Crown Berger partners with UK firm in supply of floor materials

Paint manufacturer Crown Berger has entered into a distributorship partnership with a UK company that will see it start supplying home floor materials in an effort to tap deeper into Kenya’s property boom.

The five-year deal with Flowcrete will see the firms target the high-end market notably shopping malls, homes and office blocks and it is expected to lead to the manufacture of the flooring materials in Kenya.

It will give the UK firm a piece of the East African market and diversify Crown Berger’s product offering that has remained in the competitive homes paints market that has not benefited fully from the ongoing real estate boom.

“The products will give us a competitive edge with clients whose products need strict health and safety precautions like hospitals, airlines, food and drinks manufacturers such as brewers,” said Ian Harrison, Flowcrete managing director for Africa.

He said their products made of silver and iron are geared towards controlling the growth of bacteria that finds fertile ground in ordinary tiles.

Rakesh Rao, the managing director of Crown Berger, says the deal will reduce the risk of relying on a single product line—paints.

“Crown Berger is expected to start manufacturing the products locally if sales of the Flowcrete products grow above Sh80 million annually,” said Mr Rao.

This will place it in a head-to-head battle with firms such as Tiles and Carpet that maintains a near stranglehold of the flooring market.

It will cost property dealers a minimum of Sh3, 000 per square meter to lay the Flowcrete flooring products.

Crown Berger is betting on Kenya’s robust real property market to grow sales and cushion its earnings from the paints market that is faced with rising production costs.

Swelling incomes and rapid urbanisation have emerged as the key drivers of the country’s real estate market — which has seen home prices nearly double in the past five years that has in turn attracted investors looking to cash in on the outsized returns.

Besides boosting the economy, the hyper activity in the homes market is shaping the fortunes of auxiliary sectors such as mortgage providers, cements makers and corrugated sheets maker.

But paint makers have missed out on the boom due to a spike in production costs.

Crown Berger’s profits rose six per cent to Sh91 million in the year to December — which was slower than the 177 per cent it returned in 2009 — as it sales rose 20.4 per cent to Sh3 billion.