Russia
October 2016 www.coatingsworld.com Coatings World | 37
The Kazakhstan
coatings market
is divided among
15 manufacturers,
who in total
account for 50
percent of the
overall market.
Kazakhstan Coating Market Passed Tipping Point
by Vladislav Vorotnikov
Russia Correspondent
Kazakhstan annually consumes 90,000- 120,000 tons of coatings and prior to 2015 most market participants have
forecasted strong growth of approximately 6-8
percent per year. However, the collapse of global
oil prices provoked a crisis in the country with
reduced investment activity throughout the entire economy. As a result, demand for coatings
is declining and most important market trends
of the past years have reversed, forcing local
firms to adapt to a quite new conjuncture.
Zhaksylyk Kurmanalin, CEO of Gaudi Paint
stated that in general the Kazakhstan market is
divided among 15 manufacturers, who in total
account for 50 percent of the overall market. He
named Alina Paint, Gaudi Paint, Raduga and
Remalux, as the largest domestic producers of
coatings. In the opinion of Kurmanalin, local
market players in terms of production range and
quality can compete with European companies,
however they still experience problems with the
establishment of effective marketing strategies.
According to estimations of Oksana
Kuznetsova, brand director of Alina Paint, at
the moment the average consumption of coating in Kazakhstan amounts to only 5 liters per
capita. She noted, the market basically has the
ability to grow much faster than in Europe or
Russia due to the low base effect.
According to Anton Peshkov, director of
Tikkurila Kazakhstan, after a sharp decline
in global oil prices and following strong devaluation of the country’s currency in August
2015, the coatings market is falling 15-20
percent per year now with a clear tendency
that consumers are shifting towards economy segment.
Peshkov also indicated that many B2B projects scheduled for implementation this year are
frozen and only some of them that have been
initiated earlier are actually completed. B2B activity is expected to decline even further after
the EXPO-2017 Astana. But in general it is projected to fall at the consumer market of building materials and coatings probably will slow
down in the coming years, so the market will
stagnate, he suggested.
At the same time, according to estimations
of industry representatives the average profitability of coating manufacturing in the country
today stands at 15 percent, but already in the
near future it may change, amid negative market conjuncture, strengthening of competitive
fight and a number of other challenges.
Fears of growing import
The recent decade has been marked with
struggle for Kazakhstan coating firms against
import and in general they achieved good
progress in this issue. In the period of 2008-
2013 share of import reduced from 70 percent to nearly 48 percent in overall market’s
structure. Kazakhstan joined common custom
space with Russia and Belarus in 2011, when
it imported 48,000 tons of coatings. In 2012
