Kansai Paint, a Japanese coating company, is looking at acquiring Uganda’s Sadolin Paints for $87.5 million (Shs313.68 billion) in a bid to expand its African footprint.
The Osaka-based company currently has a presence in 11 African countries, including South Africa where it operates as Kansai Plascon Africa Ltd after the 2011 acquisition of Plascon South Africa. Its intended purchase of Sadolin Paints will be carried out by Kansai Plascon, according to a report in the Nikkei Asian Review.
The acquisition, which is expected to be completed before June, will mark Kansai’s entry into East Africa – a market it’s been eyeing for some time. In 2013 Hiroshi Ishino, the company’s president, said they “are open to all avenues” to enter East Africa, including a buyout. This was reiterated by Kansai Plascon’s chief executive who said it was looking at “acquisitions, greenfield projects, joint ventures” in East and West Africa, the only African territories in which it doesn’t have a presence.
“They’re not only big markets in terms of consumer goods but of course with a lot of infrastructure development happening, the demand for coatings would substantially increase going into the future,” Nauman Malik told Africa Outlook Magazine. “We are looking into finding the right partners in both territories.”
Kansai’s market share in Africa’s construction-paint market is about 40%, according to Nikkei Asian Review. It aims to increase its Africa sales to 55 billion yen ($484.81 million) by 2018 through “aggressive investment” from the current 29.3 billion yen ($258.19 million). The company second quarter briefing for 2016 says it expects “business expansion bolstered by economic growth in Africa.”
Sadolin Paints Uganda is a subsidiary of AkzoNobel, a Dutch paints and coatings company. It was established in 1963, and currently has more than 50% of the local market share. AkzoNobel also has subsidiaries in Kenya, Tanzania and Rwanda, trading under the Sadolin brand name.
Chris Nugent, the Sadolin Uganda managing director, declined to comment when contacted by Uganda Business News.