Sigma Paints Saudi Arabia says its turnover rose in 2000, despite a difficult year for the construction industry in the Kingdom.

Jo Paffen, general manager of the Dammam-based paints manufacturer, says: 'The year was satisfactory, despite a deterioration in the prices of paints and coatings, and our profitability was in line with expectations.'

Sigma Paints Saudi Arabia, part of the SigmaKalon group, has an annual production capacity of 60,000 tonnes of paints and coatings produced at its two factories in Dammam - one in the First Industrial Estate (13,000 sq m) and the other in the Second Industrial Estate (15,000 sq m).

'Prices have been under pressure but we achieved an increase in turnover through increased production, enhanced product mix and by boosting our activity in the various markets of the region,' Paffen explains.

The year saw a number of organisational changes taking place within the group, which will have a direct bearing on its future in the region.

A strategic move made two years ago is set to bolster Sigma Paints' status in the region - while conferring on it the recognition of a linchpin within the SigmaKalon Group. Sigma Coatings merged with Kalon two years ago, creating the fifth largest paint manufacturing entity in the world, says Paffen. The SigmaKalon amalgamation itself is the result of an earlier merger between the parent companies of the two firms - Petrofina for Sigma Coatings and Total for Kalon. The group has a presence in 40 countries around the globe, with its worldwide market divided into six key areas - one of them being the Middle East.

Sigma Paints Saudi Arabia has recently been given the responsibility for the Middle East sector, thus enhancing its status within the group.

'This means that the management of Sigma Paints is also responsible for markets further afield, including Iran, Egypt and Syria,' Paffen points outs.

One of the first moves made by the company was to initiate close cooperation with the Abu Dhabi-based Multi-Coatings, which is also a part of the SigmaKalon group.

'As from September last year, Multi-Coatings started producing Sigma Paints' protective and marine coatings, while also marketing its decorative range in the UAE and Oman,' he elaborates. 'This tie-up gives us greater access to supply and service the local markets, while retaining control of our Sigma Paint brand.'

In further efforts to boost its presence in the regional markets, Sigma Paints has recently joined hands with a local partner in Qatar to set up a paint production facility there.

The company also opened a dedicated service centre in Kuwait late last year along with its sole distributor in that country, Building Systems Corporation.

'We have other plans for other areas of the Middle East,' he reveals.

While the Kingdom absorbs the lion's share of its output, Sigma Paints slated an export target of 35 per cent of production and looks set to achieve it. Currently, around 30 per cent of its output is exported, according to Paffen.

Sigma Paints exports regularly to Bahrain, Kuwait, the UAE, Oman, Qatar, Yemen, Iran, Libya, Lebanon, Syria and the Maldives.

''We expect our close cooperation with Multi-Coatings to bear fruit in the UAE market, through increased sales,'' he adds

Decorative paints account for the bulk of Sigma Paints' production and they are marketed mainly via the firm's extensive retail network of 65 distributors in Saudi Arabia.

'We consider these retailers our partners, who are part of a chain linking us to the end-users to our products,'Paffen points out.

Apart from the retailers, Sigma Paints sells directly to contractors, industries and maintenance firms.

Over the past year, Sigma Paints has increased its focus on interior finishes, concentrating on high-quality, high-value paints for specific areas in various types of buildings.

''Sigmulto Pharos, which we introduced late last year, is among the forerunners in a series of high-end-of-the-market products that we are introducing on the market - we intend to launch two more products, which offer special multicolour finishes, over the course of this year,'' he indicates.

Pharos, which offers a special marble effect on interiors, is available in 14 colours.

Turning to protective coatings, he says: ''We are concentrating on environment-friendly coatings and have developed solvent-free as well as low-solvent systems, some of which are available as one-coat systems, saving time in application, reducing downtime in maintenance of installations, while offering a product which has a longer expected life-span.''

''We also custom-make systems on the request of major clients,'' he adds.

Paffen expresses deep concern about the poor quality of some of the paint offered on the market..

Sigma Paints gives top priority to quality, he emphasises.

