#1Coma $ Bangladesh Paints Manufacturer Association. October, 2019#2Coma BANGLADES A nation of young population with almost equal gender divide and a bigger middle- 26 24° About Bangladesh 86 88 90° 92% NEPAL 0 OTO 0 50 75 INDIA 100 mi 8th largest population in the world with 150 km the size of 162 Million. Saidpur Rangpur Dinajpur Sylhet Bogra Jamalpur Mymensingh Nawabganj Naogaon Rājshāhi Ishurdi Sirajganj Tangail Kishorganj Bhairab Bāzār Kushtia Pabna Narsinghdi Dhaka Brahmanbaria INDIA Faridpur Chuadanga Narayanganj Domilla BANGLADESH Area 143,998 sq km (55,598 sq miles) income group 22° possesses strong growth Jessore Chandpur Madaripur Chaumuhani Khulna Bagerhat Noakhali Satkhira Barisal Rangamati Chalna Port Patuakhali Chittagong 56% population are below 30 years of age bracket - Average Age 23.6 Year Urban- 36.6% Rural population - 63.4% GDP (nominal) 2019 estimate Cox's Bazar MYANMAR • Total $314.656 Bn. (39th) potential. ©1998, Encyclopædia Britannica, Inc. • Per capita $1,888 (143th) Record 7.86 Percent GDP Growth of Bangladesh Economy in 2018.#3Coma BANGLADESH PAINT MANUFACTURE ASSOCIATION Macroeconomics Bangladesh finally broke the growth trap of 7% and attained 7.86% GDP In USD Billion Growth. 221.42 195.08 172.89 149.99 133.36 128.64 115.28 102.48 2010 2012 2014 2016 300 274.03 249.72 250 8 200 7 ADB Country Director for Bangladesh Manmohan Parkash unveiled the report, highlighting various economic aspects of Bangladesh, at a media briefing at the bank's Dhaka office. GDP growth is expected to edge up to 8% in the FY2019 on robust private consumption aided by continued recovery, while growth in FY2020 is expected to remain solid at 8% as momentum from the previous year broadly continues, according to ADB's forecast. REGIONAL GDP OUTLOOK 150 6 2018 2019 2020 6.6 6.3 6.1 5 4.7 4.7 4.5 100 4.1 2018 3.9 3.7 4 SOURCE: TRADINGECONOMICS.COM | WORLD BANK 7.9 8.0 8.0 FIGURES IN (%) 7.1 7.2 7.3 6.8 6.7 7.0 5.2 3.9 3.6 Government forecasts that the investment to GDP ratio will stand at 31.57% - of which 8.17% will come from public investment and 23.40% from private sector investment. GDP GROWTH BY SECTOR % 15 Agriculture Industry Services Gross domestic product Forecast 122 12 9 9 3 0 2014 2015 2016 2017 2018 2019 2020 Source: ADB 3 A 1 0 China Malaysia Thailand Vietnam Bangladesh India Pakistan PER CAPITA INCOME (FIGURES IN US DOLLAR) 1,610 1,316 1,465 1,752 1,184 FY14 FY15 FY16 FY17 FY18 SOURCE: ADB#4Coma BANGLADESH PAINT MANUFACTURES ASSOCIATION Youth unemployment rate GDP Growth Drivers 1998 1999 2000 Agriculture growth 1.52% Industry growth 17.13% Manufacturing growth 18.23% Services growth 12.80% Growth figures are in nominal terms 2001 2002 2003 2004 2005 2006 2007 6.39% 2008 2009 2010 2011 2012 2013 12.28% 12% 10.85% 10.46% 10.11% مة 9.12% 8.69% 7.48% 8.83% 7.88% 7.76% 7.3% 6.63% 8.21% 8.8% 9.64% 9.12% 7.79% Bangladesh: Youth unemployment rate from 1998 to 2018 10.41% 10.52% 10.12% 9.67% 8.73% 8.65% 2014 2015 2016 2017 2018 Bangladesh: Inflation rate from 1984 to 2024 (compared to the previous year) 1984 1986 1988 1990 1992 3.62% 3.72% 2.98% 2.46% 2.48% 1.91% 6.15% 4.96% 7.04% 6.18% 6.1% 5.36% 9.37% 9.11% 11.46% 7.54% 4.91% 1994 1996 1998 2000 2002 6.23% 6.16% 5.56% 5.48%5.5% 2004 Per Capita GDP (USD) 1,675 Per Capita GNI (USD) 1,751 National Income GDP growth (%) Nominal GDP (USD bn) 2006 2008 2010 2012 2014 2016 2018* 2020* 2022° 2024* 7.86 274.1#5pma SANGLADESH PAINT MANUFACTURES ASSOCIATION CHALLENGES -5% Net Exports TABLE 2: CHALLENGES OF SMES IN BANGLADESH CORE CHALLENGES 1. Absence of skilled manpower 2. Use of old machineries 3. Lack of product diversity, new product design and development 4. Lack of information 5. Poor quality of products 6. Limited and complicated access to finance 7. Limited support from regulatory government agencies 8. Absence of harmonised tariff and non-tariff policies 9. Absence of export orientation of capable SMEs 10. Absence of skills in demand in the market in academic curriculum SOURCE: AUTHOR'S RESEARCH FINDINGS ISSUE SPECIFIC CHALLENGES 1.1 Absence of modern machine operators and trouble shooters 1.2 Absence of qualified managers and innovators 1.3 Absence of trained designers and researchers 1.4 Higher educated but unemployed young generation 2.1 Poor quality of products 2.2 Low productivity 2.3 Higher cost of production 2.4 Wastage of raw materials and