R/€ = 13.11
R/$ = 11.90
Au 1205.90 $/oz
Pt 1147.50 $/oz
Nov 07, 2007
Newly listed Chemspec seeks greater participation in global paint marketBack
© Reuse this Newly listed paint and coatings manufacturer ChemSpec will be investigating opportunities to expand its stake in the international paint market, which is currently valued at some $150-billion, CE Strath Wood said on Wednesday.
The group has an aggressive export strategy, which it said was enabled by the fact that it did not manufacture under a licence.
Chemspec was looking to increase its foreign sales from 13% in 2006/7 to 24% in 2007/8.
Its South African sales accounted for 87% for 2006/7 and are forecast to contribute 76% for 2007/8.
FD Bruce Mackinnon explained that the company had established itself predominantly in the automotive paint market in the US, Australia and New Zealand, supplying paint for vehicle refurbishment rather than original equipment manufacturers.
ChemSpec acquired a well-established paint business in the US with its own infrastructure and an existing footprint to facilitate its entry into the market. It also runs a distribution operation in Australia to cater for the region, including New Zealand.
Mackinnon commented that the company's success in the foreign market's could be attributed to the fact that it was 30% to 40% less expensive than other products, because its manufacturing base in South Africa was cheaper and its margins were lower than other foreign companies.
ChemSpec products are also sold in Canada, the Caribbean, Mexico, Poland, China, Russia and India.
He said that the only potential problem going forward would be to fulfil this demand.
To deal with capacity constraints ChemSpec acquired some 200 000 m2 of land, valued at about R70-million, in the Canelands, KwaZulu-Natal, on which a new facility will be developed.
Mackinnon noted that the facility was expected to be completed in March next year and to be fully operation by mid-2008. The new facility, which is focused on "efficiency savings", will absorb the four factories that are currently operational.
Mackinnon commented that the facility provided more than enough capacity with significant room for future growth.
ChemSpec is also looking to increase its House of Paint franchise stores nationwide and has identified 160 sites, including previously disadvantaged areas, to be developed over the next five years.
On the research and development front, Wood pointed out that ChemSpec is currently linked with a US university for the development a nanotechnology- enhanced paint that is dirt-repellent. He added that Chemspec has the licence for the product and it is expected to be released early next year.
© Reuse this Comment Guidelines (150 word limit)
Recent Research Reports
Steel 2015: A review of South Africa's steel sector (PDF Report)
Creamer Media’s Steel 2015 report provides an overview of the key developments in the global steel industry and particularly of South Africa’s steel sector over the past year, including details of production and consumption, as well as the country's primary carbon...
Projects in Progress 2015 - First Edition (PDF Report)
In fact, this edition of Creamer Media’s Projects in Progress 2015 supplement tracks developments taking place under the Renewable Energy Independent Power Producer Procurement Programme, which has had four bidding rounds. It appears to remain a shining light on the...
Electricity 2015: A review of South Africa's electricity sector (PDF Report)
Creamer Media’s Electricity 2015 report provides an overview of State-owned power utility Eskom and independent power producers, as well as electricity planning, transmission, distribution and the theft thereof, besides other issues.
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
This Week's Magazine
While economic forecasts for the African continent are most favourable, African airlines may not be able to benefit from the expected growth in the region’s gross domestic product (GDP), International Air Transport Association VP: Africa Raphael Kuuchi has warned....
The Automotive Production and Development Programme (APDP) will need to change substantially post 2020, says Metair Investments South African operations COO Ken Lello. “We must not make tweaks. We have to change. What we are doing is not sustainable.”
Banking group Absa’s forecast is for the rand to end the year at around R13 against the dollar, weakening further to R13.50 by 2016, says Absa sectoral analyst Jacques du Toit. He warns that possible interest rate hikes in the US may see capital being pulled from...
The Dispute Resolution Centre at the Bargaining Council for the Civil Engineering Industry (BCCEI) is now open to handle party-to-party disputes. The BCCEI represents the interests of all level four to nine Construction Industry Development Board companies.
Communications technology firm Ericsson sub-Saharan Africa head Fredrik Jejdling says the company’s commitment to sustainability and corporate responsibility has been integrated into all facets of its operations, which has provided it with sustainable revenue...