Chemstar Paints explores local raw materials sourcing for profitability
Rewards distributors with cash and gifts
Not deterred by projections bordering on a challenging operating fiscal year for manufacturers, Chemstar Paints Industry Nigeria Limited has expressed optimism of improved profitability, adding that measures are underway to explore sourcing of raw materials locally.
The Group Managing Director and Chief Executive Officer (CEO), Chemstar Paints Industry Nigeria Limited, Aderemi Awode, explained that the company would deploy effective marketing skills to stimulate demand for its product, maintaining its sourcing of raw materials locally would help the firm save foreign exchange.
Awode who made this known during the company’s 2015 customer forum, pointed out that the company which currently imports about 60 per cent of its raw materials for production, has continued to maintain its share of the market through aggressive marketing and also courtesy of its loyal distributors despite the harsh business terrain.
“We have been doing quite well despite the challenging period we experienced last year, we are still able to maintain our own share of the market through aggressive marketing and with the loyal distributors that we have. We expect that despite the challenges, we will still come out with a successful year,” he added.
The company however rewarded its loyal distributors with mouth-watering cash and gift items, saying that the customers’ forum was an avenue to reach out to its numerous customers across the country for the volume of businesses they did during the year under review.
In his words: “Last year was a challenging year and we expect this year to be more challenging particularly for the manufacturing industry and even for the paint industry where we operate. About 60 per cent of our raw materials for production are imported. As you all know there is a problem of accessing foreign exchange where exchange rate has moved from N200 official rate to about N340 at the parallel market, representing a significant increase in the cost of production and since we have to source a lot of our raw materials from abroad, in the long run, it would lead to an increase in the price of paint products.”
According to him, apart from the major and obvious challenges facing the manufacturing sector such as the decay in infrastructure facilities, multiple taxation from various regulatory agencies among others, the company had also been faced with the challenge of adulteration where its products had been faked for many years, but stressed that the company has taken proactive measures by coming up with a lot of initiatives to address the challenge.
“We have been able to reduce this menace by changing our packaging two years ago thereby making it difficult for people to adulterate our products.