other resources 3.1 Same products being saturated over time 3.2 Small product basket 3.3 Lack of product diversification 4.1 Lack of market access 4.2 Lack of market share 5.1 Inability to achieve quality certification 5.2 Limited ability to meet buyer specifications 5.3 Losing market share to imported products 6.1 Absence of promotional schemes like startup financing, credit guarantee, export guarantee, modernisation of machinery, innovative product development, etc. 6.2 Limited investment capacity 6.3 Higher interest rate 7.1 SMEs are yet to receive proper support from law enforcement agencies, the Department of Environment, Department of Inspection for Factories and Establishment, NBR, and other government agencies 8.1 Tariff on raw materials and finished goods yet to be harmonised 8.2 Many investment promotion commitments of the government are yet to be implemented by NBR and other regulators 9.1 Single product dependency to export 9.2 Rural SMEs are outside export business circle 9.3 Limited export destinations 10.1 Unavailability of required skills 10.2 Higher educated but unemployed young generation 10.3 Absence of product specific manufacturing skill training WHAT IS GROSS DOMESTIC PRODUCT? HOW IT AFFECTS YOU 17% Government Spending 18% Business Investment he balance 10 69% Personal Consumption 11#6Coma SANGLADESH PAINT MANUFACTURES ASSOCIATION Bangladesh possesses key ingredients for industrial development Significant access to developed countries Access to markets of neighbouring countries Rising domestic demand Consistent GDP growth Rising FDI Increasing foreign trade Liberal FDI policy Treaties with countries to avoid double taxation Industry oriented policy Access to Market Macro-Econom Parameters Policy Support Strategic Location Bangladesh Infra Development Factors of Production Developing landscape of social and physical infra Various planned infrastructure augmentation to support the industrial development Located between India and China Well connected to South East Asian Region Access to Waterways May evolve as Trade Hub Cost of doing business is low among the developing countries and its South Asian counterparts Demographic Dividend- Youth Vibrant pool of talented and qualified young population#7Coma Mega Projects will instigate economic activity Will reduce distance between Dhaka & southern Bangladesh by 100 Km & transform lives of 30 Mill people Padma Bridge Rampal Power Project 1320 MW Electricity will be generated 2000 MW Electricity will be added to national grid BREAKWATER DREDGED CANNEL VANGA CAN Rooppur Nuclear Power Plant Dhaka Metro Rail "Chittagong will turn into a major regional hub SONADIA MOHESKHAL Proposed Metro Routes To Gazipur Sonadia Deep Sea Port N Uttara North o Uttara Centre Uttara South Uttara Uttara LNG Terminal Airport Entrance Airport South Pallabi Khilkhet Will feed energy Section 10 Army Stadium Zoo Road Kazparab Adamjee Taltola Cant Mirpur Banani Badda Gulshan College Mohakhali Gulshan Agargaon Gas hungry Industries by supplying 5 Mil Tons of Adabar Chandima Rampura Udyan Dhanmondi Sonargaon Dhanmondi Moghbazar "Khilgaon Kamalapur Shahbag Kamalapur Station MRT Line 6 BUET MRT Line 4 MRT Line 5 BUET Banga Bazar MRT Line 6 .... Extension of MRT Line 4 ..Extension of MRT Line 6 Sayedabad Station MRT Line 4 Station MRT Line 5 To Narayanganj Matarbari 1200 MW Coal Based Power Plant 1 6 9 10 13 7a 12 7b 0000 10000 回#8Coma oma Bangladesh Paints Manufacturers Association PAINT MANUFACTURES ASSOCIATION • · • BPMA Bangladesh Paints Manufacturers' Association is the organization of the producers of Paints. The name itself implies that it is the organization of the Paints manufacturers to enhance or resolving problems faced not only by it members but by the paints industry as a whole. Registration # T.O. /113178 of 1978-79 dated 31-08-1978 under the companies Act 1913 with the Registrar of Joint Stock Companies, Dhaka. BPMA MAIN FOUNDAR Mr. Serajuddin Ahmed - Managing Director of Elite Paint & Chemical Industries Ltd. Mr. T. Karim - Managing Director of Al-Karim Paint. INITIAL MEMBERS - 1978-1979 1. Elite Paint & Chemical Industries Ltd., 2. Jenson & Nicholsen (Bd) Ltd. 3. Buxly Paints Ltd 4. Industrial Chemical & Allied Company Ltd. 5. Al-Karim Paints & Chemical company Ltd. 6. Paradise Paints Ltd. 7. Galaxy Paints & Chemicals 8. Ronny Chemical & Allied Company Ltd#9Coma