Rapid growth, construction boom help paint industry shine
In spite of the challenges faced by the paint industry in amid the pandemic, recent years have seen notable progress, with five to six paint companies having made significant investments and expanding their workforce
The growing population and swift urbanisation in Bangladesh have bestowed numerous advantages upon domestic paint manufacturers. As a result, the market has seen remarkable growth, currently valued at nearly Tk5,000 crore.
In spite of the challenges faced by the paint industry in 2019 and 2020, the recent years have seen notable progress. Five to six paint companies have made significant investments and expanded their workforce. This forward-looking approach, even in the midst of economic downturns, reflects their optimism for a promising future.
The inception of this industry traces its roots to the 1950s when a few pioneering companies embarked on their operations. Today, it serves as a testament to the nation's rapid development, notably in the construction and housing sectors, alongside the surge in megaprojects.
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Annual paint consumption in the country is now over 180,000 tonnes. Due to the significant population and urbanisation in the country, this sector has been growing at a rate of 10% annually over the past decade.
Economic growth and urbanisation, a blessing for the industry
The emergence of Bangladesh's paint industry can be closely tied to the country's economic growth and urbanisation over the decades. As the nation transitioned from an agrarian economy to an industrialised one, the demand for construction and housing skyrocketed. This period saw the establishment of various industries and factories, leading to an increase in commercial and residential spaces.
According to data from the Bangladesh Bureau of Statistics (BBS), by the end of 2020, 22% of the country's population had achieved middle-class status, marking a significant increase from 12% in 2010, totalling 3.60 crore individuals.
As per the findings by the Boston Consulting Group, the middle class in Bangladesh is expanding at a rate of 20 lakh people per year. Consequently, by the year 2025, the middle-class segment of the population is projected to reach 25% of the total population.
Conversely, as of the end of 2022, the urban population has surged to 39%. Various studies indicate that this figure is expected to reach 50% by 2030.
Experts believe that the continuous growth in both middle-class and urban populations is serving as a catalyst for the expansion of the housing sector and the subsequent rise of the paint industry. Notably, the real estate and housing sector accounts for a significant 70% of the country's paint purchasers.
Kamal Mahmud, vice president of the Real Estate and Housing Association of Bangladesh (REHAB), envisions a promising future for the real estate and paint sectors. He believes that the growing middle-class population and the steady expansion of urban areas will serve as pivotal catalysts for driving growth in these industries.
The boom of the furniture industry has also played a significant role in the growth of the paint industry. From cities to rural areas, around one lakh furniture makers regularly use paint.
Selim H Rahman, chairman of Bangladesh Furniture Industries Owners Association and managing director of Hatil, told The Business Standard that almost all furniture requires the use of paint.
"However, not all furniture is made using domestic paint — about 40% of it needs to be imported. We procure more than Tk500 crore worth of paint from local producers," he added.
Megaprojects also fueling growth
Megaprojects have emerged as a key driving force behind the flourishing paint industry. Remarkable infrastructure initiatives such as the Padma Bridge, Dhaka Metro Rail, and the Rooppur Nuclear Power Plant have opened up vast avenues for the paint sector.
These monumental endeavours demanded substantial volumes of specialised coatings, spanning from corrosion-resistant paints for bridges to fire-resistant coatings for power plants. Capitalising on this opportunity, domestic paint manufacturers experienced a notable upswing in production and innovation.
Rainbow Paints, a brand of RFL Group, has set up a new production line to work on megaprojects.
RN Paul, managing director of RFL Group, said they have worked on marking and levelling on several megaprojects, including the Padma Bridge and Metro Rail.
"For this purpose, we have established international standard production lines. The demand for housing is increasing across the country, leading to significant growth in the paint industry," he added.
Paul said the government's push for urban development and housing projects has caused the demand for paint products to surge. "The vibrant colours of progress have adorned countless buildings, becoming an integral part of the nation's landscape."
A journey of resilience
Originating in the 1950s, the paint sector in Bangladesh has evolved into a significant player in the nation's economy, painting a brighter future with each stroke of innovation.
The roots of Bangladesh's paint industry can be traced back to the pre-independence era. The formal journey of the first painting company in Bangladesh began in 1952, with Elite Paints taking the lead. Just a year later, Roxy Paints entered the painting industry. Following that, various domestic and international painting companies embarked on their ventures in Bangladesh, one after another.
As the nation gained sovereignty in 1971, it embarked on a journey towards self-sufficiency and economic development. This quest for progress prompted the growth of various industries, including the paint sector.
Over the decades, the size of the paint market in Bangladesh witnessed exponential growth. What began as a niche industry in the 1950s evolved into a thriving sector contributing significantly to the national economy. The market has not only expanded in terms of volume but also in the variety of products and technologies available.
The number of paint companies in Bangladesh has also increased substantially. From a few pioneering entities, the industry now boasts a competitive landscape with both local and international players. This competition has driven innovation and quality improvements, benefiting consumers and the overall industry.
At present, there are approximately 40 paint companies operating in Bangladesh.
New investment for further growth
As companies vie for market share, consumers are benefiting from a broader range of paint products. The industry's responsiveness to customer needs, including environmental concerns, has resulted in the development of eco-friendly and sustainable paint options. This dynamic ecosystem continues to evolve, catering to a diverse array of consumer preferences.
Asian Paints India's subsidiary, Asian Paints Bangladesh Limited, holds the second-largest market share in the country, with 18%. Their paint factory is located in Gazipur near Dhaka. Furthermore, in 2020, they started construction work on their second factory at Bangabandhu Industrial City in Mirsarai, where they are investing around 1,700 million Bangladeshi Taka to double their production capacity.
Looking ahead, the future of the paint industry in Bangladesh remains exceptionally promising. Historically, the paint industry has grown in tandem with the nation's economy. As Bangladesh continues to embrace its role in the global market and solidify its position as a hub for manufacturing, the demand for paint will naturally escalate.
"With ongoing infrastructure projects, housing developments, and a burgeoning middle class, the country's paint industry is well-poised for robust expansion," said Rajesh Sircar, deputy general manager at Nippon Paint Bangladesh – a Japan-based coating company.
