Paint Power
    Category: Companies & People By : Shintya Felicitas Read : 1314 Date : Friday, November 10, 2017 - 09:33:03

    The paint and coating industry is one of few businesses in Indonesia where strong domestic players take up to 80% of national market share. A leading industry player is PT Avia Avian, which claims its sales growth was 30% year-on-year in 2017 in spite of a sluggish property market. Its sustainable success makes the 39-year-old company confident enough to plan an initial public offering worth Rp 3 trillion next year.

    Avian’s journey began in 1962 when Soetikno Tanoko, 87, opened a small paint store in Malang, which acted as a distributor of paint products from other manufacturers. As the business grew, suppliers could not keep up with demand, so Soetikno then started to mix some paints by himself. “Some of the paint producers broke their promises, and we were often disappointed. I remember my father said if we have our own factory, we should not do that to our customers,” says Soetikno’s son Avian President Director Wijono Tanoko, 65. 

    In 1978, Soetikno finally decided to establish his own paint factory in Sidoarjo, naming the company PT Avia Avian, with just Rp 2.5 billion in initial investment. Back then, the market was dominated by foreign players and multinational companies.

    Now, Avian has its main plant in Sidoarjo plus factories in Serang and Medan. A fourth factory is being built in Cirebon, which is projected to become the largest paint factory in the country. Annually, the company produces 200,000 tonnes of paint, with more than 20 brands and 50 variations. Its best-selling products are three brands: wood and metal paint Avian, wall paint Avitex, and waterproof coating No Drop. These three accounted for 80% of sales.

    Avian Brands Vice President Director Ruslan Tanoko, 42, the third generation in the family business, says Indonesia still has plenty of room for growth for the paint industry. In 2014, Indonesia’s domestic paint consumption reached 877,459 tonnes. Researcher Euromonitor estimates that Indonesia will have a 9.8% CAGR for the paint and coating industry from 2016 to 2021, reaching Rp 41 trillion by 2021, with decorative paint accounting for 55% of all paint sales in Indonesia. Increased infrastructure and residential construction should help support the growth of the paint market in the country.

    Ruslan claims that his company’s market share is currently under 30% but it keeps growing. “We keep taking market share from our competitors, since many foreign or multinational player face challenges to distribute their products to 17,000 islands in Indonesia. Meanwhile, we own 67 marketing depots and have a partnership with around 40,000 construction material stores, so we can give better and faster services,” he explains.

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