Crown Paints has warned that prices of paints, which have already inched up since last year, will go up seven per cent this year if raw material prices do not get cheaper, a move that is likely to see other manufacturers following suit.
Chief executive Rakesh Rao said the company is currently contending with rising cost of raw materials, particularly titanium dioxide – which is a key raw material for production of the firm’s premium paints.
“We used to buy titanium dioxide at $2,000 (Sh206,000) per tonne, now we are buying at $3,600 (Sh370,800) per tonne. We have no option but probably to increase the prices,” Mr Rao said Friday while outlining the firm’s 2018 strategy.
Globally, raw materials like monomers and titanium dioxide, which accounts for nearly 20 per cent of the total purchase basket of a paint company, have been on the rise since the beginning of 2017 due to a shutdown of large manufacturing plants in Europe and China over ecological concerns.
The price hikes are set to add financial pressure on builders who are already struggling with rising construction costs considering that painting accounts for a substantial portion of a project’s total budget.
A seven per cent raise will see the price of a 20-litre gallon of the Crown Permacote Ultra Guard, which retails at Sh14,595, shooting up by Sh1,021. A four-litre can of the same brand, which retails at Sh2,919, will rise by Sh204; while a litre of the paint will increase by Sh62 from Sh893.
Builder of low cost houses are, however, reassured by news that Crown Paints is finalising plans to introduce a new range of paints targeting the low cost housing sector which has witnessed exponential growth over the past few years.
“We have done a market survey and the response is very positive,” Mr Rao said, adding that the new range of paints will be priced lower than prevailing products.
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