Written By Syed Md. Rakeen, Team MBR

As Bangladesh has experienced promising economic growth in recent years, the paints and coatings industry is playing an instrumental role in preserving and protecting important infrastructure in the country. Its growth can be attributed to its widespread usage owing to significant industrialisation, urbanisation, and economic development. This industry is responsible for the enhancement of structural protection as well as the durability of structures. The paints and coatings industry is considered a segment of the chemical industry that serves the purposes of decoration and protection. Vehicles, ships, and houses are a few of the many examples where both paints and coatings aid in resisting corrosion as well as enhancing the visual outlook of structures. According to Statista, a leading statistics portal based in Germany, the global market size of the paints and coatings industry was approximately USD 160 billion in 2021, and it is forecasted to reach USD 235 billion by 2029. This increasing growth in market size can be attributed to the rising demand in the automotive, wood, railing, coil, general industrial, aerospace, railing, and packaging coating markets.

Market Share of Paints and Coatings Manufacturers in Bangladesh

Due to rapid urbanisation and diverse industrial usage, the paints and coatings industry is growing annually at a rate of 6%, as reported by The Financial Express, a leading daily news outlet. The market size of the paints and coatings industry in Bangladesh was around USD 471 million in 2020, as per Coatings World, a global information source for the coatings industry, and has registered steady growth rates for most of the last decade.

As of now, there are around 40 companies, including both local organisations and MNCs. The industry is significantly dominated by multinational companies, as shown in Figure 01, with Berger Paints dominating with a market share of a whopping 54%, followed by Asian Paints (18%), Kansai Nerolac (7%), Nippon (3%), and Roxy Paints (1%). Among the local companies, only Elite Paint and Rainbow Paints hold a somewhat notable market share, emphasising the struggles of local companies in this industry.

Global Market Overview

The global paints and coatings market largely belongs to Asian countries, with some developing countries such as Bangladesh playing a significant role due to increasing investment in infrastructure in recent years. The demand for this industry is gaining momentum in Asia, as evident by its 55% global consumption in terms of volume. Despite growing concerns about economic instability in countries such as Sri Lanka, its detrimental effects did not lead to a major decline in the growth of sub-regional areas, as it occupies only 2.75% of the South Asian market size for paints. China boasts the largest paints and coatings market in Southeast Asia. Southeast Asia is anticipated to experience remarkable growth owing to strong economic growth in Vietnam, Indonesia, the Philippines, and other countries in other regions. Infrastructures such as housing, construction, and transportation are generally strong indicators of a country’s economic health. The coatings market in the United States, Japan, and Western Europe is more developed and stable, indicating its direct proportionality with strong economies.

Usage of Paints in Bangladesh

According to industry experts, there has been a notable increase in growth within the paint manufacturing sector over the past five to six years. A rise in per capita income along with an increase in consumption patterns in both urban and rural areas can account for the observed growth. The empirical data indicates that the yearly requirement for paint is approximately 200,000 metric tonnes, and this figure has demonstrated consistent levels of continuity during the preceding three years. As shown in Figure 02, a staggering 80% of the paints are used for decorative purposes, while industrial paints
make up a measly 10% of the total paint usage.

Types of Coatings

Architectural Coatings

 Architectural coatings are a class of materials that serve the purpose of safeguarding, conserving, and enhancing the aesthetic appeal of both indoor and outdoor surfaces of various structures, such as residential, commercial, and institutional buildings, including healthcare facilities, as well as industrial buildings and factories. The coatings have been formulated with the purpose of enhancing the longevity, ability to withstand harsh weather conditions, and visual attractiveness of both indoor and outdoor surfaces. The rapid urbanisation and construction boom in Bangladesh present significant potential for architectural coatings. The increasing number of residential and commercial buildings being erected has resulted in a surge in the need for coatings that can safeguard structures from severe weather conditions, including heavy precipitation, high humidity, and extreme temperatures.

Industrial Coatings

The application of industrial coatings in factory settings is essential for ensuring the optimal performance and durability of various industrial, transportation, and durable consumer products. These coatings offer functional properties that are critical to the overall functionality of these products. The application of coatings on various surfaces such as metal, concrete, and other materials is a widely accepted practice to impart resistance against corrosion, chemicals, abrasion, and weathering. Industrial coatings have been identified as having significant potential in Bangladesh. The ongoing process of rapid industrialisation and infrastructure development in the country has led to an increasing need for durable and dependable coating solutions. The application of industrial coatings is an effective method for safeguarding structures, machinery, and equipment against various environmental factors. This approach has been proven to prolong the lifespan of these assets while also minimising maintenance expenses.

Special Purpose Coatings

The category of special purpose coatings encompasses a variety of coatings that are designed to fulfil a particular function. The common attribute among these coatings is their tendency to be applied in the field rather than in a controlled factory environment. The industry segment in question encompasses a variety of coatings, including marine paints, high- performance maintenance coatings, coatings specified for military use that provide blast mitigation in buildings such as embassies and defence installations, automotive refinish paints, traffic and highway markings, roof coatings, as well as multi-colour and metallic paints.

Exploring the Potential of Paints and Coatings

According to recent findings, there are significant untapped opportunities within the sector. Relatively, Bangladesh is lagging behind its Asian peers with a per capita paint consumption of only 1.1 kg. In comparison, neighbouring India boasts a per capita paint consumption of 4.2 kg, while China's per capita consumption is nearly 9.0 kg. These numbers can be boasted of in the coming years through infrastructural development and the growing automotive and construction sectors. According to the Bangladesh Paint Manufacturer’s Association (BPMA), the sector has been making a significant contribution to the national economy. The annual revenue generated from this sector amounts to BDT 7.0 billion, which is paid to the public exchequer. Additionally, the industry has created employment opportunities for over 100,000 individuals, both directly and indirectly.

