INDUSTRY PROFILE #14
PAINT MANUFACTURING
Prepared By
Philip Heiberger
Reviewed By
Patrick Raney
Published By
VOLUNTEERS IN TECHNICAL ASSISTANCE
1600
Wilson Boulevard, Suite 500, Arlington, Virginia 22209 USA
Telephone:
(703) 276-1800, Fax:
(703) 243-1865
Telex: 440192 VITAUI,
Cable: VITAINC
Internet: vita@gmuvax.gmu.edu,
Bitnet: vita@gmuvax
Paint Manufacturing
ISBN:
0-86619-301-4
[C] 1989, Volunteers in Technical Assistance
INDUSTRY PROFILES
Introduction
This Industry Profile is one of a series briefly describing
small or medium-sized industries. The
Profiles provide basic information for starting
manufacturing plants in developing nations.
Specifically, they provide general plant descriptions,
financial, and technical factors for their
operation, and sources of information and expertise.
The series is intended to be useful in
determining whether the industries described warrant further
inquiry either to rule out or to
decide upon investment.
The underlying assumption of these Profiles is that the individual
making use of them already has some knowledge and experience
in industrial development.
Dollar values are listed only for machinery and equipment
costs, and are primarily based on
equipment in the United States.
The price does not include shipping costs or import-export taxes,
which must be considered and will vary greatly from country
to country. No other investment
costs are included (such as land value, building rental,
labor, etc.) as those prices also vary.
These items are mentioned to provide the investor with a
general checklist of considerations for
setting up a business.
IMPORTANT
These profiles should not be substituted for feasibility
studies. Before an investment is made
in
a plant, a feasibility study should be conducted.
This may require skilled economic and
engineering expertise.
The following illustrates the range of questions to which answers must
be obtained:
*
What is the extent of the present demand for
the product, and how is it now being
satisfied?
*
Will the estimated price and quality of the
product make it competitive?
*
What is the marketing and distribution plan
and to whom will the product be
sold?
*
How will the plant be financed?
*
Has a realistic time schedule for
construction, equipment, delivery, obtaining
materials
and supplies, training of personnel, and the start-up time for the plant
been
developed?
*
How are needed materials and supplies to be
procured and machinery and
equipment
to be maintained and repaired?
*
Are trained personnel available?
*
Do adequate transportation, storage, power,
communication, fuel, water, and
other
facilities exist?
*
What management controls for design,
production, quality control, and other
factors
have been included?
*
Will the industry complement or interfere
with development plans for the area?
*
What social, cultural, environmental, and
technological considerations must be
addressed
regarding manufacture and use of this product?
Fully documented information responding to these and many
other questions should be
determined before proceeding with implementation of an
industrial project.
Equipment Suppliers, Engineering Companies
The services of professional engineers are desirable in the
design of industrial plants even though
the proposed plant may be small.
A correct design is one that provides the greatest economy in
the investment of funds and establishes the basis of
operation that will be most profitable in the
beginning and will also be capable of expansion without
expensive alteration.
Professional engineers who specialize in industrial design
can be found be referring to the
published cards in various engineering magazines.
They may also be reached through their
national organizations.
Manufacturers of industrial equipment employ engineers
familiar with the design and installation
of their specialized products.
These manufacturers are usually willing to give prospective
customers the benefit of technical advice by those engineers
in determining the suitability of their
equipment in any proposed project.
VITA
Volunteers in Technical Assistance (VITA) is a private,
non-profit, volunteer organization
engaged in international development.
Through its varied activities and services,
VITA fosters
self-sufficiency by promoting increased economic
productivity. Supported by a volunteer
roster
of over 5,000 experts in a wide variety of fields, VITA is
able to provide high quality technical
information to requesters.
This information is increasingly conveyed through low-cost advanced
communication technologies, including terrestrial packet
radio and low-earth-orbiting satellite.
VITA also implements both long- and short-term projects to
promote enterprise development and
transfer technology.
PAINT MANUFACTURING
=================================================================
Prepared By: Philip
Heiberger
Reviewed By: Patrick
Raney
==================================================================
DESCRIPTION
The Product
Paint is a fluid suspension of finely ground pigments in a
resinous
liquid known as the "vehicle."
When applied to a surface
as a thin liquid film, it changes to a solid.
Paint is used in
all countries to decorate and protect surfaces.
