Brazil's estimated $1.5 billion paint and coatings industry is embracing a national construction quality program which includes manufacturer and contractor registrations that will be required for sales and services to participating city, state and federal organizations. The national association, Associacao das Fabricantes de Tintas, or Abrafati, is spearheading the program for the paint and coatings sector through its broader internal program for architectural paint quality, now three years in development, since a large portion of the market for the estimated 750 million liters of architectural paint produced in the country could ultimately be affected.
A number of manufacturers of architectural paint now are in the process of being certified for adherence to the Abrafati quality program, Programa Setoral de Qualidade Tintas Imobiliarias, or sectoral program for architectural paint quality, including BASF, Duvinil, Eucatex, Hydronorth, Iquine, Realplast and Resycril, apart from those already certified, according to a recent statement by Dilson Ferreira, executive president of Abrafati in Sao Paulo. Manufacturers already certified by the program include Cartint, Dacar, Killing, Renner Sayerlack, Sherwin Williams, Sunshine, Tintas Coral and Universo Tintas. A black list of 12 manufacturers whose products consistently have failed quality testing also is posted on the federal program website.
With an initial focus on less economy-line latex paints, the Abrafati program is now encompassing all segments of latex as well as synthetic enamels and leveling mixes. Several lines of paint have been reformulated and some have been discontinued, according to Ferreira.
Thus far, 24 states and a number of cities in Brazil have joined the national program, the Brazilian Program for Quality and Productivity in the Environment, known as PBQP-Habitat. Approximately 3,000 individual contractors also are in the process of being certified for the program, according to the federal ministry of cities. The federal mortgage lender Caixa Economica Federal, among other banks, also will limit loans to projects with certified materials, the ministry indicated.
Pressure on Brazil's estimated 110,000 retail vendors of materials also may come from distribution of the blacklisted manufacturers to the vendors, Ferreira suggested. Overall, sales for the paint and coatings industry in Brazil should continue to warm for the remainder of 2006 and through 2007, following if not leading gross domestic product (GDP) expansion. GDP growth this year is pegged at three percent compared with 2.3% in 2005, according to the Latin American economic analysis team at UBS Warburg, led by Michael Gavin, in Stamford, CT. The UBS forecast for growth in 2007 is for 3.5%. An important facet of the economic expansion in Brazil is the rise in per capita GDP, which this year will cross the $5,000 barrier, up from $4,200 in 2005, and rise to a projected $5,250 level in 2007, according to UBS data.
Brazil's government is working to alleviate an estimated seven million unit housing shortage at the rate of approximately one million units per year. Taxes on key construction materials, including paint have been reduced to further stimulate housing improvements.