The growing demands of the paint industry have prompted Asian Paints Bangladesh to invest USD 20 million for its second factory in the Mirsarai Economic Zone, as reported by the Bangladesh Economic Zones Authority. Berger Paints Bangladesh is also planning to install a new factory in the same economic zone and has already invested around BDT 400 crore in creating a factory to further increase its market share in Bangladesh. A Norway-based company named Jotun Group, the ninth biggest paint company in the world had already started manufacturing in its factory in Meghna Industrial Economic Zone.

However, based on the data provided by paint manufacturers, the demand for decorative paints in the local market right now might not be very high. It is anticipated that the consumption of decorative paints will experience a positive correlation with the current economic recovery, resulting in a favourable outlook for the industry.

Adopting a Culture of Environment-Friendly Paints

Companies operating in this space are currently offering antimicrobial paint that has been certified by reputable certifying bodies worldwide for its effectiveness in combating viruses and germs on non-porous surfaces.

Conventional paints commonly used in households can result in environmental toxicity due to the emission of various gases, which significantly contribute to indoor air pollution. As a result, it is of utmost importance to consider its impact on health risks, including but not limited to respiratory ailments and headaches. In light of environmental concerns, Berger Paints Bangladesh has taken measures to eliminate lead from its paint products. Additionally, the company has developed a line of eco-friendly paints known as the Breathe Easy Eco-Series, which is designed to promote a safer environment. The use of environmentally friendly paints is a favourable choice for promoting the health and safety of individuals within a household.

The paints belonging to this particular series exhibit a complete absence of odour, possess eco-friendly properties, and exhibit antibacterial characteristics. Consequently, the protective function of the substance is achieved without any observed adverse reactions to the walls. The product exhibits ultra-low levels of volatile organic compounds (VOCs) and is entirely devoid of lead.

Stumbling Blocks Amidst Economic Uncertainties

The current progress of the paint industry in Bangladesh is being impeded by the scarcity of US dollars. This has led to a challenging situation for manufacturers, who are facing difficulties in importing raw materials in accordance with their demands. The present phenomenon is a widely encountered challenge across diverse sectors within the nation. Approximately 99% of the raw materials used in the production of paint are imported, and the associated import duty and tax rates are substantial. The imports of paint are subject to a supplementary duty of 5% and a valueadded tax of 15%. This is due to the classification of paint as a luxury item. Despite the massive demands of the paints and coatings industry, Bangladesh still imports paints and varnishes, and the number has only gone up every year, as shown in Figure 03. Bangladesh’s imports of paints and varnishes are incrementally going up, and with the recent dollar crisis, the figures are expected to experience a massive upturn relative to previous years.

Environmental regulations are increasingly becoming more rigorous worldwide, with the aim of restricting the release of volatile organic compounds and hazardous air pollutants. This trend is not limited to industrialised nations but also includes developing economies such as mainland China. The escalation of raw material expenses, along with the need for energy conservation, are significant factors that are contributing to the production costs of coatings. In fact, raw material costs alone make up approximately 50% to 60% of the total production expenses for coatings. The use of solvents is significant in the coatings industry, where they are predominantly sourced from petrochemical feedstocks and refinery operations. These materials are highly dependent on fluctuations in crude oil and gas prices. The coatings industry is also known to utilise a significant amount of non-petrochemical feedstocks, including pigments and additives.

Chemical Hazards

The Environmental and Social Development Organization (ESDO) analysed 63 samples of colours from 39 domestic and foreign companies to determine the amount of lead in the decorative and industrial colours offered in Bangladesh. The samples consisted of 68% industrial and 32% ornamental colours. Tests revealed lead levels between 90 and 250 parts per million (ppm) in 30.8% of the ornamental colours, while the remaining 69.2% had levels below 90 ppm. But in 50% of the industrially used colours, lead was discovered in alarmingly high amounts. The colour orange contained the greatest concentration of lead (97,000 ppm). Companies operating in the paints and coatings industry are required to keep their lead limits below 90 ppm as per Bangladesh Standards and Testing Institution (BSTI).

The growth of the paints and coatings industry in Bangladesh is being fuelled by the development in the real estate sector, which is a result of increasing urbanisation and a gradual increase in consumer awareness regarding the importance of protecting houses. According to the Bangladesh Bureau of Statistics, a significant increase in the urban population has been noticed over the last twenty years, with the figures rising from 28.61 million to almost 42 million and the urbanisation rate reaching 38.95% by the year 2021. The observed trend provides compelling evidence for the projected expansion of this industry in the forthcoming years. The transportation sector, along with a flourishing riverboat industry, is anticipated to propel the market owing to the substantial utilisation of paints and coatings in this domain. According to market projections, the small ocean-faring vessel industry is anticipated to experience a surge in growth, reaching an estimated value of USD 400 billion by the year 2026. This expected expansion is expected to serve as a key driver for the paints and coatings market. However, the growth of this sector has been halted by a number of factors, including rising prices of raw materials in global markets, the depreciation of the local currency, and the imposition of new supplementary duties. Upon economic recovery, it is anticipated that the paints and coatings industry will experience a resurgence and return to its previous state of prosperity, with the potential for future growth.