In the last years, the Russian paints and coatings market did not meet the expectations regarding its growth. A snapshot of the market and the forecasts for the years to come are not too promising either. European Coatings has gathered five facts.
The Russian coatings market is very different from the one in the West. Here, there are no intensive M&A activities; instead companies mostly try to increase their market share by undercutting competitors rather than by deploying standard marketing tools. This approach adversely affects quality and it is no wonder that the DIY sector is flooded with both low-quality and counterfeit products.
Imports pose a problem
Import substitution is a vital issue for Russian industrial paint makers, as coating imports in some end-user spheres break all records. In 2016, following a 2-year downward trend, coatings production picked up, with volumes higher than in 2015.
How does the government deal with the high imports?
The Russian government has devised an import-substitution strategy by means of which financial support is provided for companies that replace foreign imports with their own products.
Raw materials supply under pressure
Another problem Russian paints and coatings manufacturers are facing is the supply of raw materials which is desolate for many substances.
Looking at growth scenarios for industrial coatings until 2020, the three segments with most potential are general industry, military and oil and gas.
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