Japan’s paint manufacturer, Kansai Plascon, has entered into the East African market through the acquisition of Sadolin Paints, Wim Bramer, the managing director of Kansai Plascon East Africa has announced.
Mr Bramer, said that the move to acquire Sadolin’s operations in Uganda, Kenya and Tanzania has been informed by a surge in the middle class and the projected growth in the construction sector.
The Kansai Plascon East Africa managing director did not disclose the amount of money paid for the new firm even as analysts predict millions of dollars.
“There are also many opportunities to exploit in Uganda and the region given that there are not many industries at the moment competing for business and yet there are positive growth prospects,” he said.
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He said the firm plans to introduce anti mosquito paint and one that is more washable and fire resistant.
He added that the firm also plans to invest in new technologies into the US$10 million-plant at the Kampala Industrial and Business Park, Namamve, enabling it produce high quality paint at an affordable price.
Currently, Sadolin, which claims to command 60% market share in Uganda, sells a 20-litre jerrycan of its silk paint at Shs251, 000 compared with Peacock Paint’s Shs 255,000 and Basco Paints Shs 237, 900. Global Paints sells the same volume of paint at Shs211, 500.
Latest data from Uganda Bureau of Statistics indicates that construction sector activities are estimated to have grown by 6.8% in 2015/16, which is a stronger growth by 4.9% compared to a growth of 1.9% achieved in 2014/15.
Kenya’s construction sector, which slowed down last year, growing at 9.2 % from 13.9% recorded in 2015 is projected to rebound this year, according to the Economic Survey 2017.
According to BMI Research, a company that analyses industry trends, shows that the local construction industry will grow by 8.7% this year and remain steady up until 2026 with an annual growth of 6.2% – which will see Kenya underperforming all Sub-Saharan countries driven by anticipated government spending on huge infrastructure projects.
On the other hand, forecasts indicate that the Tanzanian construction sector is set to grow by just under 7% this year and by 8% a year in the period up to 2025.
Chris Nugent, the managing director, Sadolin Paints Uganda Limited, told Journalists on Aug. 03 in Kampala that while the company’s products and services will remain the same, the entire rebranding process will be complete in six weeks’ time.
“The acquisition would also improve performance of the company especially with the use of new technology to meet growing customer demands,” he said.
He said the new acquisition is coming at a good time when Ugandan and African market need a wide range of their products to enhance lifestyles.
Started in 1959, Sadolin Paints has operations in the three East African countries, with a depot in Rwanda and distributors in South Sudan and Burundi.
On the other hand, Kansai Paint has operations in Japan, Asia, Middle East, and Africa, with most of its products used in the automobiles, construction and ships.