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Jitsiree Thongnoi reports from Bangkok on Thailand’s paint sector and how the industry remains steady as the economy gains traction.
The Thailand paint and coatings sector is expanding faster than general economic growth in Thailand, expanding sales as the country transitions from military-dominated to democratic rule.
This south east Asian powerhouse economy is projected to grow GDP by 3.9% in 2023, up from 2.6% last year due to stronger-than-expected export demand from China, Europe and the United States, according to the World Bank [1].
Thailand’s ministry of commerce has maintained a targeted yr-on-yr growth for exports this year of 1%-2%, after a 5.5% gain in 2022 [2]. This comes as Thailand’s parliament was poised to appoint a democratically-elected Prime Minister in July, after eight years of military-backed governments.
Sarawut Rachanakul, President of the Thai Paint Manufacturers Association, has a positive outlook for the future of his industry: “The country has a well-established paint manufacturing industry and has been able to capture export markets in various regions,” he told PPCJ.
“Factors contributing to Thailand’s export success in the paint industry include competitive pricing, quality products, favourable trade agreements and efficient logistics networks,” he said, speaking, for instance, as the European Union (EU) negotiates a trade deal with his country.
Domestic sales have also been expanding, despite an increase in input costs, said Rachanakul, (Thailand’s overall inflation rate is moderate, at 2.67% in April 2023). The association President estimated that the average Thailand domestic paint and coatings sales revenues for 2022 rose by 10%-15% yr-on- yr, and are projected to rise at least 5%-10% this year (2023). This is impressive given Rachanakul said that during the past year, the Thai paint industry has faced higher chemical and logistic costs, increasing by around 20%, which had led to higher retail prices.
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Fortunately, chemical costs have recently stabilised, helping the association project domestic sales growth for this year.
According to Germany-based statistical service Statista, revenue in Thailand’s paint, wallpaper and associated decorative supplies market were US$980M in 2023, with a projected compound annual growth rate (CAGR) of 1.67% from 2023 to 2028 [3].
Meanwhile, the Thai paint and coating industry’s exports performance has been mixed, according to market research group ReportLinker, being predicted to reach close to 94,000kg by 2026, decreasing by 0.5% yr-on-yr on average since 2005. In 2021, Thai paint exports were 94,870kg, making the country the world’s 33rd largest exporter [4].
That said, it is the domestic market that counts for the Thailand paint and coating industry, said Rachanakul. “The export of Thai paint products are mostly to the [nearby] CLMV (Cambodia-Laos-Myanmar-Vietnam) countries,” said Rachanakul.
“But Thailand has the biggest consumption [compared to those countries]. For example, Vietnam’s paint consumption is about 50%-60% compared to Thai consumption and Myanmar is about 30% in comparison to Thai consumption,” he told PPCJ.
This growth has withstood the disruption to demand wrought by the global COVID-19 pandemic, which had a comparatively mild impact on Thailand, with just 490 deaths per million people by July (2023) [5]. Nonetheless, the country’s building and construction industry was hit hard by travel restrictions, which hammered Thailand’s crucial tourism sector, with commensurate reductions in household income in 2020 and 2021, which are now being restored as standard travel patterns resume.
Major players and market trends
Indeed, one of the country’s major paint and coating players, Nippon Paint Decorative Coatings Thailand, reported a record sale in 2022, growing by more than 30% yr-on-yr thanks to the country’s reopening and increasing tourism and the growth of the property sector, especially in the second half of 2022 [6]. The company expects a 25% growth in 2023, estimating that the Thai paint market will expand by 10%, at the top end of Thai Paint Manufacturers Association growth projections. According to Thailand investor advisors TraderKP [7], this growth in sales saw Nippon Paint secure the second largest sales in the Thai paint market in 2022, at THB6bn (US$170M), ahead of Dulux (AkzoNobel) THB4.9bn (US$139M), Berger THB4.4bn (US$125M) and Jotun THB3.8bn (US$108M). Nippon only lagged TOA Paint (Thailand) Public Company Ltd, a major paint manufacturer of decorative and non-decorative paint and coating products, and the largest domestically-owned player, at THB20bn (US$569M) (8), 17.5% up from the previous year.
Nippon Paint Decorative Coatings Thailand, reported a record sale in 2022, growing by more than 30% yr-on-yr thanks to the country’s reopening and increasing tourism and the growth of the property sector, especially in the second half of 2022.
Looking at market trends, Rachanakul said in the private consumer segment, demand was rising in Thailand for more health-conscious products. TOA has been paying heed [9]. Last year (2022), it launched TOA Organic Care, a plant-based decorative paint and coating for interior use, providing “the highest safety for users, residents and environment”, according to a company note [10]. The company stressed the product has been certified ‘BioPreferred’ by the US Department of Agriculture (USDA); this could increase export sales to the USA as well as underlining its sustainability credentials to domestic consumers.
TOA Paint has also been targeting the construction sector, which has been undertaking a flurry of post-COVID projects in Thailand. The country’s reopening from 2021 has accelerated demands for construction materials such as paint and coatings for renovations of resorts and hotels for tourists. There has also been a spate of home repairs following major flooding across the country in October 2021.
TOA Paint’s subsidiary Incosource opened its first branch of ‘FIX & BUILD’, a franchise-store business model distributing integrated construction materials for contractors, last August (2022).
Another company tapping increase sustainability requirements is JBP International Paint, Thailand, a major industrial paint and coatings manufacturer and distributor, where Rachanakul is a CEO. It announced a new line of sustainable products in March.
The JBP Good Paint Re-Acrylic [11] is a recycled paint, whose production is designed to reduce the impact of paints and coatings on the Thai environment under the circular economy model, taking returned paints or remaining paint stocks facing expiry into an advanced paint recycling process. The goal is to produce a sustainable product sold in paint pots made from 100% recycled plastic. The company said it wanted to focus on “elevating the quality of life and reducing the impact on the environment as well as promoting wise use of natural resources in order to achieve environmental sustainability” [12].
The popularity of natural themes also extends to paint tones. The Netherlands-based major AkzoNobel, which distributes in Thailand under the Dulux brand, has announced that it was promoting natural paint shades captured positivity and reduced anxiety for Thai homeowners [13]. One new paint colour has been ‘Wild Wonder’, a soft mustard hue that the company said brings calmness to anyone within a room with this coating.
One new paint colour has been ‘Wild Wonder’, a soft mustard hue that the company said brings positivity and energy to anyone within a room with this coating.
Such sustainability innovations and sensitivity in design should put the Thai paint sector in good stead as it profits from the continued post-COVID economic expansion in a democratising Thailand.
References
2 – https://tradingeconomics.com/thailand/exports
3 – https://www.statista.com/outlook/cmo/diy-hardware-store/paint-wallpaper-supplies/thailand
4 – https://www.reportlinker.com/clp/country/10379/726412
5 – https://www.worldometers.info/coronavirus/
6 – https://www.nationthailand.com/pr-news/more/pr-news/40025128
7 – https://traderkp.com/2023/06/26/
8 – https://toa.listedcompany.com/misc/flipbook/index.html?id=266073
9 – https://www.marketscreener.com/quote/stock/TOA-PAINT-THAILAND-39134450/
10 – https://www.toagroup.com/en/about-toa/company-info/company-history-and-development
12 – https://www.glitzmagazines.com/?p=38116
13 – https://www.duluxtradepaintexpert.co.uk/en/content/dulux-colour-of-the-year-2023
