• Tuesday, July 16, 2024
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BusinessDay

Nigeria’s paints, coatings market looks up as infrastructure spending rises

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With the increase in infrastructures and their maintenance spending by the private and public sectors in Nigeria, the industrial paints and coatings market is receiving a significant boost as demand for the products is rising.

Also, the enforcement of the local content in the oil and gas industry is said to be driving the growth of the market as local operators are increasingly engaged by oil and gas companies for painting and coatings of oil platforms, pipelines and vessels.

Compared to other African countries such as Kenya and South Africa, Nigeria presents the most opportunities for industrial paints and coatings manufacturers due to the government’s success in stimulating private and public involvement in development projects, such as the landlord management model, introduced in 2006, to enable private companies to handle operations at Nigeria’s ports, according to a new analysis of the industrial paints and coatings market for South Africa, Nigeria and Kenya.

Local production capacity utilisation of paints and coatings in Nigeria will increase significantly from its 2010 level of 35 to 40 percent, with the expected rollout of several new development projects by the government as well as private players, the report says.

Sulaimon Tella, president of Paints Manufacturers’ Association of Nigeria and chief executive officer, IPWA Plc, said: “The present enforcement of the local content Act in the oil and gas industry is helping local manufacturers of paints and coatings. A large chunk of importation has stopped. Also, a lot of construction is going on in places like Lagos and Abuja. Houses are being built. Tank farms are being built for the storage of petroleum products and they have to be coated. A lot of furniture work is also going on in the country. All these are driving the growth of the market.”

The oil and gas industry is the biggest contributor to the growth of the paints and coatings market, he said, adding, “But there are still challenges such as access to funding by manufacturers.”

Other challenges facing the painting industry includes lack of stable electricity, which contributes to the high of cost of production in the country.

“New projects announced in the oil and gas sector and allied industries in South Africa, Nigeria and Kenya are fuelling the demand for industrial paints and coatings products,” said Anthony Lawrence, industry analyst Frost & Sullivan.

The study finds that the sales volume of industrial paints and coatings across the three countries stood at 101.2 million litres in 2012, and is estimated to reach 142.1 million litres in 2017.

Rotimi Aluko, managing director, Voda Paints Limited, said if the uptick in infrastructure developments and upgrades by the public and private sectors continue, the paints and coatings industry stands to benefit a lot from it.

“State governments such as Lagos and Kano are taking provision of houses very seriously. Kano State is building three estates simultaneously. Osun and Oyo states are doing a lot in terms of renovation of schools and upgrade of infrastructure. Now that mortgage is coming back to Nigeria, it is getting a lot of people interested in property development. Those are going to be drivers of the industry going forward.”

Femi Asu