Rising cases of insurgency in the Northeast and and import duties are responsible for the low turnover recorded in the past by paints manufacturer Chemstar Industry Nigeria Limited, its Group Managing Director (GMD), Mr. Aderemi Emmanuel Awode, has said.
Speaking at the company’s Customers Forum in Lagos, the GMD flayed the rising insurgency in some parts of the country, saying such is not healthy for a business growth. “Because of rising insurgence in the north, our turnover has plummeted especially in the previous year from what it used to be,” he said.
While expressing optimism for a quick end to the Boko Haram insurgence for business to thrive,the GMD said about 65 per cent of the company’s turnover is from the entire northern states, including Abuja.
Awode further hinted that the manufacturing sector was facing difficult times due to the challenge of the slide in the naira exchange, and the sharp drop in the price of crude oil. He said most of the raw materials used in the paint industry were imported.
“About 70 per cent of our raw materials are imported, while payment for the raw materials is done in dollars, while the import duties or tariffs are on the high side. These and other challenges are confronting the growth of paints industry,” he lamented.
He noted that though the challenges of the paints industry and manufacturing sector in general were tough, God had been benevolent to the company in the last 20 years of its operations.
The GMD, who put the company’s capacity utilisation at between 60 and 65 per cent, while the market share is about 20 per cent, said if considered with the over 1,000 paints industries in the country, and the competitiveness of the industry, the 20 per cent market share was good.
Awode, who said the past 20 years had been challenging, yet rewarding, attributed the achievements of the company to the passion for paints business, commitment of the distributors, support of the customers and dedication of the workers.
“Today, we are celebrating our 20 years of successful business growth and quality products and services. We owe this to the Almighty God, as well as our dedicated staff, loyal distributors and support from customers,” he said.
Awode said the company, which began operations in a room in 1996 with three workers and two distributors, has over 2,000 distributors spread across the country and over 1,000 work force, as well as factories in Johannesburg in South Africa; Accra in Ghana and Turkey.
The paints industry, which kicked off its 20th anniversary this year with the yearly Staff Week, and the fourth National Sales Conference as well as the Customers’ Forum, according to Awode, has its distribution network and distributors in all cities and towns of the country.
Describing this year’s customers’ forum as special, as it coincided with the anniversary, the GMD said Chemstar Paints is the only paints industry that rewards its distributors and customers.
On the criteria used to reward the distributors, the GMD listed, among others, the rate of their turnover (the volume of what they bought in that financial year); the percentage of appreciation of their business in the previous years; and distributors that have done so well in their different zones.
Several distributors were rewarded in various categories – fast- growing distributor of the year, outstanding regional distributors, distributors with over 15 years business relationship and Shield paints outstanding distributors.
They, however, went home with various gifts and cash prizes ranging from gas cooker, deep freezer, refrigerator, LG washing machine, LG Plasma TV, generator, standing fan, DVD player, electric kettle, home theatre and iron, among others.