The many kinds of paint may be classified according to use:
trade-sales paints are used to paint houses; commercial or
maintenance
paints are used for painting buildings and ships; and
industrial paints are used on machinery, manufactured goods,
and
motor vehicles.
The Facility
This Profile describes a small plant that will serve local
needs,
mainly in the trade-sales sector.
Its output may exceed 4,000
liters per week (L/wk).
For economic reasons, at least part of
its total output may have been imported in bulk, and then
tested,
modified, and repackaged for the local market.
Paint is made in batches because the huge variety of uses
and
variation in raw materials require adjustments of its
properties.
The kind of plant varies somewhat according to the kinds and
amounts of paint to be made and whether the process starts
with
raw or partially processed materials.
GENERAL EVALUATION
Many people work in some aspect of the paint business; for
example,
distribution, application, or marketing.
Some of them may
recognize that the time is ripe for starting local paint
manufacture.
Operating a paint factory does not need large capital
investment, but is technically complex and must take into
account
the special needs of the local market.
Moreover, success requires
careful planning and deliberate growth.
A new business should
acquire the services of an experienced consultant.
Outlook
The world's paint industry operates at an annual level of
US$20,000 million (estimated 1989 costs) with an annual,
real
increase of three percent.
Rates of use depend on a country's
geography, industrial development, and the income structure
of
the population.
Lacking specific information on these factors, a
rough estimate of annual trade-sales use is 400,000 L per
million
population. Of the
total market, trade-sales paints make up about
40 percent, maintenance paints 20 percent, and industrial
paints
40 percent.
Local manufacture should be considered when the costs of
importing
the finished product become too high.
Government policy may
encourage local manufacture.
To help decide the best time to
start in a country where labor costs are relatively low,
estimate
that half of the cost of imported materials is due to high
labor
costs in the industrial countries.
At the start, a business plan should be jointly prepared by
the
local entrepreneurs, appropriate government authorities, and
the
consultant. It
includes levels of production, a developmental
time table, and concurrent development of technical
expertise and
market knowledge.
The standards for finished paint usually are established by
the
customers. They
relate to color, viscosity, composition and
percent of solids, gloss, and so on.
Tolerances to product variation
are relatively broad in trade-sales products:
an off-color
white house paint may be acceptable.
But industrial tolerances
are narrower: a
slightly off-color automobile paint will be
unacceptable.
Regardless of plant size, each paint must be tested and
warranted
by the manufacturer to meet the specifications established
by the
supplier and the customer.
Raw materials are never uniform, the
process of dispersing the pigments in the vehicle is often
unreliable
and color matching is erratic.
For such reasons every
batch of paint, whether imported or locally manufactured,
needs
to be tested and approved, or modified to meet established
standards.
Inadequate or inefficient quality control can lead to
business failure.
Manufacturing Equipment Flexibility
Tanks, mixers, dispersion mills and pumps exist in large
variety.
The usual justifications for dedicated, expensive equipment
are to reduce labor costs and to meet production levels,
factors
that are of relatively low importance in many countries.
Each company should buy the most readily and economically
available
equipment and then operate it as skillfully as
possible. In
making decisions on equipment flexibility, the technical
manager
takes into account the properties of construction materials
as
well as fire and safety hazards.
Knowledge Base
Three kinds of experts are usually needed to start a paint
factory.
The entrepreneur, who must be identified first, has access
to capital, knows the business environment, is influential
in
government circles, and is enthusiastically committed.
The sales
manager must capably manage cost accounting, marketing, and
distribution. The
technical manager, who should be an experienced,
technically-trained engineer or chemist, manages the
purchasing, as well as laboratory and manufacturing
operations.
Purchasing is a technical function because substitutions are
frequently made, and delivery and manufacturing schedules
require
coordination.
Quality Control
Every factory requires a laboratory to test both incoming
raw
materials and outgoing finished products.
It must be staffed by
persons who can use testing equipment (e.g., viscometers,
balances,
colorimeters, calculators) and application facilities
(spray guns, spray booths, dip tanks, brushes) and interpret
the
results. This phase of
the business cannot be ignored or neglected.
Constraints and Limitations
Promised delivery dates of materials are frequently
unmet. Materials
that are received may be off specifications, with
replacement
both costly and time consuming.
To help avoid these disappointments,
the supplier, the paint maker, and the customer
must work together.
Substitutions can sometimes be agreed upon if
the company can develop an alternative product or method of
application by understanding the science behind the technology.
