[Asia Economy Reporter Kim Jong-hwa] Domestic paint companies are simultaneously raising their prices. This is because the cost of raw materials has skyrocketed, making it difficult to bear production costs.
According to the industry on the 18th, the five major domestic paint companies, which occupy about 90% of the domestic paint market, raised product prices by an average of about 10% twice in April and May, and are now pushing for another price increase.
Noru Paint has already raised prices by about 7-10% per product since last month. Gangnam Jevisco also raised product prices by an average of about 15% since the end of last month. Since Gangnam Jevisco did not raise prices in April and May, the increase this time is relatively larger compared to other companies.
Samhwa Paint and KCC plan to raise prices by about 10% on average within this month, and Chokwang Paint plans to raise prices by about 5-20% per product by December at the latest.
Paint is made by mixing thousands of synthetic chemical substances. When the price of raw materials to be mixed rises, production costs inevitably increase as well. The extent of the price increase varies depending on which ingredients are added more according to the product's function.
In fact, the raw material that accounts for the largest proportion of paint raw materials is resin (32%). Noru Paint purchased resin at an average of 3,005 KRW per kg in the third quarter of last year, but bought it at 3,631 KRW per kg this third quarter, a 20.8% increase. Samhwa Paint had to purchase resin, which was traded at 2,491 KRW per kg during the same period, at 3,187 KRW per kg this year, a 27.9% increase.
The raw material with the highest price increase is solvent, which accounts for 12%. Noru Paint had to purchase solvents, which were 1,460 KRW per kg during the same period, at 2,477 KRW per kg, a 49.6% increase. Samhwa Paint purchased solvents at 1,365 KRW per kg during the same period, a 47.7% increase from 976 KRW a year ago.
Other materials such as pigments and additives were also traded at prices that rose at least 12.6% to as much as 31.3%, making price increases inevitable according to the companies. Price hikes by global paint companies also spurred domestic companies to raise prices. AkzoNobel, the largest paint company in Europe, announced a 9% price increase this year and plans an additional 15% increase by December, while India's Asian Paints and Berger Paints also plan to raise prices by 8-9% this month.
An industry official said, "The global supply instability of raw materials continues due to the strong dollar, rising oil prices, and power shortages in China causing some industries to halt operations," adding, "With the continued rise in raw material prices, difficulties are expected not only in the fourth quarter but also through the first half of next year."
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