Crown Paints expects the cost of raw materials to drop in the second half of the year, giving it an opportunity to grow its margins or reduce prices.
The price of basic colourants such as mineral resin, titanium oxide, pigment solvents and additives has dropped by up to 25 percent over the past six months as their demand globally went down.
Its impact on paint consumers will take months as manufacturers clear expensive stocks acquired at the height of the Covid-19 pandemic when shipping and warehousing costs went up.
“The indication came that the prices of raw materials were coming down but this has not impacted us because there is always a three to six months cycle after we order raw materials,” Crown Paints CEO Rakesh Rao told Business Daily.
The demand for home improvement products had gone up by 20 percent over the past two years of Covid-19 lockdowns, the paint firm said.
As normalcy returned, people channelled their money to other priorities including clothing and travel, meaning the desire to paint homes declined and hit demand.
Freight charges are also set to ease as logistical hiccups clear out, resulting in a smoother transit lifting manufacturing.
“We expect to start feeling the reduced raw material price in the second half of 2023 but this depends on how the dollar behaves,” Mr Rao said.