BANGLADESH PAINT MANUFACTURES ASSOCIATION EXECUTIVE COMMITTEE MEMBER 2019-2020 RUPALI CHOWDHURY HAJI SHAFIQ ULLAH PRESIDENT DR. NURUZZAMAN ENG. M.A. RAHAMAN MD. HAMIDUL ISLAM ASHADUZZAMAN KHAN SENIOR VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT SHAHID KHAN GEN. SECRETARY MOKBUL ISLAM KHAN TIPU SOUMITRA ROY TREASURER ARUN MITRA ADD. GEN. SECRETARY ORGA. SECRETARY SALIM AHMED B.B.SAHA ROY M. SHAMSUZZAMAN MD. SHAHJAHAN TAJIK KARIM ABUL KALAM FARHAD MD. AMIR HOSSAIN EC MEMBER EC MEMBER EC MEMBER EC MEMBER EC MEMBER EC MEMBER EC MEMBER#10Coma BANGLADESM PAINT MANUFACTURES ASSOCIATION Vision, Mission and Values - • Vision Bangladesh Paint Manufacturer Association (BPMA) has a mission to promote Paint and other coating alternatives. The Association shall promote the coatings industry's substantial contributions to society and provide a forum for the exchange of ideas and information with a strict adherence to ethical business practices and legal conduct. Mission • To become progressive paint manufacturers association and a key player in the SAARC, serving its market with high tech environment friendly paint & coating products backed up by services from well- trained professionals within a supportive government. • Values • The Association shall promote the Paint industry's substantial contributions to with a strict adherence. to ethical business practices and legal conduct.#11Coma BANGLADESM PAINT MANUFACTURES ASSOCIATION Objectives - 1. To cultivate healthy and profitable competition among manufacturing members. 2. To provide continuous exchange of technical assistance and services between the suppliers and the manufacturing members for a progressive technology implementation. 3. To explore potential business opportunities beneficial to the progress of the industry, and to enhance the economic growth of the country. 4. To coordinate with the government for faster services in the approval of quality standards for the protection of the manufacturers & consumers. 5. To seek assistance from the government in the implementation of the business taxes and the duties that becomes profitable and favorable to the industry. 6. To work jointly and collectively with like minded organizations to facilitate linkage development.#12Coma BANGLADESM PAINT MANUFACTURES ASSOCIATION • Our promises - Bangladesh Paints Manufacturer's Association (BPMA) is not for profit leading body representing the paints manufacturers & suppliers of Bangladesh. We are the voice of paints industries providing representation National & International level. The Association seeks to advance, encourage and recognize the highest standards of paints, We do this by providing members and consumers with up-to-date information on a regular basis and also through our Awards for Excellence which is held annually at our AGM and where we see the best of the best competing. • All members of BPMA has a range of resources available to them by way of magazines, e- bulletins, industry consultants, updates resources, accredited and certified courses conducted by various Govt. & Non Govt. organizations. BPMA is Member of FBCCI & Asian Paints Industry Council (APIC) recently BPMA has been working with BSTI, CISC & ESDO to protect & as a safe guard in Bangladesh Paints Market.#13Coma BANGLADESM PAINT MANUFACTURES ASSOCIATION . ● KEY Activities of BPMA Arrange Training like as VAT & TAXES, Paints Technology, Safety and security. Provide Technical Support.- To use Lead Free Pigments and driers in Paints. ● Provide Information about Local Market. Provide Information about Raw Material Sources. ● Maintain Relationship with Govt. Authority to develop this sector. • ● Maintain Relationship With Others Authority to develop the product quality and meet the social demands. To give assistance for product Pricing in local market. To maintain the good relationship with in members such as not to do the un-ethical Promotional activities practice in the market. • Jointly established the Paints Specification for Bangladesh with BSTI, ESDO.