Greek paint industry needs support to ensure growth

19 February 2016

Heidi Finch

The Greek paints industry continues to weather the economic and political storm but what are the key survival factors and how does it expect to strengthen its future position?

All 14 Greek paint companies have continued to operate and avoid bankruptcy despite the past eight years of crisis, according to the Greek Association of industrial paints, varnishes and inks earlier this week.

However, while the industry has survived with the 11 main companies having a minimum turnover of €3m each, according to data for 2014, it still suffered some substantial losses which need to be recovered, according to a Greek industry association.

 “We [The Greek paints industry] lost 42% of turnover [between the period] 2008-2012, [it] was quite volatile, market is still flat,” said Armodios Yannidis, president of the Hellenic Coatings Association (HCA) and CEO of paints and coatings firm Vitex, in a recent press briefing.

However certain measures have been taken to buoy activity in the Greek paints industry, such as reinforcing the distribution chain and ensuring availability of 2,800 paints in retail shops throughout Greece.

“Keeping payment terms as they were, keeping longer credit possibilities – standard around 4-6 months, depending on the customers’ situation”, said Yannidis in a phone call with ICIS following a press event with Greek media.

He went on to say that keeping credit lines open and having sufficient product availability are key factors in supporting and stimulating market activity.

Continuing to export product outside the local area has also helped to boost demand. Greek’s paints and coatings companies have an important exporting power, with 11% of product exported in 2014, according to the Greek Association press statement. Yannidis added that this export rate was considered to be relatively high.

He said that while export activity helps to support the Greek paints industry, “it can’t help [the industry] to survive on its own” and logistics and raising brand awareness outside the local market remains challenging.

Nevertheless, Greek paints and coatings companies have been able to extend their geographical reach and physical presence by creating 20 affiliated companies abroad on top of five local factories which cater for local needs, according to a translation of the Greek association statement.

Despite limitations, the Greek paints industry continues to invest in research, developing innovative products and standardising products in line with European specifications.

In addition, some proposals have been made which are expected to increase the industry’s competitiveness and consolidate and strengthen their position. 

Supporting the voluntary programme for renewal of the eco labels on products and possible changes in criteria which will help to reduce environmental effects of paint usage is one of the proposals, said Yannidis.

The paints sector has the highest number of products with this eco label, with more than 170 products, according to the association press release. 

Reducing the red tape regarding exports and simplifying institutional procedures is another factor that also needs to be addressed.

“I am sure that our proposals as well as a more stable political and economic environment and with increased credibility for the country will help enhance the growth dynamics of the Greek paints and coatings industry and have important gains in terms of employment and of real economy,” said Yannidis in the press statement.

Supporting “the Save at Home programme”, which provides EU funding to upgrade energy efficiency of all buildings represents another proposal which could also help underpin paint demand in Greece.

Ensuring that safety in paint usage is paramount by supporting the LIFE-READ volunteer programme, in which health and safety instructions are downloadable using a barcode on the product, said Yannidis, stating that these instructions are available in Greek and other countries have also contributed.

Yannidis added in discussion after the press event: “We need less red tape and more political and economic stability” in order to help support and strengthen the future of the Greek paints industry.

He remains hopeful that “the tourist business is growing [in Greece] and the paints industry is also growing with it.”

He went on to say that buildings need to be maintained in order to attract and encourage tourism. It therefore expects some small positive growth in the Greek paints industry this year, but this will also depend on the political and economic situation.

Additional reporting by Vasiliki Parapouli

Content supplied by ICIS