Market report: Industrial paints in Pakistan

The second largest paint and coatings market in South Asia, Pakistan’s coating market has been through ups and downs during the previous five years. Here, Yogender Malik reports for PPCJ on the country’s industrial coatings market and the major players in the industry

Economic woes, political instability and unprecedented floods in 2022 have been major destabilising factors behind the low growth figures of the Pakistani paint and coating industry over the last few years. Much like the country’s architectural segment, the industrial segment was impacted by above mentioned factors in a major way. 

Estimated to be in the range of US$145-155 million, Pakistan’s industrial coating segment is very small in comparison to the segment in other countries of similar (or even smaller) size. In fact, it is very small in comparision to country’s architectural segment.

Although currently Pakistan’s industrial segment is quite small, highly favourable demographic factors indicate for a bright future of industrial paints in Pakistan. With a population of nearly 240 million at the end of 2023 (according to the World Bank), Pakistan is among the top 10 most populated countries on the globe.

Tepid economic growth is also one of the factors that has limited the growth in the industrial coating sector in the country. After a commendable period of uninterrupted growth for almost five decades, Pakistan’s economy is undergoing its toughest period due to a series of shocks, such as COVID-19, the 2022 catastrophic floods and adverse global conditions. After contracting in 2023, growth in Pakistan is projected to rebound to 2% in 2024, supported by growth in industrial segment.

Besides economic growth, other macroeconomic factors have also posed severe challenges for Pakistan’s coating producers in the industrial segment. For example, the inflation rate skyrocketed to 39.18% in 2023. Additionally, Pakistan witnessed a depreciation of its currency by more than 20% in 2023.

Key sectors and players in the market

The automotive segment, the largest contributing sub-segment in the industrial segment, is going through severe challenges. Three major automotive companies in Pakistan announced a halt in automotive production in 2023 due to various reasons. Honda Atlas Cars, Pak Suzuki Motor Company, and Indus Motor Company opted for production stoppage for different periods in the concluded year. This had an adverse impact on automotive coating consumptions in the country.

A key executive from Nippon Paints Pakistan told PPCJ on the condition of anonymity, “The shutdown by some of the leading Pakistani carmakers highlights a broader issue that has been impacting Pakistan’s automotive industry for some time. Shortages in inventory levels have led to these temporary shutdowns in the auto industry. However, from an automotive coating point of view, domestic capacity is enough to meet the entire OEM demand. It is also true that in some instances, automotive coatings from their parent countries is preferred by the joint venture partners of Pakistani automotive producers.”

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He further added, “Growth in overall paint and coatings industry has not been very impressive during the last four years, but we are optimistic about the future growth of the industrial segment. In this segment, Nippon Pakistan has supplied nearly 60% of the protective coating requirements of Lucky Coal 550 MW power plant in Port Qasim, Karachi.”

The company supplies automotive products (both OEM and refinishes) from its Lahore-based facility, which has been operating since 2009. Nippon Paints has been supplying automotive coatings to Atlas Honda Cars Pakistan since 2014. The company has been working with Indus Motor Company since 2021. Lucky KIA Motors is another major customer in automotive (OEM) segment. 

Earlier this year, AkzoNobel made a significant investment to cater to the industrial segment of Pakistan’s coatings industry. The company opened a new US$29 million manufacturing plant in Faisalabad. Faisalabad is AkzoNobel’s largest investment in Pakistan to date. The 25 acres integrated facility produces paint, wood finishes and coatings including automotive and speciality, coil and protective coatings. The plant aims to meet the increasing customer demand across B2B segments, such as architecture, automotive vehicle refinishes, electronic components, furniture, domestic appliances, sports equipment, construction, power, steel and infrastructure.

The new manufacturing plant is designed to accommodate future expansion in production volumes, thereby allowing the Dutch company to be more competitive in the market.

“Since 2020, AkzoNobel has been consolidating its position in the Pakistan market. The new manufacturing facility at Faisalabad is the next step to grow on our strong foundation. Our investment in this greenfield site reaffirms our commitment to grow in Pakistan,” said Mubbasher Omar, chief executive officer, AkzoNobel Pakistan. “It will fuel our ambition to diversify with sustainable innovations and enter new segments in the domestic market, while also providing new opportunities to delight customers beyond Pakistan.”

Leading multinational coating producer in the industrial segment, Jotun set up a powder coating plat in Lahore in 2004 to cater to this segment. This facility caters to appliances, pipelines and general industrial sub-segments.

The company later opened a decorative paints plant in Lahore in 2008. In addition to these two facilities, Jotun Pakistan imports paint and coatings products from its Dubai-based production facility.

Smaller domestic producers also play an important role in the industrial coating segment. Other than automotive coatings, these producers produce coatings for most of the sub-segments of industrial applications.

Future prospects

A number of factors are expected to play a key role in the future growth of the industrial paint and coatings industry in the country. Most important among these are the huge population and steady population growth rate (Pakistan’s population growth rate at 2.6% is highest in the whole of South Asia); a massive growth prospect for the automotive industry and industrial sector.