Nigerian Paint Industry; Analysis, Overview, Regulatory Bodies, Associations and Challenges

The Nigerian paint industry has done fairly well since its inception even in the face of unflinching obstacles. With this article info guide provides a brief summary of the prospects, challenges, and a general overview of the Nigerian paint industry.

The nature and overview of the Nigerian paint industry

Paint manufacturing companies have been existing in Nigeria as early as the nineteen sixties. Some of them operated as subsidiaries of foreign companies until indigenous companies completely bought over their shares.

These industries have grown continuously and evolved overtime. Today, the Nigerian paint industry is one of the largest producing in the county and major player in the employment of labour and economic advancement.

The industry has witnessed technological advancements in the methods of production as a result of stiff competition within the industry as every paint producer is forced to put in their best to ensure that the remain relevant in the market.

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The Nigerian paints industry operates in three different tiers which are determined by product quality, company reputation and a large customer base. The first tier consists of major player and producers of top quality paints like Dulux paints, Berger paints, Meyer paints, IPWA, CAP Plc and premium paints.

They control the industry to a large extent and have been existing for decades as importers of paint products but began to produce locally as the demand increased.

These key players actually laid the foundation of the indigenous paint industry in Nigeria and have remained at the top by refusing to compromise on the quality of their products. Find a directory on the top fifteen paint producing companies in Nigeria and their products on infoguide.

The second tier consists of medium quality paint producers with a lesser control of the market shares; they are mostly private owned companies that operate on a smaller scale while the third tier consists of companies that produce basic quality paint products they have a bigger market than the middle tier producers because, their products are cheap and very affordable.

Their tier producing companies focus more on decorative paints and fare very well in the market despite the quality of their products.

Paint Industry in Nigeria Analysis

The Nigerian paints & coatings market was worth an estimated $200 million in 2012. Growing by an estimated CAGR of 9.01%, the market was an estimated $218 million in 2013 and will reach $238 million

in 2014. Due to a significant number of unorganized players, estimating production capacity and sales volumes are difficult. However, from our analysis we estimate total sales volume to be around an estimated 128 million litres a year.

The Nigerian paint industry is segmented into organized and unorganized sectors. The organized sector consists of companies with adequate access to capital and an increasingly effective distribution network. Inadequate access to funds and technical expertise required for industrial coatings is a major factor we used in differentiating market players.

In decorative paints segment, both organized and unorganized players are present as it does not require heavy technological investments. Lenient government policies make it easy for new players to enter into the market resulting in a large number of players in  the Nigerian paints & coatings industry.

The sector comprises of about 5 big companies with each company’s annual revenues in excess of $7 million, and numerous small and medium scaled companies nationwide.

In 2012, according to Frost & Sullivan, decorative paints & coatings which have a strong correlation with the real estate industry was an estimated 71% of total volume of paints & coatings in Nigeria.

From our observations of the different prices in the different paints& coatings segment we estimate the decorative segment accounts for about 60% of total sales value. The industrial coatings sector accounts for an estimated 29% of total volume and 40% of total sales value.

Nigerian paint industry Regulatory Bodies and Associations

The standard organization of Nigeria (SON) is the major regulating body of the Nigerian paint industry.

They are responsible for ensuring that all manufacturing industries in Nigeria are duly certified; and their products are suitable. Safe and guarantee maximum consumer satisfaction through compliance with government policies.

They promote healthy competition and give room for continuous improvement on product quality in the manufacturing industry.

The existence of stiff competition and continuous production of qualitative products are direct effects of the monitoring activities of the standard organization of Nigeria in the industry.

Paint Industry Manufacturers Association of Nigeria (PMA)

PMA Is another body that regulates and sees to the welfare of the Nigerian paint industry. Headed by a chairman. The association serves as a voice and a watch dog of paint manufacturers in Nigeria.

They uphold peace and cater generally for the issues that affect productivity and development of the industry. The association holds a yearly exhibition which was incepted in 2016.

The exhibition which is a bit annual raw materials, equipment and painting show held on the 23rd of October and as tagged “PMA Nigeria Coating Show”.

Exhibitors from the United Kingdom, Germany, Greece, Turkey, South Africa and India were all in attendance.

The primary goal of the exhibition is to curb the high cost and scarcity of raw materials for local production which is a major challenge faced in the industry and to promote paint Technology by sourcing for local contents.

Paints manufacturers association of Nigeria works in collaboration with the standard organization of Nigeria to ensure there is no compromise on the quality of products and to ensure that quality of the products are the same with those produced in other Economic community of west African states.

Challenges and Prospects of the Nigerian Paint Industry

We will begin with outlining the challenges faced by the Paint Industry:

1) NEGLECT BY THE GOVERNMENT

The Nigerian government is one that is obsessed with oil and gas sector and treats it with utmost priority to the detriment of other sectors. Most manufacturing industries in Nigeria are self dependent and this is a sad reality.

Apart form collecting taxes and cost of certification from these companies, the government provides no incentives and barely carries out routine checks.

This limits the percentage of the paint industry’s contribution to the gross domestic product of the country.

The absence of an efficient regulatory practice also increase the emergence of new industries and this reduces the standard of products and frustrates rapid development.

2) ACCESS TO FACILITIES

Many companies in the Nigerian paint industry are not publicly quoted and cannot easily obtain funds from the Nigerian capital market. This means that production is limited to individual capability.

Apart from financial limitations, the industry also faces a major challenge in epileptic power supply, they end of spending huge sums of money on diesel for production.

The inability of the government to properly equip the standard organization of Nigeria with adequate facilities and laboratories is hindrance to the certification and testing of products to meet international standards; producers have to obtain international certification at very huge cost that only few companies can afford.

Another pressing issue is the unavailability of raw materials needed for production, paint manufacturers import about sixty percent of raw materials used and this dwindles production capacity.

Prospects of the Nigerian Paint industry include

1) QUALITY CONTROL

The efforts made by the Paint Manufacturers Association of Nigeria and the standard organization of Nigeria to maintain minimum standard of paint manufacturing so far has improved quality production and promoted healthy competition.

2) HIGH DEMAND

There is a rapid increase in the construction of buildings for private and commercial purposes virtually everywhere in Nigeria. This has greatly increased the demand for paint products which are backed up with an effective channel of distribution for the upkeep and benefit of the industry.

LIST OF PAINT INDUSTRIES IN NIGERIA

I mentioned earlier that infoguide has a list of the top fifteen paint producing companies in Nigeria but I will name few of them: Premium paints, Dulux Paints, Meyer paints, Berger paints, IPWA, Nigerian German Chemicals, African Paints and CAP Plc.

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Lami is from cross river state and holds a B.sc in accounting from a Nigerian university. Writing for her is a form of detoxification, she has written several articles for Essence magazine and runs political commentary on twitter. InfoGuide Nigeria is a team of Resource Persons and Consultants led by Ifiokobong Roberts. Page maintained by Ifiokobong Roberts. If you need a personal assistance on this topic, kindly contact us.

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