been extended to include primers, even though they are not luxury items. He urged policymakers to reconsider these policies, noting that paint serves a vital role in protecting infrastructure from corrosion and erosion.

When asked about the current market size of paint products, Chowdhury estimated that sales would exceed Tk 6,000 crore this year. He expressed optimism about the industry’s future, projecting steady annual growth of up to 4 percent from 2024 to 2028. The domestic paint market is expanding due to factors like economic development, rapid urbanization, and technological advancements, with rising disposable incomes driving increased consumption.

Chowdhury also highlighted the industry’s potential for growth, despite a 7 percent slowdown in sales growth last year due to macroeconomic vulnerabilities. He noted that paint consumption per capita in Bangladesh is only 1.4 kilograms, compared to 3 kilograms in India and Sri Lanka, and 7 to 10 kilograms in ASEAN countries. In China, per capita consumption is 12 kilograms. Chowdhury attributed this disparity to a lack of awareness about the benefits of paint but also sees it as an opportunity for market growth.

The paint industry is currently facing internal and external challenges due to the ongoing global and local economic crises, particularly the Russia-Ukraine war. These crises have disrupted global supply chains, created a US dollar shortage in Bangladesh, and devalued the local currency. As a result, many paint companies struggle to import raw materials due to difficulties in opening letters of credit, and import costs have risen by around 30 percent over the past two years due to the rising US dollar rate. “The persistent inflationary pressure has also impacted import costs, leading us to raise our product prices,” Chowdhury said.

Chowdhury noted that around 40 paint companies, including both local and multinational corporations, operate in the domestic market. While multinational corporations dominate the market, Berger remains the clear leader. Global players like Jotun, Nippon, and Kansai Nerolac are also present in the market. Berger exemplifies a strong commitment to social responsibility by using eco-friendly materials, reducing its carbon footprint, and supporting local communities, Chowdhury said. Additionally, Berger strives to innovate products specifically tailored to the local climate.

“At Berger, we recognize industry challenges and actively invest in climate-specific solutions. The focus on environmental sustainability is a growing trend worldwide, leading to rising demand for eco-friendly paints,” Chowdhury added. He cited Berger’s DampGuard product, a water-based coating designed to combat algae, fungus, hairline cracks, and recurring dampness, as a prime example of the company’s commitment to addressing local climate challenges. He also mentioned that their WeatherCoat Smooth and WeatherCoat Supreme paints are formulated to withstand harsh weather conditions, offering enhanced protection and longevity compared to standard paints.

Highlighting the value of such innovations, Chowdhury noted that Berger was the first to introduce a “color bank” machine, offering more than 5,000 shades. It was also the first local paint company to partner with world-renowned brands like PPG (vehicle refinishing), Clariant (tinting systems), Fosroc (construction chemicals), Chugoku (marine paints), and Beckers Group (coil coatings). Berger’s diverse product portfolio includes decorative paints, wood coatings (lacquers and varnishes), vehicle refinishing solutions, coil coatings, marine coatings, construction and textile chemicals, powder coatings, adhesives, and inks. “This comprehensive product suite caters to a wide range of customers and applications,” Chowdhury said.

He also mentioned that Berger’s strategic partnerships provide the company with access to cutting-edge technologies and expertise. Berger prioritizes exceptional customer support, offering “experience zones” with free technical advice on surface preparation, color selection, and custom color schemes. Chowdhury emphasized that Berger is a market pioneer, leveraging a data-driven approach to product development and a commitment to comprehensive solutions. The company uses robust consumer insights to identify unmet needs and develop targeted solutions. One such innovation is Berger’s “Easy Clean” product, a highly washable, scrub-resistant, and long-lasting paint ideal for high-traffic areas, demonstrating Berger’s focus on customer-centric innovation.

Finally, Chowdhury mentioned that Berger sources high-quality monomers and titanium dioxide from abroad to ensure the best possible product performance. However, currency volatility has made these expenses uncertain, directly affecting the company’s profitability. “This is directly affecting our profitability,” he added.

Source: The Daily Star