#14oma Paints Market size in Bangladesh#15Coma BANGLADESM PAINT MANUFACTURES ASSOCIATION Total Paints Market Size in Bangladesh Total Paints Market Size: BDT 3.3 Billion (182637 MT) DECORATIVE PAINTS - 82% PROTECTIVE COATING - 8% MARINE PAINTS - 5% COIL COATING - 3% AUTO REFINISH & OTHERS - 2% Market Growth: 10-12% Annual#16Coma BANGLADESM PAINT MANUFACTURES ASSOCIATION Decorative Paint Market Scenario Thinner & Others (7th), 2% Economy Enamel (4th), 11% Premium Enamel (5th), 10% Cement Paint & Other Non- Liquid (5th), Volume Wise (182637 MT) Value Wise (BDT 3.3 Bn) Interior Emulsion (2nd), 16% Thinner & Others (6th), 2% Economy Exterior Enamel (2nd), Emulsion (3rd), 15% 15% 10% Distemper (1st), 18% Putty (6th), 7% Sealer (4th), 11% Premium Enamel (1st), 18% Cement Paint & Other Non- Liquid (5th), 3% Putty (5th), 5% Interior Emulsion (1st), 18% Exterior Emulsion (2nd), 15% Sealer (4th), 11% Distemper (3rd), 13%#17Coma BANGLADESM PAINT MANUFACTURES ASSOCIATION Performance Coating Market Scenario: Category Share Coil Coating 10% Wood Coating (Decorative and Industrial) 9% Vehicle Refinish 15% Value Wise (BDT 0.85 Bn) Marine Coating 15% Powder Coating 7% Protective Coating 44% Performance Coating Market Size: BDT 0.85 Bn. (0.065 Mn KL) Market Growth: 15-20% Annual (Segment wise varying) Protective coating, Coil Coating & Marine Coating are growing faster. Category: Specialized: 50% (Mostly Imported) Traditional: 50% (Locally Manufactured)#18Coma BANGLADESM PAINT MANUFACTURES ASSOCIATION Market Potentials: Per Capita Consumption . Annual Per Capita Paints Region Consumption in KG North America 20 Western Europe 15-25 South Pacific 5.5 China 7-9 Middle East 7 India 3.23 Bangladesh 0.96 Lowest Per Capita Paint Consumption (0.96Kg), Existing market size is 182637 MT/ BDT 3.3 Billion. This is a Vibrantly Growing Market with enormous growth opportunities.#19Coma BANGLADESM PAINT MANUFACTURES ASSOCIATION Market Dynamics of Decorative Paints Competitors: • . • 6 MNCs Berger Paints, Asian Paints, Nippon Paint, Jotun Paint, AkzoNobel Joint Collaboration with ACI, and Kansai Nerolac Paints Bangladesh Ltd Joint Collaboration with RAK Paints have acquired 82% market share and 8 Major Local Players & others are competing rest 18% of the market. Big challenge to face the market leader and challenger. Challenging job to snatch market share from competitors. • Big challenge for price sensitive competition market. • Dealers & Painters influence the customer for purchasing decision. Intermediaries: Dealers & Painters: • • They are interested to do the business with the market leader and challenger due to brand recognition. Very Big challenge for a new entrant to motivate such dealers & Painters Reference Groups: • Loyal to Market Leader and Challenger due to numerous motivational and attractive incentives and services Aggressive local players are also working to build a strong reference group base. Challenges: • • Restricted to use Lead as Pigments, Extenders or Additives in Decorative Paints. Govt. impose for BSTI certificate as Mandatory for Synthetic Enamel paints and Emulsion Paints - Exteriors & Interiors.#20Coma BANGLADE PAINT MANUFACTURES ASSOCIATION Market Dynamics of Performance Coating - 1. Rapidly growing market segment Specially – Protective Coating, Coil Coating & Marine Coating. 2. Few Paints Manufacturer are producing specialized Coating. Major are imported due to low cost. 3. There is the limitation for Local players are not technically sound to compete in the specialized segment. 4. Major 4 Local players are in the traditional industrial coatings market. Major Market share is acquired by 6 MNCs 5. Powder coating is Producing locally BERGER Paints, RAINBOW Paints, ELITE Paints and Akzo Nobel is also in the powder coating market to import powder coating from mother company. 6. Coil Coatings is producing locally BERGER Paints to joint collaborate with BACKER & NIPPON Paint. 7. Low cost coatings are manufactured in China are available in the market. 8. High potential clients importing their required products from China, India, Indonesia, Malaysia etc. e.g. Abul Khair Steel and Energy pack, Galco Steel, etc.#21Coma BANGLADESM PAINT MANUFACTURES ASSOCIATION BELL weather of Paints Business In BANGLADESH A Fast growing emerging market Sachs. - As N11 list of Goldman - Per Capita Huge Potential of growth in Paints consumption consumptions lower than others South Asian Countries. ❖ A booming consumer base eager to upgrade in every aspect of life - excited for better Products. - A growing real estate and infrastructure industry bell weathers of Paints business. ❖An immense opportunity to be a parts of a sustainable growing, vibrant economy.#22Coma THANK YOU