Paint maker grapples with fakes, high operating costs
By Faith Kyoumukama
Give us a brief background on your career.
I have more than 35 years’ experience, but I have worked in Kenya for about 15 years. Before I came to Kenya, I worked for multi-national company, India’s Tata and Mitsubishi corporations, to name but a few. I then joined Crown Paints in Nairobi in March 2005.
As a paint manufacturer, do you experience cases of counterfeits linked to your products?
Yes. In any developing or emerging market, counterfeits are bound to exist. Paint cannot be compared to hi-tech products such as phones or TVs, all you need is a few raw materials to come up with your own type of paint. Counterfeits branded as Crown Paints are sold at a cheaper price. People use our containers to repackage their own kind of product. Fortunately, they have not managed to forge all our products. Through our loyalty programme Team Kubwa painters are empowered to quickly identify fake products.
As a company, how are you managing the issue?
We are repackaging our products with a plastic seal-proof, especially for all our water-based paints, which make up 90 per cent of our products while the rest are oil-based. Once you open the can, you cannot reuse it. Unfortunately, we cannot use the same seal proof with oil-based products because they contain Jilin and certain chemicals, which react strongly with plastic.
Any new products introduced to consumers this year?
For 60 years and counting, Crown has led the paint industry in Kenya by innovating towards success. This year we are introducing metallic finishes, designer coatings, texture finishes and more low-range products, which are cost-friendly across the market. For the high-end market, we have introduced the Crown Permacote Ultra guard Silicone, which guarantees a shelf life of over 15 years for exterior finishes. What makes it stand out is the silicone additive; it’s washable, water repellent, fully breathable, anti-fungus and anti-mould and has a unique opacity
How does your loyalty programme work?
The loyalty programme is in all African countries where we are present. In Kenya it’s labelled, Team Kubwa and is open to all painters; we provide exclusive offers, benefits and free gifts. The initiative is an incentive to painters to use Crown Paints and earn points through a ‘points’ card placed inside selected Crown Paints products. We also train painters from across the country and instruct them on best use of our quality products.
What is quality paint?
The most important thing in quality is longevity; paint needs to last longer with the same finish. Some paints look good to the eye for a few weeks then they start to crack. Crown offers a guarantee of durability of five to seven years.
What challenges do you face?
One challenge is impersonation, where criminals who purport to be from Crown Paints, engage our customers in schemes with an aim to steal from them.
There are also so many regulation agencies, with different requirements and this presents a challenge to us, on who to work with. It is, therefore a struggle to maintain clientele in an inflation environment.
Our performance last year was impacted greatly by a high cost of production as cost of raw material increased, as did other operating expenses. The effects of a credit crunch in Kenya, as lenders became more prudent in lending affected sales collection for over the year, which in turn affected our cash inflows hence higher borrowing.
Overall, the company faced difficult market conditions in all the subsidiaries Crown Paints Tanzania, Regal Paints Uganda and Crown Paints Rwanda. Operations in Tanzania slowed down our profit margins despite improvement in the Kenyan market, which had triggered high demand for our products.
Despite this, the company was able to deliver a strong performance in revenue growth of 13 per cent. Last year, we partnered with Walplast Products, the world’s largest leading manufacturer and exporter of wall putty.
What is the outlook?
We have a positive outlook for the market demand given projected economic in the region, taking into consideration our position both in terms of strategic and operational preparedness. We hope to draw benefits from the current calm political environment that has given a stable business environment and increased customer confidence.
However, we expect the competition to remain aggressive in terms of price and output. The company will continue to draw from its wide range of innovate products, technology and its people to meet the need of the ever-changing market.
