leader in Zimbabwe, has a sound management and history of success, the buyout is a worth investment risk and will
benefit from expertise and technology
from its South Africa’s operations.
“The timing may be subject to controversy but we don’t want to wait at
the risk of the company partnering with
someone else,” said Malik.
The entry into the Zimbabwe market tightens further the grip Kansai
holds in the Southern Africa market
with a major presence in Namibia,
Zambia and Malawi.
Despite the apprehension with which
its entry into South Africa was received
in 2011, Kansai Paint, now trading as
Kansai Plascon in the country, is sending
a precedent of sorts in the region’s coatings industry.
“Not only are we setting a precedent
in the coatings industry, but we are also
setting the precedent in the South Africa
economic environment,” said Malik pre-
viously terming the Kansai Paint and
Freeworld acquisition story “a hostile
takeover and a happy ending.”
Kansai Paint president and represen-
tative director Hiroshi Ishino said the
company’s South Africa subsidiary, con-
tributed greatly to the consolidated oper-
ating income of $257 million and the 189
million net income for the financial year
ending March 2013.
“The revenue of the Kansai Paint
Group increased due to the additional
contribution of our South Africa subsidiary, which was consolidated during the
previous fiscal term,” said Ishino.
The Zimbabwe buyout is part of
Kansai’s accelerated globalization and
which Ishino said “focuses on developing
nations where the prospects for growth
are most positive.”
“Our overseas business will look to
strengthen competitiveness by optimiz-
ing costs and product quality to meet the
needs of the market,” he said.
“We will also increase the pace in
which we enter and develop businesses in
new territories and fields as well as areas
that can make a significant contribution to
our consolidated business performance.”
And in line with its strategic accel-
erated global expansion, Kansai Paint
has hinted at a planned acquisition of a
Kenyan coatings firm as it eyes the grow-
ing Eastern Africa market.
Hiroshi Ishino, who was in Nairobi
recently, told reporters: “Kenya is a
crucial part of our business agenda in
the region. We are open to all avenues
to enter the market, but we are also
ready for a buyout.”
Although he did not confirm the
Nairobi coatings company that Kansai
Paint is eyeing, focus has now shifted to
leading paint makers of Crown Paints,
Basco Paints and Sadolin Paints.
The Nairobi-based paint manufac-
turers fit Ishino’s description of the
kind of company that would want to
acquire stake. He was quoted saying
Kansai ruled out beginning operations
in Eastern Africa from scratch involv-
ing processes such as “buying land, put-
ting up buildings, hiring local staff and
fighting for market share against the
established rivals.”
Kansai hopes to bank on the property
boom currently enjoyed in East Africa
and specifically in Kenya to achieve its
growth targets after sealing a buyout deal
in the region.
Analysts say growth in real estate sec-
tor opens opportunities for paint makers
and cement makers in the region to grow
their bottom lines.
“The number of multinationals and
NGOs that have either set up their op-
erations or plan to relocate there, in ad-
dition to fast-growing domestic Kenyan
businesses, have ensured that Nairobi
continues to attract investments into the
commercial office sector,” says Michael
Turner, managing director, Actis East
Africa, a private equity firm investing ex-
clusively in Africa.
“In East Africa and in Kenya specif-
ically, the property market is respond-
ing to demand that has been created
by the expanding middle class with
disposable income and able to service
their mortgages”
Kansai’s appetite for the East Africa
coatings market comes at a time when
leading paint manufacturer in the re-
gion, Crown Paints Kenya Limited has
announced a new partnership with
the world’s largest manufacturer of
decorative plaster, Armourcoat.
Crown Paints CEO Rakesh Rao said
the company is keen on growing its pre-
mium segment and will introduce a new
product, Crown Armourcoat, in the lo-
cal market.
“We are seeing in the market an in-
creasing shift to high-end finishes to
lend a superior feel to interior living
spaces. Consumers especially in the
middle and upper income segments are
also looking beyond traditional coating
solutions like paint to achieve a strong
aesthetic appeal in their homes and of-
fices,” said Rao
Armourcoat launched in Kenya in
mid-October and appointed Crown
Paints Kenya it agent for Kenya,
Uganda, Tanzania, Mozambique,
Rwanda and Burundi.
Armourcoat creative director Duncan
MacKellar sealed the deal with Crown
Paints’s Rao and held several meetings
with the application and sales teams to
map out a winning formula for the new
product.
The acquisitions and partnerships
in Africa coatings market in 2013 were
pioneered by Netherlands-based chemi-
cal firm IMCD Group BV’s acquisition
of 100 percent interest in South Africa’s
Chemical Distributor Chemimpo South
Africa (Pty) Ltd.
IMCD Group BV describes itself as
one of the world’s “leading company in
sales, marketing and distribution of spe-
cialty chemicals and food ingredients”
with a footing in Europe, Asia-Pacific
and Africa.
“Integration of the two companies
in South Africa will take place through
the course of 2013 and will establish
IMCD South Africa as the leading spe-
cialty chemical company in Sub-Saharan
Africa,” said Piet van der Slikke, CEO of
Rotterdam-based IMCD.
Otto Brinkmann, who is manager
of the Johannesburg based-Chemimpo
South Africa (Pty) Ltd. and will spearhead the combined operations, said
the company management hopes the
“change as it significantly increases
our customer base, laboratory presence
and sales personnel, delivering exhaustive market penetration.” CW