MARKET ASPECTS
Users
Paint is a luxury item that has critical users with
requirements
that differ from place to place.
In countries where labor costs
are high, trade-sales products must have the properties of
easy
brushing, high hiding, and extreme durability.
Elsewhere, color
and appearance are the main criteria.
It would be too costly to
duplicate the first-named properties where labor cost is not
a
critical factor. In
addition, paints must be formulated for local
conditions: climate,
color preferences, materials and labor
availability.
Maintenance and marine finishes must meet international
standards.
A few multinational firms distribute them throughout the
world. Industrial
finishes are designed for specific end uses.
The users have modern application equipment and painting is
an
integral part of the manufacturing process.
Most industrial
finishes are imported, but a local paint company that has
acquired
market and technical experience can consider making
industrial
finishes to given specifications.
Suppliers
Raw materials are rarely manufactured in nonindustrial
countries
because the manufacture of pigments, solvents, and resins
requires
complex, capital-intensive operations.
Thus, it is most
often the large, multinational chemical producers that sell
these
materials to paint manufacturers.
Some intermediates (vegetable
oils, varnishes, alkyds, polyvinylacetate (PVA) emulsions)
can be
made in smaller plants.
Additives are used in small amounts, but
they are proprietary and are bought from the manufacturers.
Raw-material suppliers are an important source of
information.
They provide formulas and technical assistance on the use of
their products. Even
so, products claimed to be "easy to use"
(e.g., PVA emulsions) can be misused.
Multinational companies distribute their products widely and
have
agents in many countries.
It is always best to work with the
local agents.
Because packaging and transportation are major cost
factors, it is advisable to buy from companies located so
that
they can ship over short distances.
Sales Channels and Methods
Trade-sales paint outlets may be independent merchants or
company-controlled
shops. Sales
channels thus must be selected with
adequate market knowledge.
New products can be promoted through
radio, TV, newspaper advertisements, special offers, or
locally
appropriate means.
Painting contractors should be directly approached.
It is necessary to be part of the local business network
to get the best results.
Maintenance-paint sales usually begin with social
contacts. When
accord has been reached, the technical people of both the
supplier
and the customer together sort out details and initiate a
development and testing program.
The paint company may need to
import or license the product until a volume or skill level
is
reached to justify local manufacture.
In the industrial market, one deals directly with key
executives
of the manufacturing facility.
Informal contacts often help key
persons of the country or region to gain confidence in the
entrepreneurs'
manufacturing efforts, thus increasing sales.
Geographic Extent of Market
Sales may be limited to one country, a region or a large
city
that is both a population and an industrial center.
If there is
more than one city, each may require different marketing
approaches.
For example, paints for coastal areas differ from
paints used at high altitudes.
Satellite plants or local warehouses
may be advisable, depending on labor conditions.
Competition
Imported trade-sales paints or locally repackaged, imported,
bulk
paints may compete with locally manufactured products.
Multinational
firms may establish local subsidiaries, offering them a
guaranteed source of raw materials and competent technical
backup.
Their strengths are uniformity and reliability, but not
versatility. Local
entrepreneurs have the advantages of local
contacts, lower labor costs, and a more intimate
understanding of
local needs. It is
in the trade-sales area that local manufacturers
have the best chance to meet foreign competition.
Market Capacity
In many countries only a few people can afford paintable
homes
and purchase manufactured goods.
However, because nearly all
governments seek to improve general living standards, paint
manufacture is a potential growth industry.
As an example, the
factory's business plan may assume (from the best available
data)
that two percent of the population are paint consumers and
that
in five years another two percent will become users; thus
usage
will double in five years.
PRODUCTION AND PLANT REQUIREMENTS
___________________________________________________________________
Infrastructure, Utilities
Land (large
tract to allow for growth)
Buildings
(office, warehouse, laboratory, etc.)
Access to
transportation
Water
Power (should
allow for tenfold expansion)
--------------------------------------------------------------------
Major Equipment and Machinery
Tools &
machinery
steel tanks or
drums (200-L)
1 mixing tank
(400-L)
1 mixing tank (1,200-L)
portable mixers
(several)
1 large paddle
mixer
1 pebble mill
(about 1,200-L capacity)
1 sand mill
(about 120-L/h capacity)
1 small 3-roll
mill
several pumps
filter press or
centrifugal filter
lift trucks
stand-by
electric generator
storage tanks
and filling line
scales of
different sizes
Support
equipment and parts
first-aid
supplies
fire-fighting
equipment
protective
clothing
Cost Summary
Plant
equipment . . . . . . . . . . $30,000
Shop
equipment . . . . . . . . . .
