Weakening regional currencies hurting our business, paint maker says

By Steve Umidha

Paint manufacturer, Crown Paints has expressed fears that weakening of EAC currencies is having a negative effect on its business.

The revelations were made yesterday during the firm’s Annual General Meeting despite Crown Paints having registered a 12per cent revenue growth in turnover to record Sh6.7 billion for the period ended December, 2015 compared to Sh6 billion a year earlier.

“The devaluation of our local currencies has been a major threat to the financial performance of our business,” said Rakesh Rao, Chief executive of Crown Paints.

Rao made the remarks while addressing shareholders saying the company will now target the government’s planned roll out of infrastructure projects to scale up its business portfolio and boost revenues in an effort to cover up for the ‘foreseen’ threat.

The NSE-listed firm said that it will take advantage of the Road Annuity Programme (RAP) that seeks to construct 500kilomtrers of roads across the country to increase the uptake of its road marking and reflective paint products.

“We hope that this doesn’t continue for long so that we can manage the costs of raw materials and overall business margins. Added to this are the massive infrastructure projects underway and the robust construction industry that are all key markets for us, also the Government’s commitment to support local producers gives us confidence to forecast a healthy business growth for the Company, especially for our road marking and reflective paint products,” said Rao.

During the 59th AGM held Tuesday, the firm recommended a dividend payment of 12per cent or Sh 60 cents per share for the year ended 31 December 2015.