Kansai Paint Expands in Middle East

By Tim Wright | November 1, 2010

As part of its expansion plans in the Middle East region, Japan’s leading coatings manufacturer recently inaugurated a new plant in Iran.

Kansai Paint, Japan's leading paint manufacturer, with operations in more than 40 countries spanning the globe from Asia to Europe and North America, recently expanded its operations in the Middle East, Central Asian and North African regions as well as India and China.  
Formed in 1918, Kansai Paint has since grown to become the 7th largest paint manufacturer in the world and with the establishment of Kansai Paint Middle East (KPME) in Dubai, UAE, as its window company for the Middle East, Central Asian and North African regions including Iran and Pakistan, Kansai is poised to serve these markets with its cutting edge technology.
KPME through its wholly owned subsidiaries has been manufacturing and selling a complete range of products in Pakistan since 2009 while its Iran plant was inaugurated on July 11, 2010 by Mr. Shoju Kobayashi, chairman of Kansai Paint.
According to Mr. Kobayashi, Kansai Paint is a technology driven company as opposed to being brand driven. As such it operates one of the largest research and development centers for paint and coating solutions in the world. The firm is focused on developing leading technology in coatings, spending more than $50 million annually on research and development alone.
With more than $2.7 billion annual sales and an asset base of approximately $2.6 billion, Kansai Paint operates three state-of-the-art automotive paint plants from its headquarters in Osaka, Japan and is the leading supplier of automotive coatings to Toyota, Suzuki, Nissan, Honda, Peugeot and Renault worldwide.
Coatings World had the chance to discuss Kansai’s recent investments in the Middle East region, as well as the firm’s broader strategy, with the chairman, Mr. Kobayashi.

What coatings markets will the new plant in Iran serve and what is the strategy behind this capital investment?

The manufacturing plant in Iran will serve the automotive and industrial coatings markets within Iran and some countries in Central Asia. As far as the reasons for this investment are concerned, Kansai has been supplying paint to automotive customers in Iran—alongside Dupont, PPG, BASF, Henkel and other global players—since 2005. Kansai’s supply to the region operated under an import model. However, this model continued to become more and more impractical due to increases in demand and overall volumes. Therefore Kansai established a production base to serve the Iran market more efficiently.

What is the initial production capacity?

The current capacity on a single shift basis is 18,000 tons.

According to Kansai’s estimates, what is the current size of the Middel East coatings market?

Though estimates vary, based on publicly available information, the size of the market is currently in excess of $3 billion.

What is Kansai’s market share in the region and what are your growth projections for the future?

Kansai is a new entrant, having established its window company, Kansai Paint Middle East, in early 2008. Therefore our share is quite modest at this stage. However, given the strength of the Kansai product portfolio, the company expects to achieve a double-digit share of the market within the next ten years.  

What are Kansai’s goals for the new plant and in the Middle East region as a whole?

Kansai has set-up two new plants since the establishment of Kansai Paint Middle East and intends to construct an additional seven plants over the course of the next few years. The number plants, their size and scope will of course depend on the emerging opportunities and Kansai’s ability to penetrate each market and build scale.     

How would you characterize the Middle East paint and coatings industry and how does it differ from other regions?

The Middle East, Africa and Central Asia region is in a sense an emerging market as opposed to the mature markets of Japan, Asean, Europe  and North America. Moving a step ahead of the vertical integration of the oil and gas industries and the petrochemical sector, which has direct synergies with the natural resource availability in the region, many economies are building infrastructure for new industries such as light manufacturing, tourism, financial services and sophisticated global trading hubs. The economic boom, and subsequent changes happening in the market have led to the growth of various infrastructure and industrial segments, which in turn has driven growth of the paint and coatings sector in these countries.

How would you characterize the state of the coatings industry as a whole?

The global coatings industry has been consolidating through mergers and acquisitions over the last five years. Moreover, there is an increased requirement for developing not only environmentally friendly products but coatings for new emerging applications, leading to the need for fairly significant investments in research and development. Secondly, volume has become important in securing raw materials at globally competitive prices. Thus, scale is becoming essential for long term sustainability. Until 2006, no global company enjoyed a market share exceeding seven percent; with the acquisition of ICI by AkzoNobel and of Sigma by PPG the measure has changed.

Is Kansai’s business rebounding after the recession?

Kansai was able to come out of the economic crisis fairly quickly since its mainstay in term of segments was automotive, which was able to garner significant government support. Moreover, in terms of geography, China and India were Kansai’s main markets outside Japan and these did not suffer for too long; these markets are booming across all segments.   

What can we expect moving through the next few quarters from Kansai Paint? Describe the firm’s strategy for navigating these turbulent times?

Kansai is maintaining its growth oriented mind-set in terms of its strategy and plan while being particularly cautious with respect to costs.

Where can we expect to see future investment?

The next few investments are expected to be in China, India, The Middle East and Africa. Kansai has already announced an approximately $100 million investment in India.
blog comments powered by Disqus
  • The Industrial Coatings Market

    The Industrial Coatings Market

    Kerry Pianoforte, Editor||June 8, 2016
    The market for industrial and protective coatings has potential for growth in a number of key markets.

  • The Industrial Coatings Market

    The Industrial Coatings Market

    Kerry Pianoforte, Editor||June 17, 2015
    The market grew by an estimated three percent in 2014.

  • Automotive OEM Coatings Market

    Automotive OEM Coatings Market

    Catherine Diamond, Associate Editor||March 25, 2015
    Automotive and truck production is increasing, which is driving coatings use and growth rates.

