[Edaily Reporter Kim Se-yeon] As rising raw material prices and a strong won persist, the domestic paint industry is facing growing challenges. While cost burdens are increasing, the difficulty of raising product prices has also grown following the Fair Trade Commission’s investigation into price-fixing.

According to the small and medium-sized enterprise sector on the 14th, major domestic paint companies have recently been revising upward the exchange rate forecasts used in their internal business plans. This is because, while they had expected the won-dollar exchange rate to hover in the low to mid-1,400 won range when formulating their business plans late last year, the rate has recently remained well above that level. On the 5th, the won-dollar exchange rate surged to the 1,560 won range during overnight trading.
High exchange rates are a devastating blow to the paint industry. A very high proportion of paint raw materials consists of petroleum-based petrochemical products. Even if paint companies purchase raw materials through domestic suppliers, the high exchange rate is already factored in during the process of importing those materials from overseas. As the war in the Middle East broke out and international oil prices rose, the burden of raw material costs on the paint industry has grown even heavier.
For these reasons, the paint industry had already attempted a price hike but subsequently revised its plans. This was because the Fair Trade Commission (FTC) launched an investigation into price-fixing within the paint industry. Major paint companies, including #KCC, #NorooPaint, and #SPSamhwa (formerly Samhwa Paint Industry), announced plans in April to raise product prices, citing rising international oil prices due to heightened tensions in the Middle East, instability in raw material supply, and the high exchange rate. The announced price hikes ranged from 10% to as high as 40%. However, once the Fair Trade Commission took action, KCC withdrew its price hike plan, while Noru Paint and SP Samhwa scaled back their increases to around 10%. This effectively put the brakes on their plans to alleviate cost burdens through price increases.
The problem is that cost burdens have actually been growing since then. In particular, as the exchange rate has remained higher than initially expected, companies are revising the business plans they set at the beginning of the year. An industry insider, identified as Mr. A, stated, “Given the continued high exchange rate, it is unrealistic to calculate remaining 2026 sales and costs using the same exchange rate we projected at the end of last year.” He added, “While we do prepare revised budgets every quarter, it is not common practice to apply different exchange rates each time.”
Concerns about earnings are also growing. While major companies posted relatively solid results in the first quarter of this year, the industry does not view this as a sign of a recovery. Analysts attribute this largely to a base effect resulting from the significant deterioration in performance last year due to a slump in the construction sector and weak demand. The industry expects performance to deteriorate sharply starting in the second quarter, when the impact of rising raw material prices driven by the Middle East and the high exchange rate will be fully reflected.
However, there is considerable hesitation about raising prices again. This is because the Fair Trade Commission has recently stepped up its monitoring of price-fixing activities, and since companies withdrew their price hike plans or scaled back the magnitude of increases just last April, any further price hikes could draw negative scrutiny from both the market and government authorities.
Mr. B, an industry insider, stated, “The attempt to raise paint prices in April was driven by a combination of factors, including raw material supply issues caused by the war in the Middle East and the persistently high exchange rate.” He added, “Since we were unable to raise prices as much as necessary at that time, we may have to implement additional increases if the high exchange rate continues, but it is true that we are very conscious of the public reaction. Nothing has been finalized yet.”