Kansai Paint may set up plants in Mideast, North Africa

Japanese company plans around 9 production plants over next 4 years.
JAPANESE COMPANY: Kansai currently sells paints, including automotive and decorative paints, in the Middle East imported from plants in Japan and Malaysia. (Getty Images)
By Bloomberg
Sat 17 Jul 2010 09:09 AM

Kansai Paint Co Ltd, Japan’s largest paint maker, may set up as many as nine manufacturing plants in the Middle East and North Africa over the next four years to tap regional growth after opening its first in Iran this week.

“We have to look at markets outside for growth” as the Japanese market is “shrinking,” Kansai Chairman Shoju Kobayashi said in an interview in Dubai on Friday.

Osaka-based Kansai is evaluating Morocco, Saudi Arabia, Algeria, Egypt and Syria as possible plant sites, with investments per unit of from $10 million to $100 million depending on the facilities installed, Kobayashi said. Kansai’s share of the Middle East and North Africa paint market as a recent entrant is still negligible and can increase because the Middle East is a large and growing market, he said.

Gulf Arab countries pump more than 20 percent of the world’s crude oil and have been spending tens of billions of dollars on infrastructure and industry to boost growth. Oil exporting economies of the Middle East and North Africa region will expand by an average 4.2 percent this year and by 4.6 percent in 2011, according to the International Monetary Fund.

Annual sales of paint in the Middle East, including Pakistan, Iran and North Africa, are about $3 billion and should grow about 5 percent to 6 percent a year, said Ameer Hamza Hassan, Kansai’s chief executive officer for the Middle East, Africa and Central Asia.

Kansai currently sells paints, including automotive and decorative paints, in the Middle East imported from plants in Japan and Malaysia and expects sales in the region of $30 million in 2010 and more than $100 million in three years, Hassan said.

Kansai on July 11 inaugurated an automotive-paint plant in Iran with an annual production capacity of 18,000 tons, Hassan said. (Bloomberg)

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Last Updated: Thu 26 Jan 2017 01:27 PM GST

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