Paint company AkzoNobel is taking a new strategic direction in Papua New Guinea, according to Chief Executive Officer, Navin Raju. He tells Business Advantage PNG that the prospects for growth are sound.

Paint company AkzoNobel’s Navin Raju Source: Akzo Nobel

‘In the past we were more trade and retail focused—over the counter sales,’ says Raju.

‘The new direction now is that the company will be focusing on supporting the resellers and AN is moving out of retail sales.

‘The reason for moving out of retail is that we will not be competing with our own paint resellers but supporting them with increased marketing presence.

‘We have closed down our warehouse and retail sales stores in Hagan and Kokopo and appointed distributors to distribute and grow the business in these areas.

‘I must say that in Hagen in last three months, there are already been huge signs of improvement.’

 Market

Raju says the PNG paint market ‘is growing slowly’ but the company has nevertheless achieved extensive growth over the last six months.

He says the company is no longer manufacturing in PNG. ‘It is part of the new overall strategic direction of Akzo Nobel PNG.’

Raju expects that once the new strategy is in place the company will strengthen its market position in PNG with competitive pricing and further improvement in the quality of the products.

‘We moved our production to our AN factory in Malaysia around 18 months ago.’

Stages

Raju says the shifting of the production facilities is being executed in two stages. ‘The first stage was to get it in bulk and package the products in PNG.

‘The next stage is, we are hoping, that in another three to four months we will have the finished product coming from Malaysia.

‘Shipping direct from Malaysia into Lae is a lot more inexpensive and efficient.’

‘Obviously, there will be logistic issues, as we are not producing in PNG anymore, but we have sound strategies to control and manage this. We have to get the product mix precise as there is about a three months lead time.’

‘We also do not have to actually ship from Port Moresby to the rest of the country.

‘We are building a new warehouse in Lae to increase our capacity. Lae will take approximately 60 per cent of our shipments.

‘Shipping direct from Malaysia into Lae is a lot more inexpensive and efficient than sending it out of Port Moresby.’

Other Products 

Raju says he is not just focusing on ‘deco’ (decorative) paint products. The company also sells the automotive range under the Lesonal brand and also the Yacht and Boat range under the International brand.

‘A lot of businesses are looking at painting their buildings.’

‘Our Marine and Performance Coating range under the International Brand are the market leaders in PNG.

‘We have been making some real inroads in Automotive and Yacht and Boat area. It is an area where we are really focusing on growing and increasing our market share. 

APEC

Raju says the APEC forum in November has led to ‘an increase in activity’ and inquiries for paint products.

‘A lot of businesses are looking at painting their buildings, getting rid of graffiti and focusing on the upkeep of the environment and this is creating of activity for us’.

‘It hasn’t turned into sales as yet, but what I foresee is that in the next few months the activity will lead to increased sales.

‘I believe the market will continue to grow, depending on how much APEC injects into the economy. I strongly believe that the market will move forward.’