𝙇𝙖𝙗𝙤𝙧 𝙨𝙪𝙥𝙥𝙡𝙮 𝙞𝙨𝙨𝙪𝙚𝙨 𝙖𝙣𝙙 𝙖𝙣 𝙞𝙣𝙘𝙧𝙚𝙖𝙨𝙚𝙙 𝙘𝙤𝙨𝙩 𝙤𝙛 𝙘𝙤𝙣𝙨𝙩𝙧𝙪𝙘𝙩𝙞𝙤𝙣 𝙛𝙤𝙧𝙚𝙘𝙖𝙨𝙩𝙚𝙙 𝙩𝙤 𝙗𝙚𝙨𝙚𝙩 𝙩𝙝𝙚 𝙞𝙣𝙙𝙪𝙨𝙩𝙧𝙮 𝙞𝙣 𝙩𝙝𝙚 𝙣𝙚𝙬 𝙮𝙚𝙖𝙧, 𝙗𝙪𝙩 𝙥𝙚𝙧𝙛𝙤𝙧𝙢𝙖𝙣𝙘𝙚 𝙬𝙞𝙡𝙡 𝙨𝙪𝙧𝙥𝙖𝙨𝙨 𝙩𝙝𝙚 2022
PETALING JAYA, 6TH JANUARY 2023 – Nippon Paint Malaysia Sdn Bhd (“Nippon Paint”) expects slow growth for the Malaysian construction sector in 2023 as labor supply issues and increased cost of operations stemming from the effects of the COVID-19 pandemic and global economic uncertainty continues to affect profitability.
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According to World Bank, unless supply disruptions and labor-market pressures subside, the economic pressure, especially rising inflation and interest rates globally, is unavoidable, which is feared to lead to a global economic slowdown.
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On that note, Kenanga Today, a research house said the tightening financial conditions, global economic slowdown, and the rising cost of living may exert downward pressure on sales activity in the next few months.
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Despite challenges, Nippon Paint Malaysia continues to fortify its position as the leading brand for coating and construction through its Total Coating and Constructions Solutions (TCCS) initiative, which foresees that the construction and property industry will be mainly focused on maintenance while there will be less private infrastructure development to spur earnings.
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“As it is imperative for companies to adapt, we suggest market players consider all options for a smooth sailing year. We always must be on our toes and be alert to changes in consumer patterns,” said Yaw Seng Heng, Group Managing Director of Nippon Paint Malaysia Group.
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In line with that, Nippon Paint has set a target to increase its market share in Business to Consumer (B2C) and Business to Business (B2B) segments to 46% and 42% respectively despite the ongoing labor shortage, delayed real estate development, and significant price hikes in raw materials.
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“While there might be challenges, we foresee opportunities in providing service to people’s housing and ongoing infrastructure works by the government. The focus shifted to the services due to the supply chain issues that we have been dealing with this year and the expected economic downturn in 2023.
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“Meanwhile, for the B2B market, we aim to widen our footprint by providing refurbishment solutions for residential, industrial, and commercial use as this is one of the ways to increase our revenue. Regardless of the market outlook, building refurbishment will not be affected as sinking fund will be collected by joint management body (JMB) and management committee (MC) for future expenditures such as large-scale maintenance on a building,” he added.
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The Department of Statistics Malaysia (DOSM) recorded the value of construction work done in the third quarter of 2022 (Q3 2022) surged 23.2% as compared to the same quarter of 2021, amounting to RM30.5 billion. The expansion was driven by non-residential buildings (37.7%), special trades (32.2%), residential buildings (17.8%), and civil engineering (14.6%) subsectors.
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Nevertheless, with Total Coating and Construction Solutions (TCCS), Nippon Paint is poised to help the professionalism and workmanship of newly built or refurbishment projects whilst giving homeowners and developers the assurance of a high-quality finishing as it acts as a one-stop solution that will lead to time and cost-savings as well as effective manpower utilization for better productivity.
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Concurrently, as Nippon Paint is expanding its products offerings through Selleys, a brand that has pioneered the home improvement category for over 80 years, it foresees the (Do-It-Yourself ) DIY home improvement segment is anticipated to be expanded due to increased efforts in homeowner education as well as rising costs in professional work.
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As for the DIY segment under its Selleys arm, it currently contributes 1% to the overall and with the rising interest in the arena, the company aims to double the contribution of Australian unit Selleys to its total revenue in 2022 and 2023 from 4% in 2021, driven by the heightened interest of DIY projects among Malaysians.
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“The DIY segment has grown tremendously in line with rising costs as well as the flexibility and personal satisfaction of fixing and decorating our own home. Besides serving the market segment, we hope that the DIY product range can widen its market footprint in Malaysia,” said Yaw.
