He also indicated the rise of competition
in Russia.
“I fully agree [with Tsentrlak state-ment] competition is getting more tough
due to big number of paint producers,
doesn’t matter are they local or foreign.
Local players have some certain benefits
especially in the economy segment but
Tikkurila, as a market leader, is in a lucky
situation having wide range of products for all quality and price segments,”
Hyyrynen stated, adding that market
is going through number of structural
changes as well.
According to him, in the Russian paint
and coatings market general trend seems
to be downgrading of purchase behavior.
People are looking for more price sensitive products than in the past years when
economy was rapidly growing. That kind
of trend and consumer behavior is very
much usual in all economies facing economic challenges.
“At the same time we can see positive trends on the market. For example,
the substitution of solventborne materials by waterborne is going further. This
is a good sign for Russia due to ecological reasons and the impact on the health
of the end-users. As an international
company, Tikkurila is always promoting
high-quality and environmentally sustainable solutions for surface protection
and decoration. We are happy to see such
trend on the market even in crisis years,”
Hyyrynen concluded.
As one of the issues of recent years
he also named the practice where some
competitors are utilizing Tikkurila’s well-known product names and naming their
products very closely/similarly. However,
according to Hyyrynen this does not bring
the company a lot of problems, as it mostly shows the power of its brand portfolio.
AkzoNobel indicates
potential of local market
According to the general manager of the
Russian division of AkzoNobel, Mikhail
Ionov, the crisis brought some effect on
the situation in the country’s market, but
still it has been limited.
“Just as any other sensible companies
we have been forced to lay part of the
devaluation risks on consumers, where
it was possible. This is standard business
thinking, but where it was impossible we
were making advances to customers in
terms of price,” Ionov said.
He also indicated that in Russia,
AkzoNobel currently operates three
plants: two in Moscow Oblast and one
in Lipetsk Oblast. The overall capacity of
decorative painting is 10,000 tons, while
for powder coatings it is close to 8,000
tons per year.
He also admitted some problems with
raw materials, as with the poor development of the Russian chemistry industry
on some certain positions company has
to import up to 100 percent of raw materials for coating production from abroad.
“This year we are planning some expansion [of production capacities] with
opening of line for production of marine
coatings. This will be coatings for all
sorts of ships and complex metal structures, oil barrels and large plant com-plexes. We are targeting to open it this
year,” Ionov stated.
In additional, he indicated that Russian
market has a low level of coatings use per
capita and most manufacturers believe as
a result the market has strong potential.
This is particular evidenced by the projects of PPG and Hempel.
“These [projects] indicate that foreign
companies see good potential in Russian
coating industry as there will be a lot of
place to grow and compete here,”Ionov
added.
Ionov didn’t agree fully with Tsentrlak
on the rise of competition from domestic
coatings manufacturers, indicating that
so far Russian producers has low level of
technological base.
“Somehow and from somewhere they
are buying unstable raw materials and
trying to make some [coating] underground to sell it under someone else’s
brand. Certainly, it is the damage to
the brand, but if they do it under their
own names, than these companies has
not very bright future, because of quality. Large companies can not afford such
high reputation risks. We will be more
expensive, but still we have our own customers,” he concluded. CW
Tikkurila produces a full range of deco and insustrial coatings in Russia. The target is to localize more and more production and raw material purchases to Russia.
