Small paint manufacturers need easy loans for survival

The coronavirus outbreak wreaked havoc on the paint industry at a time when it was reeling from a slowdown in the housing and infrastructure sectors for the last couple of years, said Rupali Chowdhury, managing director of Berger Paints Bangladesh.

The industry has been hit harder than many other sectors as paint is not considered as a staple item like food, for which people always set aside some fund to meet its demand in any crisis, she added.

A majority of the paint shops remained closed from March to June this year, pushing paint makers to post negative growths, Chowdhury told The Daily Star in an interview last week.

"Many ongoing and prospective projects got postponed or cancelled and most consumers preferred to avoid painting their houses for the time being, mainly due to financial constraints and to minimise the risk of contamination.

"Demand for paint products also subsided due to consecutive natural disasters -- floods, cyclone Amphan and heavy rain, she said.

In April, sales in the paint industry came down to a record low, putting pressure on small paint makers, who were struggling to comply with the government's strict but timely directives to restrict the spread of Covid-19.

The coronavirus affected the net sales of Berger Paints Bangladesh also, which fell almost 50 per cent in the April-June quarter to Tk 228.5 crore from Tk 525 crore in the January-March quarter of 2020, she said.

The paint industry imports around 80 per cent of its raw materials from abroad.

But ensuring timely procurement of the materials became nearly impossible in March, April and May because of the restrictions on international shipments and closure of ports. 

"This pandemic tested the resilience of Berger's supply chain team. Our procurement team timely initiated the contingency plan and at times made air shipment of raw materials whenever necessary."

Since the Covid-19 outbreak, Berger revisited its distribution plan.

"We started sending larger consignments to depots instead of the regular ones along with delivering products directly to the dealers' points.

These steps helped the company complete the task with minimal manpower, cut operation costs and, most importantly, reduce the possibility of getting infected with the coronavirus.

"Our advanced technologies, structured management process and fearless attitude gave us a way forward."

Over the years, Berger has invested in technology and prepared itself to tackle situations similar to the current pandemic.

This year, the company conducted an annual financial audit, organised board meetings and annual general meetings digitally.

"The audit was done only in less than two months, as we provided the auditors with online access to our network to check the required information."

"Being one of the oldest and most renowned companies in the country, we believe that it is our responsibility to step in and help the country come out of the crisis."

In July, the company's Mr. Expert Advanced Hand Sanitisers hit market.

In the middle of that month, the company also introduced the 'Berger Expert Sanitisation Service' to provide global standard disinfection services to households, office premises and institutions.

"We launched new products and added new features to our existing offerings. Consequently, we started providing safe painting solutions from our Berger Experience Zone outlets so that our consumers can paint their homes without worrying about the risk of contamination.

"We also provided our painters and dealers with different types of safety equipment to ensure that our partners are safe and have the confidence to resume business as soon as the lockdown is lifted."

Berger even placed handwash basins at some dealers' point.

"Now our research and development team is actively working to introduce antivirus coating for all kinds of substrates. The product may hit the market soon."

The company provided the painters with over Tk 1.75 crore as donations to lessen their financial hardship.

The economy started reopening in July. Still many sub-dealers/wholesalers could not resume business in full swing due to disruption in the mainstream supply chain.

No one knows how long the virus will last, as scientists, doctors and drug makers are still struggling to find a cure for the contagious disease.

So, the company has carefully designed the shifts of its workers to ensure social distancing.

"Berger Paints Bangladesh has aligned its operations to cope with the pandemic if it stays here for long. There might be a slump, but it will not be a complete shutdown in the business."

The construction projects that were postponed are expected to resume soon. Painters and dealers have started working diligently to compensate the losses incurred during the initial days of the lockdown.

"We are doing our best to inject confidence among our customers and we strongly believe the situation is not going to exacerbate in the days to come."

Paint fights off effects of adverse weather conditions, pollution and hazardous chemicals, giving durability and enhanced functionality of infrastructure.

It is a part and parcel component for the construction of buildings, industrial set-ups and infrastructural projects.

Therefore, paint should not be considered as a luxury item, as it is an essential material to ensure protection against decay.

Paint should not be subject to any supplementary duty that applies to luxury items. To keep paint products affordable, it should be exempted from any such duty.

Most dealers of painting products belong to the small and medium enterprise segment and the government should not forget that this SMEs play an extremely important role for proper functioning of the economic ecosystem.

So, the government should now provide easy loans to SMEs for the sake of the paint industry.

Not only the government or the banking sector, but the non-governmental organisations and non-profitable institutions should also extend their support.