Africa

population of 140 million people, pres-
ents a large, attractive market for com-
panies seeking to grow their footprint
across borders.”
Despite Crown Paints being the mar-
ket leader in East Africa, the region’s
Common Market has ensured no paint
manufacturer turns into a monopoly.

Opening up the region to free trade and the harmonization of trade policies has seen other paint companies in East Africa, especially Sadolin, Basco Paints, Solai Paints and Glory Paints, compete for a share of the paints industry market under the region’s single market, which analysts say tends to be competitive and averts existence of monopolies.

Crown Paints said in an earlier re-
port that a number of Kenyan companies
“have spotted this huge opportunity and
spread their wings into the region.”
“Crown Paints belongs to this
league of regional players having al-
ready established a presence in Kenya,
Uganda and Tanzania,” the company
said. It has outlets in Rwanda, South
Sudan and Burundi.

However, the paint maker said re-
gional expansion “does not come cheap”
adding that the “cost of putting up a large
factory runs into millions of dollars.”
“To surmount this challenge, Crown
Paints, has adopted a cost-effective model
that entails setting up mini-plants across
the region to meet the growing demand
for its products,” said the company which
had as its core strategy the setting up of
at least three mini-plants in Tanzania,
Uganda and Rwanda at $3 million.

In 2013 as the Common Market
continued to evolve, Crown Paints an-
nounced a 46 percent increase in pre-tax
profits which it said was “buoyed by im-
proved cash flow from operations, prod-
uct innovations and expansion into the
East African region.”
The single market has also helped ef-
ficiently run companies in East Africa to
reap the fruits of economies of scale, in-
creased competitiveness and lower costs.

With the integration of the East
African market, paint and coating com-
panies have not only competed on prod-
uct pricing but have recently introduced
new, high quality, environmentally
sensitive and affordable decorative, auto-
motive and industrial paints in addition
to intermediate products, road markings,
thinners and adhesives.

Basco Paints has also been looking forward to taking advantage of the opportunities that come with the East

Africa Common Market with the com-
pany managing director Kamlesh Shah
indicating last year the company looked
forward to “extend our operations in
Eastern Africa to help in the distribution
of our wide range of paints both in exist-
ing and new markets.”
“We have identified growing oppor-
tunities in these countries where in some,
we operate depots and the establishment
of new plants will play a key role in dis-
tributing our products,” he said.

The company, which has been operating in the region since 1976, manufactures various paints and paint related products such as internal and external paints, specialized and textured paint finishes, roof paints, floor paints and wood varnishes.

Four of the EAC countries, Kenya, Uganda, Rwanda and Burundi, are also members of the Common Market for Eastern and Southern Africa (Comesa) trading bloc, which seeks to achieve a fully integrated, competitive and unified single economic bloc of 18 countries.

The economic bloc is also finaliz-
ing contentious issues that stand on the
way to free movement of goods, services,
capital and labor. Comesa also hopes
to remove all physical, technical, fiscal
and monetary barriers to intra-regional
trade and commercial exchanges. This
is likely to give additional opportunities
for paint makers in East Africa, now ben-
efitting from the EAC Common Market,
to expand to countries such as Zambia,
Zimbabwe, Comoros, Democratic
Republic of Congo, Ethiopia, Sudan,
Mauritius, Malawi, Swaziland, Seychelles,
Libya, Eritrea, Djibouti and Egypt.
Comesa’s secretariat said member
countries are also seeking to achieve low-
er tariffs when it comes to intra-regional
trade that originates in member countries.

Although Comesa members are pushing for the elimination of tariffs on goods from other member-States, the countries will be allowed to apply their own regime of tariffs to goods imported from outside the Comesa region.

When fully operational, the Comesa Common Market like that of the EAC, will facilitate free movement of capital and labor, harmonized trade, exchange rate, fiscal and monetary policies, internal exchange rate stability and full internal convertibility.

Sadolin was recently a beneficiary of the EAC Common Market when the EAC

Council of Ministers approved the com-
pany’s importation of acrylic polymers
and alkyed resins in their primary format
zero percent for the making of paints.
“In the event these goods are sold in
the Customs territory (EAC) they shall at-
tract duties, levies and other charges pro-
vided for in the EAC Common External
Tariff,” the minister said. CW
Crown Paints, which has an estimated 6. 5