MARKET: The prospects for a safe Covid-19 vaccine has excited the property market with paint makers projecting their fortunes to bounce back in the first half of this year.
Crown Paints chief executive Rakesh Rao exuded confidence the construction industry will rebound in the medium-term and spiral demand for paint.
Already, the construction sector is picking up the pieces from the crippling Covid-19 economic fallout with more investors pumping in cash to complete stalled projects.
Rao is also upbeat that return to normalcy after coronavirus restrictions coupled with the release of a vaccine this year will trigger a wave of renovations for businesses that had closed.
“This will create a lot of demand for paint, especially given that our supply to commercial entities had declined at the height of the pandemic compared to the residential segment,” he said yesterday in a telephone interview.
In the second quarter of 2020, residential units gobbled up about 90 per cent of all the paints sold in Kenya against just over 10 per cent that goes toward commercial application.
But this is expected to change according to Rao as the pandemic is slowly brought under control, especially now that a vaccine is on the horizon.
“Although widespread vaccination is still way off, the news alone is a good sign that the building industry will continue to recover as the prospect of vaccines becomes more realistic,” he added.
A mix of legacy drug makers and small startups including Pfizer have recently stepped up plans to develop vaccines or treatments that target the infection caused by the novel coronavirus, sending joy in the stocks market.
Investors who have been skeptical about the economic recovery and hoarded cash are now more confident about a post-corona outlook.
Rao further said that the containment of the virus will help claw back some of the huge declines the sector has suffered during the pandemic.
Crown controls an estimated 65 per cent of the Kenyan market and is the only paint company listed on the Nairobi Securities Exchange.
Before the pandemic, the combined Kenyan and Tanzanian decorative paints and coatings market was projected to achieve a CAGR of 6.7 per cent by 2020, according to Frost & Sullivan’s Decorative Paints and Coatings Market for Kenya and Tanzania, Forecast to 2020.
This was to be driven by urban migration, supportive government policies, and a movement towards cleaner technology.
Water-based paints are expected to account for 64.7 per cent of the market, and solvent-based paints for the remaining 35.3 per cent.