“Paints market in Egypt is highly fragmented,” says SCIB Paints
“SCIB Paints is the number two player in the Decorative coatings industry in Egypt which comprises architectural coatings and wood coatings. What we would like to do is make SCIB the most loved paint brand in the next few years. Asian Paints is amongst the top five Decorative coating companies in the world.”
Interview with Manish Mehra, Regional Head – Middle East and Egypt of Asian Paints (SCIB Paints)
Let’s start first of all with your evaluation of the paints industry in Egypt.
The paints industry definitely has long term potential with the kind of construction which is happening now in the country and with the large and growing population. With every marriage you need a house so it has got good long term potential. However, the prospects in the medium term are not very attractive.
Why is that so?
The reason is that there has been a crisis in terms of availability of US dollars to purchase raw materials and most of the raw materials are imported. So all the companies have to import raw materials and in the last two years the availability of foreign currency has become an issue. This has led to pressure on the bottom line of all companies. That is why new investments which will be made by companies will be under pressure.
Talking about Asian Paints and SCIB, what is your position within the market? What is your market share? I know you are in the interior paint decorating industry?
SCIB Paints is the number two player in the Decorative coatings industry in Egypt which comprises architectural coatings and wood coatings.
Prior to the interview you described the paints market in Egypt as very competitive but fragmented.
It’s a highly fragmented market and it is dominated by the preferences of painters. Painters prefer different products from different companies. For example, a typical house would be decorated using paints from different companies. The painter could buy Emulsion white from one company and colours for walls, doors, windows from other companies. It’s a challenge for any company to build up market shares across product categories.
We know that Asian Paints has a partnership with a local company (United Holding Company) but as we can see on your business card, you also represent other brands. Could talk about this?
Asian Paints is amongst the top five Decorative coating companies in the world and it has a presence in various countries in South Asia, the Middle East, the Caribbean and the South Pacific. In different markets, it is a different brand as we typically we do not change the brand when we enter a country. We continue to use SCIB as the brand in Egypt since we entered the country in 2002.
What made you consider Egypt?
What we would like to do is make SCIB the most loved paint brand in the next few years.
Egypt is the largest country in the Arab world in terms of population. Of course when we chose Egypt, it was going through a stable period in terms of the political climate and the economy was also growing.
How do you differentiate yourself from your competitors? Is it in terms of the products or the service you provide with your products? You also mentioned the campaign ‘Starts with you’.
The first thing is, it is not easy to differentiate because the paint is still bought by the painters but where we try and differentiate is in terms of the service for our customers. We define our customers as our dealers. We have almost 1500 customers. 500 of whom have tinting machines. They are called Colourworlds and the other 1000 are for retail which means they do not have a SCIB tinting machine. We have a team of around 70 sales personnel who service these customers on a regular basis in terms of taking their orders, understanding their issues, resolving them in a timely manner, handling complaints and talking about our new products. So these are our key strengths and we have 10 warehouses all over Egypt.
In terms of service level, in terms of availability of material we maintain over 95% of availability of materials. So when a dealer places an order, most of the time he gets it within a few hours. That’s the first thing. Second, is of course in the area of how to create the pull from the consumer’s side. There we are building slowly but steadily and last year we have started to take steps towards building SCIB in the digital space which means carrying on with digital campaigns, whether it’s on Facebook or whether it’s advertising on the banners of some websites such as “American Chamber”. We have also added resources to our marketing team to look at this. This will only increase in the future. We want to spend money on SCIB as a brand in the digital space, as the number of Egyptians using social media has really gone up after the Revolution. Egypt is amongst the top 5 countries using social media so we want to capitalise on that.
Third thing we are doing is building some premium brands like Royale in the Luxury Emulsions’ category, where we are the market leaders in Egypt. We will also build a premium brand in the Exteriors – under the name Weathercoat. We will build these brands strongly in the future so that it will have a positive rub-off on the image of SCIB
With Asian Paints or maybe as well with SCIB, would you like to reach out to new markets?
Yes, we are looking at markets in North Africa and also in the near Middle East. We always evaluate the markets carefully before making any investment decision.
Lastly, what would be your vision for the company – where would you like to see it in a few years’ time?
Our vision is to make SCIB the leading paint company in Egypt.
And apart from that are there any other special visions?
What we would like to do is make SCIB the most loved paint brand in the next few years.
Now the very last thing, what is your personal feeling now talking about the developments in the past month? Where do you see Egypt heading?
Currently it is in a situation of stalemate. A large number of ambitious projects have been announced in order to send the message to the outside world to come and invest in Egypt. These include the Suez Canal project and the housing projects in collaboration with Arabtec.
However, on the ground still the sentiment has to turn positive as far as the common man is concerned, as for him, the cost of living is still high. The creation of jobs is still not happening to the extent it should be happening. Both the rate of inflation as well as unemployment have been running in double digits for most part of last year. The foreign exchange reserves are also under pressure so with all this happening it is at a stalemate. Due to the current situation, the medium-term prospects can only improve from what it is today.
When the uptake happens, and at what pace it happens, it is difficult to say. We are here for the long term as we have invested and we have two factories here. We have the largest capacity in Egypt in terms of production volumes and we have a good set of people and good customers so we believe in all of this and we are here for the long haul.
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