by Shem Oirere
Africa Correspondent

Crown Paints Group, a leading Eastern Africa paint manufacturer, has proposed a new emulsion paint binder factory and plastic injection molding plant as the company seeks to wean itself from reliance on imports, cut down on the cost of sales, and hence ease price pressure on its customers across the region.

The company will, if all necessary government approvals are granted, construct a KES 141,200,000 (US$1.1 million) plant for the manufacture of emulsion binder, a raw material produced through
emulsion polymerization. 

According to the brief on the project, this entails “the reaction of relatively water-insoluble monomers such as styrene and butyl acrylates leading to submicron latex particles dispersed in aqueous phase with the aid of surfactants, catalysts and stabilizers.” 

The raw material accounts for 80% of the feedstock Crown Paints’ uses in production of its products, including decorative, automotive, industrial and road marking paints.

Emulsion Binders

The group, which is listed on the Nairobi Stock Exchange, has operations across Eastern Africa through its subsidiaries of Crown Paints Kenya PLC & Crown Paints Allied Industries Ltd, Regal Paints Uganda Ltd, Crown Paints Rwanda Ltd and Crown Paints Tanzania Ltd. 

Crown Paints Group imports an estimated 600 to 700 metric tons of emulsion binder every month, driving up the cost of production and impacting the pricing of its products.

A report by a group of environmental experts contracted by the company to carry out an environmental and social impact assessment study for the proposed emulsion paint binder factory and a plastic injection moulding plant, said that currently, Crown Paints sources plastic buckets for packaging of its paints from different plastic buckets manufacturers locally. 

This leads to different dimensions and designs of the plastic buckets. To address this challenge, the company plans to construct a modern state-of-the-art plastic injection molding plant at Lukenya, Machakos County, which is less than 40km from the capital of Nairobi.

The project, the report said, will enable Crown Paints Ltd to “reduce by 50% of importation and shipments of emulsion binder as water is the other 50% component.”

The company, it added, will “reduce the import and handling costs and transportation importation and shipments of emulsion binder.”

It said the proposed plastic injection moulding plant would enable Crown Paints to embrace the latest technology in the processing of raw materials such as plastic pellets (resin) and additives such as polypropylene master batches, and “will ensure the proponent’s manufactured plastic buckets will have consistent design and quality.”

Utilizing Renewable Energy

In what appears to be a strategy by Crown Paints to reduce GHG emissions from its operations by 15% by 2030, the company also proposed to install solar photovoltaic (PV) systems at the new plant. The company said this new system will “offer significant environmental benefits compared to fossil fuel sources.”

The solar PV systems, the report said, will offer the primary power sources. Other sources, including Kenya Power and Lighting Company, an electricity distribution company, and a liquefied petroleum gas-fired generator, will be used as back-up power sources. 

 By 2023, Crown Paints reported it had realized 160.6MWh of solar energy as the company invested more in the improvement of its energy efficiency through the upgrading of its facilities “with energy-saving lighting and incorporating renewable energy sources wherever we can.”

“Crown Paints is committed to reducing our energy-related emissions throughout our operations to minimize our climate footprint, including maximizing efficiency in our operations,” a previous report to shareholders said.

The new project’s planned energy component affirmed Crown Paints’ desire to “continue to find ways to improve energy efficiency in our operations to reduce our total impact on the environment.”

Higher Raw Material  Costs

Moreover, the planned investment in a new emulsion binder manufacturing plant coincides with a time when the company continues to report an increase in the cost of sales driven by the higher prices of imported raw materials for making paint.

For instance, the group’s subsidiaries in Tanzania and Uganda expect a 29% and 15% increase in the cost of sales by 2027 and 2029, respectively.

Crown Paints reported that its turnover for the year ended Dec. 31, 2024 grew by 8% to KES 13.5 billion (US$104 million) compared to the previous year. The company is optimistic that the growth of the region’s key paint consuming industries, such as construction and automotive, as well as fast-growing urbanization and industrial development, would continue driving demand for its products. 

This explains the need to invest more in infrastructure that would reduce sales and operational costs, hence making the company more competitive.

Early last year, Crown Paints said the Eastern Africa paint and coatings market recorded an increase in demand for high-quality, durable, and sustainable paint solutions – “a trend we were well-prepared to capitalize on, thanks to our prior investments in innovation and product development.”

“Despite ongoing macroeconomic challenges, we project continuous revenue growth, driven by market expansion, continued product innovation and rising demand for environmentally sustainable solutions,” said Rakesh Rao, Crown Paints Group CEO.

Despite Crown Paints’ anticipated expansion of its manufacturing footprint in Eastern Africa, the company has, for the past three years, reported suppressed demand for its premium products because of inflationary pressures and the entry of new players in the region’s market.

However, with the increasing public and private investments in Eastern Africa’s infrastructure, such as in transportation, energy and housing sectors, as well as the growing appreciation by consumers of low volatile organic compounds and environmentally responsible paint products, the investment by Crown Paints in a modern emulsion binder plant may have come at an
opportune period.