Kansai Paint strategy for Africa
Stirs Region’s Major Markets
by Shem Oirere
Africa Correspondent
Aplot developed by global Osaka- based paint maker Kansai Paint in 2010, to diversify geographically and also in terms of its products
so as to mitigate the risk of too much
dependence on the Asia market and the
automobile sector, is slowly turning out
to be a catalyst fuelling the expansion of
Africa’s coatings industry.
Two years after what Kansai said was
“a happy ending to a hostile takeover” involving the acquisition of South Africa’s
Freeworld Coatings, the Japanese coatings giant has made yet another huge
leap by acquiring a 63.25 percent interest in Zimbabwe’s coatings market leader
Astra Industries. The Japanese coatings
firm partnered with the management and
staff of Astra, which also has substantial interest in the chemicals market, to
buy the stake from the Finance Trust of
Zimbabwe, an investment arm of Reserve
Bank of Zimbabwe.
“Part of our strategy was to use
Kansai Plascon in South Africa as our
platform growth into the rest of the
African continent and we are happy to
say that the acquisition of Astra is the first
step in making this a reality and demonstrate our commitment that we made at
that time,” said Nauman Malik, Kansai
Plascon CEO. Kansai Plascon is the company formerly known as Plascon South
Africa and was renamed after its merger
with Japanese company Kansai Paint.
Malik said Kansai, which announced
net sales of $3,127 million for the finan-
cial year ending March 2013 – an equiva-
lent of 14. 6 percent year-on-year increase
– has “confidence in the in the economy
of Zimbabwe and Africa in general and
believe Astra Industries is the right com-
pany to partner with.”
Kansai seems to have taken the ad-
verse publicity on the performance of
Zimbabwe’s economy on its stride and
also appear to have ignored queries on
why the Reserve Bank of Zimbabwe has
been disposing of even some of its well
performing assets.
The African Development Bank said
Zimbabwe’s economic growth deceler-
ated from 10. 6 percent in 2011 to 4. 4
percent in 2012, “reflecting a fragile
recovery owing largely to inherent po-
litical and economic uncertainties, a
high debt overhang and the deteriorat-
ing infrastructure.”
“Key challenging factors to doing
business includes policy instability, lack
of funding, corruption, excessive or poor-
ly functioning government bureaucracy
and inadequate infrastructure.”
However, the bank said in the
country’s economic outlook for 2013
Zimbabwe’s real gross domestic product
(GDP) growth “is projected to improve
marginally to five percent in 2013. The
projected improvement in 2013 will be
underpinned by improvements in mining
and agriculture.”
“The economy continues to experi-
ence structural challenges emanating
from the limited sources and high cost of
capital; uncertainties arising from policy
inconsistencies, especially with respect to
economic empowerment and indigeniza-
tion regulations; dilapidated infrastruc-
ture and obsolete technologies.”
Despite these challenges, Kansai said
the fact that Astra Industries is a market
