Japan’s Kansai Paint acquires Sadolin Group in Sh10bn deal

From left: Kansai Plascon EA president Gary Van Der Merwe, Sadolin MD Jamil Virjee and Kansai Plascon East Africa MD Wim Bramer in Nairobi on August 23, 2017.
From left: Kansai Plascon EA president Gary Van Der Merwe, Sadolin MD Jamil Virjee and Kansai Plascon East Africa MD Wim Bramer in Nairobi on August 23, 2017.
Japanese paint maker Kansai has bought a 90 per cent stake in Kenyan paint producer Sadolin Group in a transaction valued at Sh10 billion.

Kansai Paint said on Wednesday that its subsidiary, Kansai Plascon Africa Limited, has now taken over Sadolin operations in Kenya, Rwanda, Uganda and Tanzania.

“We have retained the current management, the leadership in business for a two-year period. We will work closely with the local leadership and after the two years, we’ll then decide whether to acquire the balance or the local shareholder will retain the 10 per cent in the Sadolin business,” said Gary Van Der Merwe, president-Kansai Plascon East Africa Ltd, during a media briefing in Nairobi.

The regional divisions of Sadolin pay royalties to Sadolin Group, which is owned by Akzo Nobel – a Dutch multinational, to use the brand name.

The license expires in February next year and it is probable that the businesses will assume the Kansai Plasco brand name.

Sadolin, according to Kansai Paints’ 2016 fiscal report, recorded sales of Sh8.8 billion in 2015, with an operating profit of Sh1.4 billion.

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The Japanese paint and coating manufacturer is hoping to tap into Sadolin’s market networks to expand its global footprint.

“East Africa is one of the fastest growing regions on the continent, with a rapidly emerging middle class, increased spending power and growing urbanisation.

“This is, therefore, a good time to launch into a market that is in need of our wide range of products to enhance their lifestyles,” said Gary van der Merwe, president of Kansai Plascon East Africa.

A decade long construction boom in Kenya has led to a rapid growth of the local paints industry.

According to global growth strategy analyst Frost & Sullivan, the burgeoning of housing developments, offices and shopping malls in various parts of the country has increased the need for high quality paints.