In a bid to overcome the tough business conditions affecting the low-margin paints industry, Al Gurg Paints (AGP) is rolling out a slew of marketing initiatives to steer the company to new heights, this year. 

The company is focusing on its homegrown brand Oasis, which was relaunched last year and has now achieved the highest growth in volumes, says AGP general manager Sunil Gudur.

In addition, the Sharjah-based company plans to roll out its newly developed `Wood Coatings range’; explore possibilities of expanding its product portfolio as well as dealer base; and garner more projects. The company is also expecting some major gains by venturing into some new markets in exports. 

“In exports, some major hot leads are being pursued for newer markets which are likely to bear fruition in early 2017,” he says.

According to him both domestic and exports paints markets have been witnessing a slowdown on account of tight liquidity conditions as well as instability and currency devaluation in the African markets. 

“Unfortunately the markets have gone into a slowdown mode – primarily due to the liquidity crunch as also the major regional events like Expo 2020, FIFA 2022 are still some distance away and momentum is expected to pick up around third or fourth quarter of 2017.

“The current year is likely to be a mirror image of 2015 and the upward movement is anticipated only late 2017,” he says painting a not-so-rosy picture of the paints industry.

STRENGTHENING OASIS 

For now, the company is continuing to expand the customer base of its price-competitive label Oasis, and aims to make it a bestseller – in domestic as well as exports market – by continuing to position it on the quality and `value for money’ proposition.
 

AGP’s basket of paint brands

AGP’s Oasis brand of paints has traditionally been a strong player in the general industrial category, focusing on the highly competitive domestic decorative segment as well as exports. 

“Efforts of promoting Oasis brand is gaining traction albeit slowly (in the dealer, projects, general industrial and export segments) due to the afore mentioned reasons but the feedback with respect to quality and value for money proposition has been very encouraging,” he says. 

“The trend will continue to increase and we are aiming to make Oasis a major bestseller as the brand’s positioning on the value proposition of `premium quality at affordable price’ is catching up,” he adds.

To grow and rejuvenate its domestic brand, AGP has made some major investments like refurbishing of its showroom in Al Satwa (Sharjah) as Oasis Colour Lounge, which has been completely rebranded with Oasis brand imagery to increase the overall retail experience.

The brand has also made some major gains in the general industrial segments with accounts like Zamil, Extraco, German Steel and others. Additionally, Oasis has started making its presence felt in the projects segment with the Indian High School at Abu Dhabi, Dubai University, Twin Towers at Al Barsha, City Walk Clinic and others in its portfolio. 

In exports, on one hand, Gudur claims that Oasis has taken leadership position in markets like Gambia and on the other, made forays in new markets like Senegal, Sierra Leone and Guinea. 

“Some exciting developments are on the anvil in the markets of Algeria in the near future,” says Gudur.

NEW BRAND STRUCTURE

AGP’s full focus on its price competitive brand Oasis is well understood. Part of the Easa Saleh Al Gurg Group, one of the top family-led conglomerates in the GCC, AGP was hitherto licensee of world-class brands like Dulux, which caters to premium needs in the decorative segment, and Leighs, which offers robust coatings for the heavy duty segments such as the oil and gas, petrochemicals, and heavy industries.
 

AGP’s Oasis brand ... a strong player in the industrial category

However, early this year, the parent company Easa Saleh Al Gurg Group signed a joint venture with Akzo Nobel to market the Dulux paint brand in the region. 

“While earlier all the three brands – Dulux, Leighs and Oasis – were contributing equitably to the overall revenue of the company, with the change in the relationship with Akzo Nobel, the share of Oasis and Leighs have increased,” he says. 

AGP, however, continues to toll manufacture the Dulux range for the joint venture in addition to Leighs and Oasis brands. “Value-wise, Leighs, has shown a good performance,” he quips.

Overall, AGP has maintained a supply of over 15 million litres per year with the three brands contributing more or less equally. 

AGP’s manufacturing and quality control facilities are also attracting toll manufacturing opportunities and it is using its spare capacity to ramp up production volumes. 

Currently, the company has no expansion plans. However, Gudur says that period improvements in counterbalancing equipment is a continuous activity in the areas of filling, tinting and grinding.

“We already have developed an exciting `Wood Coatings’ range and the products will be launched in the market this month. We hope to make a positive impact with the range in both B2B and B2C segments,” explains Gudur.

The plan to introduce its new range in Wood Coatings as well as completion of developmental activity of Trukote range of coatings in the high performance coatings segment are some of the recent activities undertaken which are expected to provide good additional volumes in the future. Also, AGP will soon provide application services for villas, offices and residential projects in line with industry demand to offer one-stop painting solutions.

PRIME PROJECTS

The company has supplied to some prominent projects. While its Dulux brand has been used in projects such as the Cleveland Clinic in Abu Dhabi, Four Seasons Hotel in Abu Dhabi, Leighs label has been supplied to The Boardwalk at the Palms, Jumeirah Open Beach Project at Jumeirah and a few prestigious project for ADMA –OPCO. 

Oasis has been supplied to Dubai University; Indian High School at Abu Dhabi; and City Walk Clinic at the City Walk Dubai. Some of the iconic projects executed in the past have been – Trident Towers at JBR (Dulux), Mirdiff Villas (Dulux), Taj Exotica (Dulux), Arabian Ranches (Oasis & Dulux), Rosewood Hotel Abu Dhabi (Dulux), Panorama at Greens (Dulux), various projects in oil and gas segment through reputed contractors like Thysen Krupp, Eversendai, Fabtech, Belleli and Tiger Steel. 

Giving his projections for the industry, Gudur maintains: “It appears that slackness will continue at least till 2017 after which I anticipate that the Expo 2020 event should result in the projects taking off. Also, the geo-political stability will play a crucial role in ensuring minimum disruptions on the economic recovery front. 

“Also, newer brands like Kansai, Al Jazeera and Benjamin Moore have entered the already saturated market and now the pie is being shared by more players whereas the size of the pie has remained the same,” he concludes.