|Regulations Moving towards Greener Products and Localisation will bring in Market Consolidation and Opportunities for Growth in the Country|
|Stricter regulations to change supply and demand of the coatings landscape in Iran, notes Frost & Sullivan’s Chemicals Practice|
Mass and industrial production of coating products in Iran dates back to the 1940s and started with a nominal capacity of less than 20 million litres per annum in the decorative sector only. The industry has significantly developed and diversified in terms of capacity and product portfolio over the last couple of decades. At present, the coatings segment in Iran is facing an over-capacity situation with imports accounting for minor share in supply. Inappropriate go-to-market strategies, traditional management, lack of liquidity, obsolete formulation and inefficient sales channels are key restraints that hold back a positive growth in this industry. Consequently, the government is actively looking to attract international players to take a role to not only overcome the current challenges but also increase the share of coating exports from the country, from less than 2% currently to over 5% within the next 5 years. In such a scenario, joint ventures and contract manufacturing practices are expected to provide substantial opportunity for global manufacturers.