Russian Coatings Overcomes Challenges, Enjoys Growth in 2020

At $103 million in sales in 2020, Russian Coatings JSC, a subsidiary of Industrial & Investment Group Spektr, is ranked 80th in Coatings World’s Top International Companies, and is a major player in the Russian coatings business.

Russian Coatings is focused on five primary markets: auto refinish (26.7% of sales); architectural coating (20.86%), powder (20.66%), industrial (19.38%), and automotive OEM (9.54).

Russian Coatings CEO Valeriy Abramov gave an update on the latest news at Russian Coatings, noting that 2020 was relatively good for Russian Сoatings.

“There is definitely something to be proud of: demonstrating this are both the final figures and the projects that have been implemented, despite all the difficulties of 2020,” Abramov reported. “During the year, the company’s enterprises produced 36,800 tons, which is 2.5% more as against 2019. The sales growth in money terms has increased by 5%. The overall result always depends on all processes: the sales, production flexibility, logistics and personnel, all are of importance.”

Abramov observed that some businesses showed a steady growth in sales. For example, decorative materials were up 12.5%, car refinish by 10% and powder coatings by 9%. A serious decline was observed in OEM business, whereas in the industrial materials segment it was only a minor decline.

“Failures are mainly explained by the fact that during the pandemic, the clients could not work at full capacity,” he added. “The second quarter turned out to be a failure; the situation began to level out in the third quarter which made it possible to end the year with good indices. The most confident was the building structures segment of industrial coating materials. Sales of anticorrosive coatings accounted for 115%. The sales pattern has been changed in terms of decreasing the number of low-margin products, and appearing of new modern niche products.”

Abramov noted that growth in the shipbuilding market had a positive effect on the sale of RK-MARINE trademark materials.

“About 40 ships were coated, with the result that RK-MARINE products have been included into new shipbuilding projects,” he observed. “Good reviews from consumers were obtained on RK-AVIA materials. The production decrease of passenger cars in Russia had a negative impact on the results of OEM business, i.e. of coating materials for passenger vehicles: the production output and sales volume have been reduced.

“In general, the cars refinish business was developing not less successfully: the foreign economic activity and the VIKA-shop online store did not cease; the work has been started with the largest marketplace OZON; the new ARMAX tinting system has been successfully tested by partners. All this allowed to raise the sales by 10%.”

Abramov pointed out that the decorative paint materials segment increased the production of water-based materials up to 8,000 tons, with the total sales of finished products amounting to 14,700 tons.

“The coronavirus pandemic has significantly impacted the decorative paint market,” Abramov observed. “Its fall accounted for 6%. The drop in the population incomes caused a decrease in demand for construction and finishing materials and its shift to cheaper segments. However, at the same time, we received the growth in indices by 14%. This was facilitated by the search for new working methods in the market, new ways of our business development.

“Development of existing facilities and introduction of innovative industrial solutions allows the company to be a member of the top five players in the Russian market for a long time,” Abramov concluded. “The company actively cooperates with government agencies to represent the industry interests, takes part in the development of legislative acts and regulations for manufacturers and consumers of coating materials, and participates in the Responsible Care program. The company is a member of Centerlac, the coatings manufacturers association. For several years the Government of Yaroslavl region has been declaring the company as the enterprise with high social responsibility.”