KATHMANDU, Aug 1: Nepal´s paint industry did not see any growth in terms of volume in the last fiscal year due to ongoing slowdown in housing and real estate sector.
According to Nepal Paint Manufacturers´ Association, domestic paints industry, which was growing at the rate of 10 to 15 percent until the 2010/11, remained almost stagnant in 2011/12.
“This is the first time that the industry did not post any growth,” said Bishwo Saakha, president of the association.
Saakha, however, said slowdown in sales volume did not affect turnover of paint manufacturers as they had raised prices of points two times during the year.
Manufacturers said they had to revise paints prices upwards mainly due to increase in price of raw materials, rise in price of petroleum products and strengthening of US dollar against Nepali currency.
Paints had become expensive by around 20 percent in the last fiscal year.
Budhaditya Mukherjee, director of Asian Paints Nepal, said sales of Asian Paints increased during the review period but growth rate went down compared to past year. “Until 2010/11, market of paints was growing by 30 to 35 percent. But growth went down to around 20 to 25 percent in 2011/12,” added Mukherjee.
Nandan Adhikari, proprietor of Color Spa - the authorized dealer of Asian Paints, said demand for paints decreased by around 15 percent in 2010/11. “However, turnover of manufacturers increased due to increase in prices. Also, dealers purchased paints from manufacturers to meet their sales targets even though they have to keep it in their warehouse,” said Adhikari.
Paint manufacturers say demand for paints went down in the Valley in the last fiscal year. They, however, said demand has slightly improved in cities outside the Valley and rural areas thanks to increasing remittance flow.
Abhishek Murarka, director of Pashupati Paints, also said growth rate has fallen. “Our turnover used to increase by 12 to 15 in the past. This year we saw growth of 5 to 7 percent only that too due to rise in prices and not because of sales increment,”