Latin America Reports

Colorin expands capital

By Charles W. Thurston | July 14, 2008

Colorin is riding the wave of Argentina's economic expansion.

Argentine paint manufacturer Colorin Industria de Materiales Sinteticos S.A. is taking advantage of strong economic expansion in the country and issuing 4.1 million shares on the Buenos Aires Stock Exchange to facilitate debt restructuring. The company has experienced a boom in sales last year, from $73 million in 2006 to $117 million, and now controls about ten percent of the total national market for paint and coatings.

Colorin sales this year are likely to follow gross domestic product growth, expected to be about seven percent, according to Marina Ceredas, the company director of marketing, in Buenos Aires. Profit for the company, led by President Xavier Champenois rose by approximately 50% in 2007 to $37 million.

Colorin has approximately 220 employees and produces paints, enamels, varnishes, thinners, solvents and other products for the architectural, automotive refinishing and industrial segments, at plants in Bernal Oeste, within Buenos Aires province, with a capacity of 24 million liters per year, and in San Luis, with a capacity of 24 million liters per year. Most production now takes place at the San Luis unit. The company is 87.8% owned by Spain's Materis Paints Espana, which, in turn, is controlled by France's Lafarge Peintures.

Colorin's continued growth in Argentina is challenged by the specter of inflation, which rose to 8.5% last year. Rising energy costs also are a challenge for the company. Within the paint and coatings market, Colorin notes that there is increasing competition among paint distributors, which have expanded their networks over the past few years. Marketing of brands thus has become more crucial to sales growth. Last year, Colorin appointed Ceredas to reposition the company's brands.

"We are repositioning the brands through print and radio campaigns, and redesigning packaging to increase appeal to consumers," said Ceredas. Among new marketing campaigns, the company has introduced a new rectangular one-gallon plastic pail of its premium Colorin Living brand interior architectural paint, through a co-branding with Living magazine, a leading lifestyle publication in Buenos Aires. "The pail was designed so that consumers can fit a roller into it and still reseal the package," she said. Over the past year, Colorin has launched a new website as well.

Colorin estimates that the architectural segment corresponds to approximately 70% of the total national paint market, and that within the architectural segment, 80% of sales are water-based, while 20% are solvent-based. Industrial paints represent approximately 12% of the total national paint market, Colorin estimates. The company also estimates that automotive repainting segment represents seven percent of total national sales.

Among main Colorin brands are: Vitrolux, gloss paints and coatings for the architectural and industrial segments; Comodin primers; Thermocontrol exterior architectural paints; Emocion, latex interior architectural paints; MMB automotive refinishes, and others. The company identifies its primary competitors as Alba S.A., Sherwin-Williams, Tersuave S.A. and Sinteplast S.A.

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