The varnish and paint industry recorded cumulated decline of over 50% during the crisis years.
“We plant flowers everywhere, but nobody takes care of utility poles, bridges, fences. Unless protected by paint, our cities will be soon ruined by the environmental corrosion, by pollution and by the natural wear and tear of construction materials,” said Bardelli.
At present, paint consumption in Romania amounts to just 4 kilos per capita per year, while the European average is around 14 kilos per capita.
The varnish and paint market in Romania is experiencing its third year of recession. From the EUR320 million-euro maximum value recorded in 2008, the market will fall in 2011, most likely to less than EUR150 million, said Bardelli.
“Moreover, materials used in the industry are prone to high inflation, comparable only to that recorded in 1972. The combination of recession and inflation affects the Romanian industry of varnish and paint,” he added.
One method for the varnish and paint industry to be revived is through the home thermal-insulation program, which can stimulate house and apartment renovation in a natural way.
“The sector needs urgent support from the government, which should promote lending as part of the home thermal-insulation program.”
The behavior of consumers of varnish and paint was significantly affected during the crisis, and the recent turmoil on international markets has not spared the local industry.
“The second wave of the financial crisis has a significant impact on Romanian households, and, consequently, on their small and medium-sized investments. Romanians are disoriented and in times of uncertainty prefer to put off investments which are not strictly necessary or health-related.”
In 2011, Policolor-Orgachim allocated around EUR3 million for investments in rebranding (the company is currently conducting a campaign to promote Policolor’s new image), production, distribution and programs of protecting the environment.
The company has resumed the process of expanding its own store chain, having already opened two stores in Constanta and Iasi and rebranded the existing one in Timisoara. By the end of the year, another store in Bucharest is set to open, bringing the Policolor network to seven units.
Policolor products are present in over 2,000 stores, as well as in around 75 DIY stores.
Policolor-Orgachim has in the last few years moved almost all its production from Romania to Bulgaria, except for the production of special paints, such as those for the car industry.
Policolor, formerly called Intreprinderea de Lacuri si Vopsele (Varnish and Paint Enterprise), is held by investment funds Reconstruction Capital 2, Romanian Investment Fund and Romanian Reconstruction and was withdrawn from the Bucharest Stock Exchange at the end of 2008, after being listed in 1997. In 1998, Policolor acquired 51% in Orgachim, the largest paint producer on the Bulgarian market.
On the varnish and paint market, Policolor competes with companies such as Fabryo Corporation, Kober, Atlas Corporation, Deutek, Daw Benta and Druckfarben.
(Enlish version by Daniela Stoican)