Paint prices up as raw material costs increase

The UAE construction sector has been hit by a sharp increase in the price of paint following an increase in the cost of raw materials.

Two leading manufacturers have pushed up their prices and others are planning increases. They say the rises are a result of the record oil price and the mounting costs of chemical raw materials such as alkyd resins, titanium dioxide and pigments.

And they have warned that a further round of price rise is on the way.

National Paints, one of the largest manufacturers in the UAE, announced an increase of 10 per cent in June – the second time it has raised prices in recent months.

In April, Jotun Paints, another leading manufacturer, announced an across-the-board increase.

And paint dealers and contractors fear other companies will follow the trend.

"National Paints increased the prices of all paint products with effect from June 21," said an official at the company's sales department.

"The price of a 20 litre tin of oil paint has increased to Dh195 from Dh180. The price of emulsion has gone up to Dh55."

National Paints has an annual production capacity of 200,000 tonnes and makes a range of products, including industrial and marine paints.

Kozuhiko Fujii, Managing Partner of Interdeco Incorporated, a Japanese firm with a plant in Dubai, said manufacturers faced a dilemma over increasing raw material costs and the need to supply high quality paint.

"We raised paint prices in May and plan another increase of five to 10 per cent this month. Key raw materials for the paint industry come from the oil and chemical industry. The price of raw materials like resins and pigments have gone up by about 40 per cent. If we save on raw materials the paint quality will be affected."

"The cost of all building materials has been going up," he added. "Contractors and construction companies are facing cost overruns. We are absorbing part of the high raw material costs and passing on only a portion of the increase to end users."

Interdeco produces 12,000 tonnes of decorative paints a year at its Al Quoz factory and supplies paint to major projects such as Healthcare City and Silicon Oasis.

An official source at the Arab Technical Establishment, a supplier of Jotun Paints, said the company announced the raise in April.

"The price of a 20-litre drum of red emulsion has gone up from Dh250 to Dh280. The price increase covered all Jotun paint products. We don't know whether there will be any new price revisions."

Project Engineer Abraham Kuriakose of Al Abbas Salari Contracting said: "The impact of high prices on building costs will not be much because painting accounts for five to eight per cent of the total. However, since all other raw materials are going up, the increase in paint prices will push up construction cost in the UAE."

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