10,000
Fire and
safety equipment . . . . . 5,000
Laboratory
supplies . . . . . . . . 10,000
. . . plus
land, buildings, office furniture and
supplies,
miscellaneous. Cost not determinable.
---------------------------------------------------------
These costs are conservative guidelines expressed in 1989 US
dollars. More
precise estimates require knowledge of local availability
and market variables.
Local government may assist by
providing free land, temporary tax relief, venture capital,
etc.
Licensors may provide technical assistance and international
agencies may provide financial assistance.
Assistance from all
sources should be considered in the business plan.
Materials and Supplies
Raw Materials
(selected according to kind of paint):
pigments
solvents
resins
vegetable oils
varnishes
alkyds
polyvinylacetate
(PVA) emulsions
additives
Containers.
If they are not locally available, estimate
$10,000 to
$50,000 for a six-month supply.
----------------------------------------------------------------
Labor
Skilled:
dispersion
foremen
color shaders
warehouse
supervisor,
chief
quality-control tester
paint
manufacturing foremen
filling-line
foremen
chief mechanic
chief
electrician
librarian
(maintain technical records and organize literature
files)
fire chief
first-aid
technician
Semi-skilled:
dispersion
operators
assistant shift
foremen
cook (if a
kitchen is required)
Unskilled:
mixers
fillers
warehousemen
cleaning staff
loaders
housekeepers
kitchen helpers (if required)
PROCESS DESCRIPTION
For both large and small plants the main steps in paint
manufacture
are as follows:
<FIGURE>
05p08z.gif (600x600)
Mixing and dispersion.
Pigments are usually added to the vehicle by blending the
ingredients
in a paste mixer.
The paste that is formed consists of
poorly mixed aggregates of pigment and vehicle; this paste
is
brought to a specified fineness and uniformity by using an
appropriate
mill.
"Grinding" or shearing wets the individual pigment
particles with the liquid vehicle and further reduces the
size of the pigment aggregates.
For emulsion paints, such as the
PVA's, the pigments must be dispersed separately in a
mixture of
surface-active agents and hydrophilic gums.
Thinning down and adjusting.
The paste is usually further blended with vehicle, driers,
fungicides,
and other additives.
It is then tinted with colored
dispersions to match a desired color standard.
Testing.
The paint is tested against standards for color, application
properties, and other features.
It is then adjusted to meet
agreed specifications and released for marketing.
Filtration and packaging.
Filtration is often performed at the time of packaging to
remove
lumps from the product.
Shipping.
REFERENCES
Technical Manuals
The most important and useful references are the
publications of
the raw-materials suppliers.
Periodicals
Unfortunately, no journals or texts specifically serve the
needs
of developing countries.
However, a technically trained and
experienced person can use the libraries and information
centers
available in many embassies and trade missions, and in local
universities and technical centers.
Trade Associations
Industrial countries usually have specific technical and
trade
associations designed to assist local businesses.
To gain access
to these sources, consult the Economic Advisor attached to
the
embassy or trade mission of the country of interest.
One example
of such an association is Paint Research Associates (PRA),
Waldegrave
Road, Teddington, Middlesex TW11 B6D, United Kingdom.
This
organization provides information services in English for a
fee.
Equipment Suppliers
For turnkey operations or for new equipment, there are many
excellent companies.
Many of these have local agents whom should
be interviewed.
However, it is more usual for a starting company
to purchase used or locally fabricated equipment.
It is assumed
that the entrepreneur of the new company knows of these
resources.
If not, he may wish to seek a cooperative venture with
an experienced partner in an industrial country.
For further
guidance on this matter, consult the Economic Attache of a
favored trading country.
Consultants
Because the paint business is technical, every step must be
constantly monitored by well trained technicians.
Thus, it is
imperative that the entrepreneur have constant access to an
experienced, technically trained person, who should be the
technical
director. Even with
such expertise, the entrepreneur should
have the backup of an experienced consultant.
VITA Resources
VITA has a number of documents on file dealing with
industrial
processes.
VITA Venture Services
VITA Venture Services, a subsidiary of VITA, provides
commercial
services for industrial development.
This fee-for-service includes
the following:
technology and financial information,
technical assistance, marketing, and joint ventures.
For information,
contact VITA.
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