‘We will eat shares of other companies’

Being amongst the fastest growing nations in the world in recent years, it is natural to assume that foreign companies would want in on Bangladesh.

So it was not a surprise that Japanese Kansai Paint shelled out $7 million or Tk 57.26 crore in 2018 for a 55 per cent stake of RAK Paints through its Indian subsidiary Kansai Nerolac Paints.

“To start in Bangladesh, we wanted to tie up with a good and compliant company, as Japanese people value transparency – and that’s why we chose RAK Paints,” Vishal N Mothreja, chief executive officer of Kansai Nerolac Paints Bangladesh, told The Daily Star in a recent interview.

Established in 2009, RAK Paints had been a prominent name in the decorative and industrial paints sector with a turnover of more than Tk 100 crore on June 30, 2017.

“The team up was a win-win situation for both sides,” he said, adding that being a Japanese company gives Kansai Paint better leverage as Bangladeshi people love Japanese brands due to their superior quality.

Kansai Nerolac Paints wasted no time in making a space for itself in Bangladeshi consumers’ heart: it clinched the contract to supply paint to the Dhaka metro rail project.

The paint industry is growing at around 10 per cent a year.

“We will eat shares of other companies. We are now spending on contractors, marketing, consumers, painters, architects.”

The growth of the local automotive industry has also attracted Kansai Nerolac to Bangladesh.

“The increased number of two-wheelers hitting the road every day is creating new business opportunities for us,” said Mothreja, adding that almost 70 per cent of the cars manufactured in India use Kansai Nerolac.

A 101-year-old company, Kansai Paint entered India by acquiring 75 per cent stakes in Nerolac in 1999. Today, it is the largest industrial paint and third largest decorative paint company of India, with five paint manufacturing facilities across the country.

Mothreja, who has a career of over 20 years in the paint industry, said Kansai Nerolac will bring technologies from Japan and become the only company in Bangladesh to manufacture the entire range of products with its own technology.

“I am particularly fond of the hardworking people of Bangladesh,” he said, adding that they can also serve the eastern parts of India from their Bangladesh operations.

Thus far, from its seven depots in the country Kansai Nerolac rolled out seven new types of decorative paints.

The company also plans to unveil a full range of protective coatings, coil coatings, powder coatings, marine coatings and construction chemicals.

Kansai Nerolac, which will also complete 100 years in operations this year, will grow manifold in Bangladesh, as the economy is growing consistently, he said.

“RAK Paints was a leader in industrial coatings. Our plan is to keep going,” said the Indian national, who was brought back from RAK’s Dubai office to take charge in Bangladesh.

India-based Berger Paints and Asian Paints are the main competitors of Kansai Nerolac in the Bangladesh market, which generates sales of more than Tk 3,700 crore a year.

The paint industry with 45 formal or structured and over 20 non-structured manufacturers is growing at about 10 per cent a year.

“We want to be the top company. We don’t want to stay in the middle. If we keep on investing, we can beat others. “We won’t stay silent as a paint maker.”

Kansai Nerolac is very strong in industrial segment, high-performance coatings, effluent treatment plants, power plants, agriculture firms and floor coatings.

The company is at par with the industry leaders. In some cases, it is better than them, he said.

But the segment is small compared to the decorative sector. “The decorative sector is our main target now,” Mothreja added.

Since acquiring RAK Paints, Kansai Nerolac Bangladesh is growing at 25 per cent a year and at present it has about 500 employees.

Kansai Nerolac has three other subsidiaries: it has 68pc stakes in KNP Japan Private Ltd in Nepal, 60pc stakes in Kansai Paints Lanka Private Ltd in Sri Lanka and 100pc stakes in Marpol Private Ltd in India.

In India’s Rs 50,000-crore paint market, net sales of Kansai Nerolac rose 8.9 per cent year-on-year to Rs 5,139 crore in the 2018-19 financial year.

Net sales of the parent company Kansai Paint, also a champion in automotive coatings, were up 6.33 per cent to 427,425 million yen in fiscal 2017-18.

Kansai has presence in as many as 80 countries.