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INDUSTRY: Paint manufacturer, Crown Paints Kenya expects the demand to increase with the reopening of the economy despite weakening supply from markets like India and South Africa.

The paint industry uses crude oil derivatives such as titanium dioxide, zinc oxide, solvents like mineral turpentine and resins and additives as raw materials, which account for more than 50 per cent of a company’s total expense.

The stock for such materials coupled with higher crude prices has rallied to low levels since April this year owing to the disruptions of the supply flow brought by coronavirus that had seen major supply markets close down for several weeks and as a result fracturing the local market.

“We have a little challenge of getting our supplies, most supply chains are non-committed at the moment since some of them like in South Africa and India were closed for 40 days others longer because of the pandemic,” said Crown Paints CEO Rakesh Rao.

Low demand

He atributed this to most supply companies having anticipated low demand for paint products during the pandemic period with most families in enforced confinement.

As a result of the low supply, Rao said costlier raw materials will likely put pressure on the firm’s margins.

The shortage,  Rao said in an exclusive interview with Business Hub could see the company pass the cost to the consumer.

He, however expressed confidence prices will stabilise almost instantaneously with the gradual resumption of export business in key Asian markets like India and Srilanka as well as European sellers.