Nippon Paint Decorative Coatings (Thailand) Co, Asia's largest paint manufacturer, wants sales to increase by 20% to 12 billion baht this year, driven by a strategic focus on the recovering condo market and building renovation sector.
Watchara Siriritthichai, the company's general manager, said this shift aims to mitigate the impact of last year's slowdown in the low-rise housing market.
To achieve 12 billion baht in sales, Nippon is focusing on two areas: the recovering condo market and building renovation, as many ageing buildings are in need of upgrades, including those seeking green building certifications.
"Painting costs for low-rise houses typically break down to 70% labour and 30% paint. For high-rise buildings, labour costs are even higher," said Mr Watchara.
He said that investing in high-quality paint is more cost-effective in the long run.
"Frequent repainting isn't economical as labour and not the paint makes up the bulk of the cost," said Mr Watchara.
To further drive growth, Nippon Paint plans to launch new products with extreme durability and energy-saving properties. These paints reflect sunlight, reducing heat absorption on building exteriors and lowering energy consumption.
"Paint can be a tool for corporates to achieve their ESG [environmental, social and governance] goals," Mr Watchara said. "High-quality paint reduces the need for frequent repainting, which in turn helps lower carbon emissions. Since paint is made from acrylic, derived from fossil fuels, using less paint also reduces fossil fuel consumption."
The market outlook remains challenging this year, with expectations of either flat growth or a continued decline, given the limited pipeline of new construction projects.
"The construction materials business usually mirrors the residential market," Mr Watchara explained.
"When the residential sector performs well or faces challenges, the construction materials market follows suit the following year. This year, we're seeing the effects of last year's market slowdown."
He said that signs of a sluggish economy emerged as early as the first quarter of 2024, with weak demand from local homebuyers. By the second half of the year, the housing market downturn became more evident, particularly for developers.
The decline was attributed to tighter bank lending policies, rising household debt, and weak consumer confidence.
"The new supply of low-rise housing is expected to drop by 40-50% this year, compared to just a 15% decline during the Covid years," said Mr Watchara.
The overall paint market, valued at 40-50 billion baht annually, contracted last year by 7-8% due to a lack of new building projects and weak demand in the automotive industry.
Nippon Paint reported sales of 10 billion baht last year, a 10% year-on-year increase, though short of its initial 25% growth target.
