Interview: “No local competitor for bio-based paints in India
How has the war in Ukraine affected your activities in Russia?
Ingo Reincke: We are completely affected by the sanctions against Russia. For us, this means that our activities in the Russian market have been set to zero. From one day to the next, 15% of our sales have been lost.
We had a very strong partner with whom we had worked very trustfully for over ten years. For us, this 15% loss is very annoying, but for the partner it is their existence. He had worked exclusively with us and built up a very successful network. We were represented in every major Russian city. For our partner and his dealer network it is a much bigger disaster than for us.
Have you found a way to compensate for the lost business?
Reincke: The consequence for our partner was that he set up the same business with us in India. He left Russia and moved to India. He already had business there with an agent for building materials. Together we expanded our product range to include natural paints and oils.
So, we started to supply our products to India. From our point of view, it is a highly interesting market, because in India people still work a lot with wood and with stone tiles that are oiled. In Mumbai, for example, we were able to oil a forecourt of over 5,000 square meters and this project has led to further customer inquiries. The Indian market is huge and next year we will have at least compensated for the loss of our Russian business.
In addition to India, however, you have also become active in Japan and South Korea. How did this come about?
Reincke: Parallel to our entry into India, we decided that if we were already more involved in Asia, we should also open up other markets. In the past, we had inquiries from South Korea and Japan, but were unable to address them due to a lack of capacity. However, now that the business with Russia has been discontinued, capacities have become available which we can use for activities in these countries. In South Korea, we have revived the temple paint business. This is working extremely well. In Japan, the wall paint business is strong, particularly with silicate paints.
In Japan and South Korea, natural paints are already established. How do you assess these markets for your activities?
Reincke: In Japan, we were previously unable to handle the business in terms of personnel for capacity reasons. However, this has been made possible by the loss of the Russian business. Our approach is to provide a market with training and technical support in terms of personnel as well. We also always look for domestic partners. Without local partners, success was and will be difficult in my view. I am very positive about Japan in the coming year. We have already been to South Korea, but have never been able to provide proper support and develop the market.
The situation in Russia has forced us to develop the new markets and revive the existing ones. The trick is to act quickly. We didn’t want to take crooked routes into Russia via third countries. But this is not in line with our philosophy. Should the situation change for the better and pacify, we would also resume business in Russia.
How do you assess the situation in India for natural colors, what potential do you see?
Reincke: We went to India and were told that our colors were too cheap. The expectation was that natural paints had to be high-priced. We are in a customer segment that explicitly chooses natural paints and is therefore also prepared to pay higher prices. These are prestige orders that customers want to use to set themselves apart. With conventional wall paints, which are offered by numerous competitors, the price certainly plays a stronger role and must be low. In India there are just also numerous people who have giant riches. Made-in-Germany” is also well received.
Ecological awareness in Indian society is on the rise. The Indian upper class wants to set itself apart with ecological, sustainable products.
With synthetic paints, competition is certainly much tougher and it then becomes very difficult to gain a foothold in the market. With natural paints, however, we have no local competitors in India.
To what extent do you want to expand your activities in Asia? Do you already have concrete ideas about this?
Reincke: We have a concrete idea of how we want to proceed in Asia. According to our plan, we will be on site every two months, in Japan, South Korea and India. Thailand and Taiwan are also interesting. But we’ll take it one country at a time. We are too small to implement everything at once, so we are doing everything step by step. We are focusing on the first three markets mentioned. These markets must first stabilize for us. We also have to see whether everything works as we have imagined. We won’t make the mistake of getting involved everywhere at once. We also took this route in Europe and it was successful.