‘The quality of paints will really get worse’
Last week, Finnish paint and varnish manufacturer Tikkurila announced its exit from Russia. Two Kazan stores will likely continue operating, but there can be problems with supplies, therefore it is recommended not to put off shopping for a long time if needed. Realnoe Vremya talked with Director General of Engineering Production and Trade Company Rustam Ganiyev about what the exit of one of the biggest paint manufacturers can lead to and if it can be replaced.
“A fight for the vacant niche will quickly break out”
How can this decision influence the Russian market?
Tikkurila controlled its segment of the market well. They worked both in big projects, often with permanent partners and dealt with retail trade but never was a mass market brand. The exit of Tikkurila won’t change anything globally for the market. But it will be hard to occupy its niche quickly.
The problem is that not only Tikkurila is leaving — big concerns like BASF and PPG are leaving too. These brands had a bigger spot on the market, this is why this is the problem.
How important Tikkurila is for our country?
It is important enough — its paints are one of the highest-quality, without doubt. However, this doesn’t mean that with the exit of Tikkurila, BASF and PPG, we will lose this market. In contrast, there is a fight for the vacant niche will quickly break out. Though it seems to me the quality of paints will really get worse, at least for some time.
What Russian companies could replace Tikkurila and can they do it?
Of course, they can replace, but not 100%, and here is why.
None of our companies will likely be able to guarantee the unchangeable quality the same Tikkurila guaranteed thanks to its quality control system and well-oiled production processes. Our manufacturers’ paints are often producers according to specifications, not a standard, and this is a completely different product quality.
Also, the problem is that Russian producers brought 80-90% of feedstock for paint production from abroad. For instance, hardeners acryl and polyurethane materials. Nobody makes them in Russia, so now it is impossible to get them.
“The exit of Tikkurila and other players is a loss of a quality product that was habitual for Russians”
Can Russian paint and varnish manufacturers compete with foreign ones?
Quality paints cannot be cheap. It is impossible physically. Our Russian producers unlikely can quickly create competition when it comes to quality.
Will prices for paints and varnishes of other companies change after the leave of the Finnish producers?
It is highly likely it will be bought for new prices. In any case the products of the brands that left will have to be replaced in the market, and while precisely Russian manufacturers will be a substitute first, their plants already operate here. The image issue is more important. Many purchasers, wholesale and retail, have certainly heard about Tikkurila and were sure of their quality products, though perhaps they have never used it. It is not for sure the same will happen to Russian companies.
Who will suffer from this decision the most, Russia or Finland?
Everybody will suffer. Russia, Finland, consumers, workers of Russian enterprises of the brand, of course. The exit of Tikkurila and other players is a loss of the quality product that was habitual for Russians, a loss of a big company with a good image that created jobs and paid taxes here. Also, the leave of the company in which a lot of people of a region work is always a loss of jobs and quite serious problems for this region. Workers of such enterprises are specialty professionals, it will be harder for them to find a job because there aren’t a lot of enterprises of this kind.