Paint and varnish producers are operating investments worth above 40 million euros to raise production and warehousing capacities and to launch new products, in a bid to meet current market demand.
With this in mind, Kober, a leading player on the market, plans to invest 12-15 million euros to develop in Savinesti one of the biggest production facilities in the Romanian paint and varnish industry, with an annual production of above 120,000 tonnes.
Moreover, Fabryo, the owner of the Savana brand, is currently carrying out an extensive project related to the construction of a paint plant, with the total value of investments being put at 15 million euros.
Another producer intending to make investments to diversify its portfolio is Dufa Deutek, which will spend some 4 million euros by the year's end.
Dufa Deutek last year invested over 3 million euros, with the main projects being related to increasing production capacity and to its promotion of products.
Policolor Bucharest paint and varnish producer also made the strategic decision to relocate part of its Bucharest production facilities to the Orgachim plant it owns in Bulgaria, with only premium products to remain in Romania.
The paint and varnish market will reach around 300 million euros over the next four years, posting an annual expansion rate of around 15%, bolstered by the rising number of new houses and by the fast pace of house renovation. "The market will hit a volume of around 180-200 million euros this year (an increase of 15%) with the rate to remain constant over the next 3-4 years, amid the development of the constructions market," says Stefan Barna, business strategy manager with Kober.
Paint and varnish consumption is still low compared with countries such as Poland or the Czech Republic, hence the tremendous growth potential and the rising demand for the renovation of old houses and the expected boom to be witnessed over the following years in terms of new residential projects.
The Romanian paint market is dominated by four major producers: Kober, a business started from scratch by Aurel Kober, Policolor, owned by three investment funds, Dufa Deutek, a company that was acquired by Advent investment fund in 2005, and Fabryo Corporation, a business set up by Daniel Guzu in which Oresa Ventures investment fund owns a 49% stake.
The paint and varnish market began to draw rising investments in 2000, as the industrial sector of paint grew stronger, the national production of paint for the first time registered an increase by 5-10%.
According to market players, the growth was mainly triggered by the revival of the construction sector.
Market expansion also pushed companies to invest in the extension of their product ranges and portfolios.
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