By Jackson Okoth

A growing presence of cheaper, poor quality paints in rural markets has finally caught the attention of larger players in the industry.

"While still collecting data on this low-end market segment, we are undecided on whether to enter it or not," said Mr Rakesh Rao, CEO Crown Berger Kenya Limited.

Although there is a high volume in this market, it is the low margin that has kept big players away. This has created more space for cheaper, substandard paints.

While the premium paints market is dominated by Dura Coat, Crown, Vasco, Sadolin and Galaxy, all other firms sell their products to the low-end retail segment.

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"At present, we are unable to go down market because our machines are not designed for it. We do not also want to hurt our shareholders," said Rao.

With the economy still running on low gear, the paints industry appears to have survived the recession.

Strong demand

"We are experiencing strong demand, especially from the retail market," he said. In order to retain market share and beat competition, Crown Berger is eyeing the regional market.

It has, for instance, set up a $2 million (Sh148 million) manufacturing plant in Uganda. This is in addition to distribution arrangements in Tanzania and other markets.

"We shall be using this plant as a launch pad to other regional markets of Rwanda, Congo, Sudan, Burundi and Somalia," said Rao.

It is the decorative paints market where competition is most intense.

"We are concentrating on this segment where demand is still very strong," he said.

A drop in sales has been recorded in the automotive paints industry, while growth has been average in the industrial and marine paints segments.Buoyed by high demand for housing, paints manufacturers are placing huge bets on this to push up sales.

While premium quality paint retails at Sh250 a litre, cheaper alternatives sell at Sh150 a litre.

Figures indicate that low quality paints occupy an estimated 15-20 per cent of the market.

"We are noticing a shift in consumer patterns from cheap low quality paints to stronger brands,’ said Rao.