““We have to review our prices upwards in order to avoid losses as the exchange rates have dented our profits,” said Mr Nashir Kassam, the firm’s GM.
The shilling has lost 28% of its value since January, battered by double-digit inflation, touching a record low of 104.15 to the dollar on Tuesday.
Basco Paints, the makers of Duracoat and Basco paint, said they are looking at the direction the shilling will take in the next couple of days in order to determine the margin.
“We’ll increase prices next month but are looking at the direction of the shilling versus the dollar to determine the margin,” said Mr Kamlesh Shah, the company’s MD.
The weakening shilling has greatly dented the profits of paint makers who have to import more than 70% of their raw materials including titanium oxide, resin and oil.
Titanium dioxide and oil-based products – which account for about 60% of paint manufacturer’s production costs have risen sharply in the past one year on increased demand for the commodities in the international market.
On their part, Crown Paints said they will absorb the cost in view that another review of prices could make their products unaffordable.
“We are concerned about our consumption levels and do not want to push the prices beyond consumers’ reach,” said Mr Rakesh Rao, the firm’s managing director.
Crown Paints have reviewed their prices upwards twice this year – 10% in April and 7.5% in August. The retail price of a 4-litre gallon of premium paint is about Sh2,180 from Sh1,750 in January.
The rising cost of paint and other construction materials could give impetus to the price bubble in the property market pushing the prices of homes beyond the reach of many Kenyans. Paint costs accounts for 2-4% of the final construction costs.
EDITOR'S NOTE: Read the latest issue of Construction Business Review. Flip through the pages of the paper real-time or download a copy to read offline. Sign up for a FREE subscription to get the paper delivered to your inbox every month.