''There are numerous paint manufacturers in the Kingdom - licensed and unlicensed ones. The licensed firms, which have ties with international companies, are respectable and offer quality paints. However, there are too many unlicensed paint producers who only offer coloured water or pigmented resin - not paint!'' he asserts. ''They do not serve the customer and ultimately damage their own market.

''The only argument in their favour is price - and for the sake of price, they produce substandard products.''

He continues: ''Unfortunately, there are many customers who only look at price and after only a short period of time, they discover that they haven't got value for money. These customers are only looking at today - with scant regard for the future.

''Paint is not only decorative - it protects the property and the investment that goes into it.

''The government should closely monitor what is happening in the market and can help by strictly enforcing the Saso (Saudi Arabian Standards Organisation) regulations which are partially in place.''

Another way to improve the state of the industry is through education and training of applicators, he says.

Sigma Paints has an approved applicator programme in place throughout Saudi Arabia, through which it trains applicators in the use of its paints and certifies them when they meet the required standards. The firm then recommends clients to use the services of these applicators.

Sigma Paints is now looking at establishing a similar programme in the UAE, where it has its own office in Dubai and services of the Multi-Coatings factory in Abu Dhabi.

Another problem encountered by the paint industry is the menace of counterfeit paints - where small operators are refilling empty paint drums of reputed paint manufacturers with inferior paint and pushing them back into the market.

Sigma Paints introduced plastic tamper-proof packaging last year, and that has helped reduce the threat, Paffen says.

In a bid to keep abreast with technology in the IT field, Sigma Paints has relaunched a new interactive website, which enables greater contact with its customers. Launched just over a month ago, the initial feedback to the site has been positive, says Paffen.

Its SigmaStar, a software developed to assist professionals in the selection of paint systems, has achieved major success in the market - encouraging the company to develop its New SigmaStar, which should be on the market by mid-year, he says.

Its Colour Wizard software too is being upgraded to increase its customer-friendliness and offer better reproduction of colours, Paffen adds.

To increase its competitiveness in the region, the company is looking at strengthening its protective coatings sector through innovative systems and enhanced services.

Meanwhile efforts continue to boost production efficiency at its factories.

''For instance, we are currently shifting our water-based production line from the old factory to the new one to streamline these operations all under one roof,'' he says.

Finally, on customer-awareness, Paffen says that Sigma Paints has recently launched a new TV advertising campaign targeting the consumer market.

'We are currently monitoring how successful the campaign has been in increasing awareness,' he says.

Sigma Paints was established in 1980 and employs a staff of 250. The company has branches and agents all around the Middle East. The firm has been involved with some of the prestigious projects in the Kingdom. Its decorative systems have been supplied to several developments including Gasco headquarters, Ethiopian Embassy, Al Umam Commercial Centre, Dar Al Arab Medical Clinic, all in Riyadh; the Equestrian Club in Janadriah; Abdullah Shubaiki villa, Al Basateen Residential Compound and King Abdul Aziz Hospital, all in Jeddah; Hilton Hotel, Madinah; Oasis Residential Compound and Saad Medical Centre, both in Al Khobar; Eastern Province Chamber of Commerce, Dar Al Youm Headquarters and Gulf Central Hospital, all in Dammam; and boys and girls schools kingdomwide.

Its protective coatings have been supplied to Petrokemya's Olefins III expansion for the pipe rack equipment support, to National Pipe Company's for the steelwork involved in the expansion, Saline Water Conversion Corporation's (SWCC) water transmission 56" pipeline pump stations and to Royal Commission for Jubail & Yanbu for 29 potable water storage tanks.

In the UAE, its projects include the Emirates Towers, Al Maha Desert Resort, Deira City Centre, Sharjah Shopping Mall and Al Moosa Tower; in Kuwait, they include the Al-Tujariya Complex, Al Sharar Commercial Complex, Salmiya Palace and Hawally slaughterhouse; in Bahrain, Elite Hotel, Al-Saffa Girls School, Al-Saraya Housing Project and the Saudi Arabian Embassy; and in Qatar, Qatar Islamic Bank headquarters, Souk Haraj commercial development, Al-Jazi villas and GIS barracks building.