Optimism is Colombia's homeland

by Santiago Jaramillo H.

After the generalized crisis in the world productive sector, Colombia, despite being a country in full development, and therefore full of opportunities in terms of the paint market, has not been oblivious to the reality that surrounds it and in many of its business segments has suffered the blow of the hurricane that has caused havoc with many of the most solid economies.

However, the airs of optimism and recovery have also reached the bulk of companies belonging to the paints and coatings industry in Colombia, which do not hesitate for a moment to aim to maintain their growing presence in the market, both local and international.

Each of the companies invited to this edition of INPRA LATINA magazine made known their experience regarding the current crisis, at the same time delved into their concerns for the future, but the most remarkable thing, made evident, from their business perspective, the alternative solutions to overcome the problem.

Regarding the balance sheet that the paint industry in Colombia throws up, after surpassing the first half of 2009, some businessmen speak with positive solvency, others, a little more cautious, hit a tense calm in the behavior of the market, but what is clear is that the thought is set on what will come in the future.

"I would say that the balance so far is good (...), we met expectations and we are within budget, basically because of the issue of the projects that had been formulated since the previous year and that were practically awarded in that same year. I estimate that for this 2009 we may have some difficulties at the end of the second semester, perhaps because there were many projects dammed in the first half of the year and still the investor is thinking what is going to happen?, where is the situation headed?, but in general terms we could consider that everything is within the budgeted", said Quilyam Casallas, account manager of the Contractors Business Unit of the company Sika Colombia.

For his part, Juan Carlos Velásquez, manager of the Maintenance and Marinas line of the Global Paint Company Pintuco, indicated that "this has been a difficult year in which we have defended ourselves well despite the crisis and we hope that the second semester will be better than the first, but obviously the recession began to be felt at the end of last year, although with greater intensity in this first part of 2009. Despite this, we are optimistic and think that the second half will be better and that it will be able to compensate for the falls that could be presented in sales in the first half."

Velasquez also added that "in general all paint lines have been affected in sales this year, partly by the global crisis, and partly by credit difficulties which is obviously also related to this. Similarly, the fall in construction in the country has also affected sales of the construction line."

Regarding the investigations, Iván Martínez Ruiz, advisor in Research and Development of the company Pinturas Novaflex - Princolor S.A., stressed that "these have been postponed for the most part, attending to the need for prudence that the conjunctural situation deserves. However, all those that allow us to verify the quality of our products in the presence of the client have been well received, a situation that makes it possible to provide a better service and optimize resources. Considerable investments have also been made in terms of improvements in the production and logistics processes of the finished product; as well as having a greater responsiveness and improving the quality of customer service have been clear objectives in the last year," he said.

Meanwhile, Casallas referred to the alternatives pursued by his company, mentioning that "we are looking for market niches basically in the industrial sector, investigating situations in which there are very specific applications, where there are aggressive environments in very specific equipment and that generate problems of integrity to the asset in an industry".

In the case of Pintuco, Velásquez stressed that "we are in the process of implementing International technology for Colombia and Ecuador, since we have already had it in Venezuela for many years, and we are trying to explore other technological partnerships for lines other than industrial maintenance."

Regarding the implementation of International Paint's technology, this company is already manufacturing products in Colombia and is advancing the homologation process with other companies.

"The most important market segment finally for us continues to be the industrial sector, everything that has to do with products of high chemical resistance and products for environments of high aggressiveness, basically dedicated to the industrial maintenance sector in chemical plants, petrochemicals, maritime industry and in structural elements that are going to be located in very aggressive environments", recognizes the representative of the company Sika Colombia.

For his part, Martínez delved into the fact that his company's efforts are focused on four main objectives that aim to investigate, understand and meet the needs of customers. These objectives are: "achieving new alternatives of high quality raw materials and accessible and sustainable costs, increasing the quality of the products in those properties critical in terms of product performance and durability of the application; achieve products that are friendly to the environment and the safety of the applicators, but at the same time they are of high quality and accessible from the costs to the final consumers. Finally, to obtain a better management of innovation and its communication to customers, "said our guest.

He added that "in the end it is they (the clients) who must provide the new needs and validate the results of the investigations that seek to satisfy them."

Regarding the balance in terms of research that the first half of 2009 shows, Martínez clarifies that in his company "progress has been made in relation to achieving complete portfolios of water-based products in most applications. Another considerable advance is the inclusion of permanent biocides in the coating films, with them, constant protection against the growth of microorganisms on the treated surface is guaranteed".

Caution when investing
Due to the crisis, most companies in Colombia have had to put their investments in waist and, for now, in the business environment of this country reigns caution in favor of preventing a possible fall.

"Most of our investments are focusing on infrastructure works that in a certain way were raised before the beginning of this crisis, and in some very particular cases and with some relevance in the hydrocarbons sector that finally is a sector that we could say does not have a crisis because crude oil has had a good rebound and additionally there were some projects already formulated that at this moment are being revived, then it is the sector that is finally energizing the coating manufacturers' industry," Quilyam Casallas said optimistically.

The representative of the Global Paint Company Pintuco indicated in this regard that "we really did not have large investments planned, obviously there is a restriction of expenses at all levels. If the market does not grow, it does not make much sense to make many investments. Another issue that is affecting us are exports to Venezuela that are increasingly complicated by the difficulties that Cadivi (Foreign Exchange Administration Commission) puts on imports into this country. Therefore, Venezuela being our main trading partner, because production is also affected," said Velásquez, who also indicated that "quantifying is a bit difficult, but we estimate that between 5 and 10% of this year's sales may be affected by the export crisis to Venezuela."

Exports and imports
"We are trying to diversify more towards other markets such as the countries of Central America and some others in South America, already in Peru we have offices for more than two years and in other countries in this area we are in the process of signing alliances, because we must compensate for the lack of business with Venezuela, since we know that the future in terms of negotiations with this country are very uncertain, then we have been forced to look for more stable economies, "said the manager of the Maintenance and Marinas line of Pintuco.

"Exports have had a decrease, so it is not prudent at this time to generate export projects because much of the infrastructure works in different countries have stagnated. We have felt here in the country an important boom in the import of products, basically because many industries in other parts of the world have been aligning their ranks towards the industrial maintenance sector or the infrastructure sector because the automotive sector slowed down considerably. So, all the infrastructure that was installed and that was used by the automotive sector is being directed towards industrial maintenance and the manufacture of high-tech products, this makes a lot of imported product reach the country and, additionally, the behavior of the currency makes this easier for importers, "acknowledged the account manager of the Contractors Business Unit of the company Sika Colombia.

Meanwhile, the representative of Novaflex - Princolor S.A., a company that only serves the local market, indicated that "at the moment we are focused exclusively on the Colombian market and firmly believe in the enormous possibilities of it for those who are innovative producers and know how to satisfy the customer."