The paint market has struggled before the Covid-19 epidemic
Due to the prolonged epidemic situation, the paint market decreased by nearly 50% compared to the same period, workers paid without pay, reduced income, factories operating moderately ... These are difficulties that representatives of paint company share.
Cut, reduce ... everything
Reducing, reducing, reducing ... is a chorus that many local paint companies' leaders talk about their unit's situation when talking to reporters. From reducing investment, to reducing labor, reducing wages, even companies have suspended operations.
4Oranger is a paint company that is rated as one of the leading enterprises in Vietnam in terms of paint products and financial potential. This enterprise also recently donated VND 10 billion to help the Government prevent Covid-19 disease.
The representative of 4Oranger paint company also revealed the concerns because of many difficulties of the business before the complicated movements of the current Covi-19 epidemic.
According to this representative, usually built in residential blocks and real estate market generally has two main cycles of the year. Phase one, through the Lunar New Year and the second round around May - June when the rainy season ends, is the construction season. However, this year due to the effects of the Covid-19 epidemic, the number of buildings fell sharply. In addition, the real estate market is rarely newly implemented projects, so the paint industry also stood still.
Since the beginning of the year until now, sales of paint industry have decreased by 50% compared to the same period last year.
Not only affected by the output, domestic paint enterprises are also affected by the input source of input materials of businesses, especially small paint firms, almost 100% of the raw material is imported. from China. In order to have raw materials for production, many businesses shifted to import through small quotas or buy and sell back each other's raw materials, causing the price of raw materials to increase by 15-20%, resulting in an additional 7 - 8%. This makes the output more difficult.
Typically, the number of construction starts in 2 cycles is the beginning of the year and the middle of the year, particularly the beginning of the year accounts for about 55%. Accordingly, the peak of the paint market is around May - June, but this year, from the beginning of the year until now, the construction of new nail works is about 10%, leading to the paint market will also decrease by about 50%. consumption when on the main season. However, it all depends on how the situation evolves, 4Oranger said.
With 4Oranger, according to this representative, the main material source from Europe and the US, imported goods by sea, so the input is also less affected, but difficulties in output when some partners have temporarily stopped importing goods. Because of slow consumption. Due to the contingency fund for force majeure circumstances, the Company is still operating, but if this situation persists, it is forced to reduce staff and revenues of employees.
Meanwhile, representatives of Barton Paint Vietnam Co., Ltd. said that with large foreign-invested companies such as Jotun, 4Oranger ... have financial potential, experience in risk management, they will be affected. less activity, and with 100% domestic companies such as Barton, the difficulties are clearly evident. Difficult from input materials due to ban, to output when consumption declines, while the Company has to bear many types of interest expenses on bank loans, wages of workers ...
Currently, we have given employees unpaid leave of more than 1 month. Because when there was an epidemic in Hanoi, people in other localities were afraid to contact people from the epidemic area, affecting our product marketing. Almost customers do not want to reach the sales team, so the Company stopped operating. If compared with the same period last year, the Company's revenue decreased by 50%. About more than last month, the Company did not cut staff but gave a part of the non-working leave without pay, the remaining part worked moderately to reduce income. But now, the Company has cut all investment costs and suspended operations, the representative said.
Similarly, the representative of Zro Paint Company in the Central region also said that this is usually the year when businesses run major product introduction and marketing campaigns to prepare for the peak period in May - 6. But this year, due to the impact of the disease, plans were halted. The consumption of the market declines significantly, the company's revenue declines, greatly affecting the income and life of employees. Employees take unpaid leave, because they cannot sell products, do not have revenue.
A representative of the Vietnam Association of Building Materials also said that due to the quiet real estate market, the impact of epidemics also dragged the construction material market in general and the paint industry in particular.
However, from a different perspective, the sales manager of a 10-year-old paint firm in Hanoi said that this outbreak also revealed many issues of bad treatment for employees of some business owners. In fact, some paint companies are not too difficult, but they also pretend to be affected by the disease to reduce the number of staff, and some even fire employees. They do not think that the profits that they had before partly come from the efforts of their brothers.
Fall into a stance
Sharing frankly but bitterly, a representative of Barton Paint Company said that the epidemic situation was unpredictable and did not know how it was going, production activities of the Company until the recovery. Because the output is not available, while the budget is tight and extreme, the Company can only cut all operational expenses. Now we only have to rely on the disease to be controlled, the construction market will recover, the paint industry will recover.
This situation not only affects the present, but also lasts up to the year. Because this year, the income of most people will be reduced due to the impact of the epidemic, so the repair and construction of new houses will be very limited. When the construction market is in trouble, the paint industry is also in trouble, so at this time, we try to minimize spending, the representative said.
Meanwhile, the representative of 4Oranger paint company said that the company is always interested in researching new products, so take advantage of this silence to focus on researching new products. Not only now, every year the company researches to produce 2-3 new products with the focus on environmentally friendly and safe for users.
We have just launched an anti-UV paint product, which helps keep the color durable, because with other common paints, when the sun shines on, the UV will eat up the paint color, making the paint fly faster. In addition, due to the lack of construction sand, many projects use alternative sand, while sea sand has salt, which will affect the construction quality and the life of the paint, so our company has just studied and launched an anti-salt primer, specialized for coastal areas, 4Oranger said.
Similarly, according to not only researching new and environmentally friendly products, Jotun Paint also invests in sales technology, helping customers to choose and coordinate colors directly through their smartphones. looking to buy products.
However, businesses say that, regardless of their efforts, it depends on the development of Covid-19. If the epidemic situation persists, the company, despite its potential, must face the risk of closing or suspending operations.
The Covid-19 epidemic as a "secret check" move caused paint industry enterprises to have a headache to find a solution.
Building materials (TH / Investment