Nippon Paint targets 20-per-cent growth

Real Estate April 04, 2014 00:00

By Somluck Srimalee
The Nation

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Nippon Paint Decorative Coatings (Thailand) Co is confident of maintaining 20-per-cent growth this year although the first quarter saw flat growth in the decorative coating paint market compared with the same period of last year.

The company also will maintain the price of its products this year although raw material cost has risen both from the weaker baht and increase in the price of chemicals. The company had increased the price of its products by an average 3 per cent last year compared with 2012.
General manager Chalermpong Mahavanidvong told The Nation early this week that the company has achieved 6 per cent growth in the first quarter of this year compared with last year. This is better than the total market, which has seen flat growth.
“Our strategy is to focus on premium market growth and also launch a marketing strategy to manage our supply chain and dealer network to boost our sales growth to achieve 20-per-cent growth this year,” he said.
The marketing strategy would involve creating a closer relationship with its 1,000 dealers nationwide by customising services to its dealers.
“Some dealers have end-use customers so they will suggest and supply products that match with the end users, while some dealers have customers who are small builders, so they will be provided products to match their needs. This helps our dealers reduce inventory and also speed up sales,” he said.
The firm plans to add 100 dealers this year, matching its plans to invest about Bt30 million for 100 new paint-mixer machines. This will be distributed to the 100 new dealers nationwide this year. Currently, 700 dealers of the total 1,000 have the machines.
The investment is part of its investment and marketing budget, spending of about 10 per cent of its total annual revenue.
The company reported Bt1.7 billion revenue last year, accounting for about 10 per cent market share of the decorative paint market, which was worth Bt17 billion at the end of 2013, up 10 per cent year on year.
The firm plans to launch four new products a year serving customers who are seeking green products.
“We set aside an average of 2 per cent of revenue for research and development every year to develop new products with our parent company in Japan. This enables our products to have quality and variety to serve different demands,” he said.
At present, 40 per cent of total revenue comes from premium products, 30 per cent from the middle market, and 30 per cent from budget market. Up to 50 per cent of customers are property firms who develop residential projects; the rest are end users. About 50 per cent of its distribution is through traditional dealers, and the rest from modern trade.
“If we achieve 20-per-cent sales growth – equal to Bt2.04 billion – this year, our market share in decorative paints will increase from 10 per cent now to 11 per cent this year based on flat growth in the market,” he said.