Paints and Coatings Market in Saudi Arabia (KSA)

Construction industry to see increasing investments due to the need for economic diversification and overall social development

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The infrastructure industry in the KSA, which enjoyed high growth rates over the last few years, is facing hardships due to crude oil prices. This in turn has affected the demand for paints and coatings. However, the Government's plans for economic diversification will serve as a shot in the arm for the paints and coatings industry. Development of downstream petrochemicals / chemical industries, healthcare facilities, educational facilities, tourist hot spots, logistics corridors, etc. will result in increased consumption of paints and coatings. However, in the short term companies will need to look at increasing penetration in the retail space for decorative coatings. In the case of protective coatings, product development and performance is key for sustenance. This study provides a broad overview of the general economic condition of the KSA and its effect on the paints and coatings industry, and has been designed to serve as the critical starting point for charting short-term strategy for a paints and coatings company.

Table of Contents

Paints and Coatings Market in Saudi Arabia (KSA)Scope & ObjectivesScope & ObjectivePaints & Coatings: Summary and Spotlight MessagesConstrained earnings across customer segments; price point to be key differentiator in short to medium termsWay forward: Short term focus on catering to price conscious customers; long-term roadmap towards tech-intensive, green productsMarket Overview: The Kingdom of Saudi Arabia (KSA)The KSA is the largest member of the GCC, largely influencing economic activities in the GCCDiversification into non-oil related industries and Tourism to boost construction activities and drive demand for paints and coatings Construction industry to see increasing investments due to the need for economic diversification and overall social development in the KSA Paints market has witnessed steady growth over the years, with decorative coatings dominating the mix. Low crude oil prices to dampen growth in the short term Established local & MNC presence; intense competition across price-points and product types; a broad price-range product portfolio critical in gaining marketGrowth outlook dampened by macro-economic uncertainties due to crude prices & geo-political issues; urbanisation & economic diversification drive demandWith a 2021 potential of SAR 3 Bn, KSA paints market presents a promising outlook for participants, despite economic woes of the short termDecorative CoatingsSignificant share of the unorganised sector highlights market penetration opportunity at low price points in the decorative coatings marketAccounting for 80% of total sales, Retails sales will be the growth hotspot; role of dealers/distributors critical to gain/retain market shareTighter regulations, lower prices & growing end-user awareness to impact product development & placement towards ‘green’ brand; market consolidation possibleConsumer preferences created trends such as eco-friendly branding, plain aesthetics and paints with textural appearance—Key to penetrate marketProtective CoatingsHigh consolidation at both supply and demand sides; high entry barriers; product performance with significant price benefits can help acquire new customersWith customers reducing spending, paint producers to collaborate with suppliers to offer products at competitive pricing. Limited role of distributors Challenges in growth due to current economic situation. To look at power generation and water treatment related coatings and target sales to Aramco Saudi Aramco’s approval is key for new product introduction in protective coatings. Economic diversification to offer new opportunities in additional industry segments Annexure: Our ServicesMaximize opportunities from existing products and markets; systematically explore new products and markets including inorganic OpportunitesGrowth Consulting—Service OfferingsLegal Disclaimer




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