  • Corrosion Control

    Corrosion Control

    Kerry Pianoforte, Editor ||February 24, 2015
    Corrosion control is especially important when dealing with high value substrates such as offshore oil rigs and other industrial structures meant to withstand harsh environments.

  • PPG Reports on the OEM Auto Market

    PPG Reports on the OEM Auto Market

    November 7, 2014
    Coatings World recently had the opportunity to interview Jean-Marie Greindl, Vice President, Automotive OEM Coatings, EMEA, and President, PPG EMEA.

  • Water Shortages in Africa Drive Up Demand For Water Storage Tanks and Coating Technology

    Water Shortages in Africa Drive Up Demand For Water Storage Tanks and Coating Technology

    Shem Oirere, Africa Correspondent||November 6, 2014
    Demand for water storage tanks in Africa has created a growing market for protective coatings.

  • Industrial Coatings

    Industrial Coatings

    Kerry Pianoforte, Associate Editor||June 5, 2012
    The industrial coatings market has yet to return to pre-recession levels of growth, but certain areas such as the oil and gas segments offer good opportunities.

  • The Resins Market

    The Resins Market

    Tim Wright, Editor||April 19, 2012
    Resins suppliers reported modest recovery in 2011 and are optimistic that these improvements will continue into 2012.

  • Auto OEM Coatings

    Auto OEM Coatings

    Tim Wright, Editor||March 19, 2012
    Lower costs, reduced air pollution and better performance are key drivers in automotive coatings and suppliers like BASF continue to offer new technologies and new products for the automotive industry.

  • Surfactants Update

    Surfactants Update

    Kerry Pianoforte, Associate Editor||March 19, 2012
    Surfactants manufacturers focus on environmental issues and developing “greener” technologies.

  • Pigments Market Update

    Pigments Market Update

    Kerry Pianoforte, Associate Editor||January 24, 2012
    Although still not back to pre-recession levels, the pigments market has continued to recover. Pigment companies are reporting a decrease in supply issues and an increase in demand for certain market segments, such as automotive coatings.

  • Growing Paint Additives Market

    Growing Paint Additives Market

    Tim Wright, Editor||January 24, 2012
    Environmental pressures and the growing shift toward water-based paint systems are fueling demand for paint and coating additives, providing tremendous growth potential for additives suppliers.

  • The Adhesives and Sealants Market

    The Adhesives and Sealants Market

    Kerry Pianoforte, Associate Editor||November 10, 2011
    The adhesives and sealants market continues to be affected by the recession and raw material issues.

  • White is Favorite Color for Automobiles

    White is Favorite Color for Automobiles

    November 10, 2011
    PPG introduced 70 new shades at annual Automotive Color Trend Show.

  • The Auto Refinish Market

    The Auto Refinish Market

    Kerry Pianoforte, Associate Editor||October 12, 2011
    The auto refinish market faces a slow down in demand in North America and Western Europe, but emerging markets offer growth opportunities.

  • White Roof Coatings Boost Solar Power

    White Roof Coatings Boost Solar Power

    Charles W. Thurston, Contributing Editor||September 14, 2011
    Most of the interest in white roofs comes from the heat reflection of the surface, which reduces energy consumption for cooling.

  • The Asia-Pacific Paint and Coatings Market

    The Asia-Pacific Paint and Coatings Market

    Scott Detiveaux, Allen Tsaur||August 15, 2011
    The Asia-Pacific region is an important and growing part of the global coatings marketplace. Unlike other regions of the world, the Asia-Pacific region has continued to grow, even in the face of the global recession.

  • In the Air With AkzoNobel Aerospace Coatings

    In the Air With AkzoNobel Aerospace Coatings

    A.S. Richardson||August 15, 2011
    Punching above its weight the aerospace coatings market is relatively small in terms of volume, but attracts a great deal of attention.

  • 2011 State of the Industry Review

    2011 State of the Industry Review

    July 13, 2011
    Executives reflect on the past year in coatings and look ahead to what the future might bring.

  • Resins Market Report

    Resins Market Report

    Kerry Pianoforte||April 4, 2011
    Although 2010 continued to present difficulties for suppliers to the coatings industry, there were some indications of recovery. Resins suppliers interviewed by Coatings World reported some positive news.

  • On the spot with RED SPOT

    On the spot with RED SPOT

    Tim Wright||March 10, 2011
    A conversation about the latest market and technology trends in automotive coatings with the folks at Red Spot Paint and Varnish Co., Inc. Contributors include Janice Gould, Marketing Manager, Jeff Scheu, VP of Product Development/R&D and David White, VP of Sales and Marketing.

  • Toward a Clean Energy Future

    Toward a Clean Energy Future

    Tim Wright||March 10, 2011
    Coatings World caught up with former DuPont head Chad Holliday and discussed issues ranging from corporate environmental responsibility, sustainability, climate change and the American Energy Innovation Council.

  • The Surfactants Market

    The Surfactants Market

    Kerry Pianoforte||March 10, 2011
    Coatings World recently spoke with a number of surfactant suppliers to the coatings industry regarding the state of the market. Among the topics discussed were raw material costs, “green” chemistry and opportunities for growth.

  • Focus on China: Guangdong Carpoly

    Focus on China: Guangdong Carpoly

    Tim Wright||March 10, 2011
    Among the world’s top 40 paint producers, Guangdong Carpoly has ambitious growth plans for the future.

  • Environmentally Efficient Down the Line

    Environmentally Efficient Down the Line

    Tim Wright||November 1, 2010
    De Dietrich Thermique uses Henkel’s modern nanotechnology for pre-treatment.