Shem Oirere , Africa Correspondent08.01.22
Africa is one of the few continents in the world where economic recovery has been recorded, with some of the coatings and paints companies active in this market now looking forward to concluding their shareholder-approved expansion and performance strategies including completion of mergers and acquisitions that may have been put on hold as the COVID-19 crisis took center stage at the onset of 2020.
“In Africa, the economy showed a sign of recovery except for some regions where the infectious disease (COVID-19) began to spread again,” said Kansai Paints in its annual report for the period ending 31 March 2022.
“While South Africa and neighboring countries continued to face a sluggish economy due to the rebound of COVID-19, the decorative coatings sector succeeded in absorbing demand, which led to growth of sales in the Southern Africa region,” the company added.
“Also in the East African region, sales grew in the decorative coatings sector by absorbing strong demand, resulting in year on year sales growth in Africa as a whole,” Kansai’s report added.
Furthermore, the Kansai performance report affirmed an improvement in the company’s profitability “due to our efforts to liquidate unprofitable businesses and reduce fixed costs since the previous fiscal year.”
Despite the still looming uncertainty in the global coatings market largely due to inadequate supplies and soaring prices of raw materials drive by the emerging geopolitical risks, leading industry players AkzoNobel and Kansai Paints have taken advantage of Africa’s slow but steady economic bounce-back to seal an acquisition deal that now awaits approval of relevant regulatory authorities.
AkzoNobel, a Dutch multinational company known for creating paints and performance coatings for both industry and consumers globally, seems to have taken its ‘Grow & Deliver’ strategy a notch higher after it struck a deal to acquire Kansai Paints operations in Africa.
The Amsterdam-based company, with operations in more than 80 countries, said the acquisition of the business from the Japanese paint maker is part of its ‘Grow & Deliver’ strategy that has at its core the objective of pushing it to a leading spot in both large and attractive markets, manufacture and distribute world class portfolio of brands and generate at least 50% of its revenue from emerging markets.
A statement by AkzoNobel says the company’s deal with Kansai Paints is part of its drive to “further expand its paints and coatings business in Africa and provide a strong platform for
future growth.”
“Acquiring Kansai Paint’s activities in the region will help us to further expand our paints and coatings business in Africa and provide a strong platform for future growth,” said AkzoNobel CEO Thierry Vanlancker in a statement.
The AkzoNobel agreement with Kansai Paints is expected to be completed in the course of 2023 subject to regulatory approvals.
“Kansai Paint shares our commitment to innovation and sustainability, and we look forward to combining our expertise, which will result in a wider range of innovative products and more sustainable solutions for our customers,” he said.
Under the agreement announced on June 1, 2022, AkzoNobel will acquire Kansai Paint’s Plascon brand, which has more than 100 years of heritage in South Africa, which together with the company’s own Dulux brand have the “longest-established paint brands in the region.”
AkzoNobel had previously in 2008 closed a deal to acquire Imperial Chemical Industries plc (ICI), an acquisition the Dutch paint maker said positioned its coatings businesses in good stead “in terms of geographical spread, portfolio, brands, and technology to continue to deliver further profitable growth.”
ICI, before being acquired by AkzoNobel, had purchased the Dulux paints business from South Africa’s AECI for $106 million in cash. The acquisition included a stake in AECI’s shares in the Dulux subsidiaries in Botswana, Zambia, Swaziland, Malawi and Namibia.
AkzoNobel said the intended acquisition of Kansai Paints’ African operations “also includes automotive and protective coatings, and coatings for wood and coil.”
“We are convinced that AkzoNobel is the best owner as AkzoNobel considers the decorative paints business as a core business and will therefore be able to unlock the full potential of the business, thereby contributing to the development of the African economy,” said Kunishi Mori, Kansai Paint’s president, in a statement.
“The acquisition will complement our portfolio of leading positions in attractive markets and world class brands in Africa, while driving growth in relevant emerging markets,” added Jan-Piet van Kesteren, managing director of AkzoNobel’s Decorative Paints Europe, Middle East and Africa business.
He said the new deal with Kansai Paints “offers us the unique opportunity to welcome another strong brand with a heritage of more than 100 years and a wide distribution network.”
The proposed acquisition follows on from a series of recent acquisitions by AkzoNobel across paints and coatings over the last two years, including Titan Paints in Spain and Portugal, New Nautical Coatings in the U.S. and, most recently, Grupo Orbis in Latin America.
For Kansai Paints, the deal with AkzoNobel supports the company’s “continuous improvement of our portfolio,” a strategy the company launched in November 2021 under its 17th mid- term plan announced in November 2021.
The Japanese company views the transaction to be in line with its strategy and one that is expected to herald a turning point for a shift to a sustainable growth cycle in earnest.
With Kansai Paints’ net sales and ordinary income from its Africa operations jumping 29.4% year on year to 36,131 million yen ($267,131 million), the disposal of its business in the continent to AkzoNobel appears to have come at a truly opportune time.
“In Africa, the economy showed a sign of recovery except for some regions where the infectious disease (COVID-19) began to spread again,” said Kansai Paints in its annual report for the period ending 31 March 2022.
“While South Africa and neighboring countries continued to face a sluggish economy due to the rebound of COVID-19, the decorative coatings sector succeeded in absorbing demand, which led to growth of sales in the Southern Africa region,” the company added.
“Also in the East African region, sales grew in the decorative coatings sector by absorbing strong demand, resulting in year on year sales growth in Africa as a whole,” Kansai’s report added.
Furthermore, the Kansai performance report affirmed an improvement in the company’s profitability “due to our efforts to liquidate unprofitable businesses and reduce fixed costs since the previous fiscal year.”
Despite the still looming uncertainty in the global coatings market largely due to inadequate supplies and soaring prices of raw materials drive by the emerging geopolitical risks, leading industry players AkzoNobel and Kansai Paints have taken advantage of Africa’s slow but steady economic bounce-back to seal an acquisition deal that now awaits approval of relevant regulatory authorities.
AkzoNobel, a Dutch multinational company known for creating paints and performance coatings for both industry and consumers globally, seems to have taken its ‘Grow & Deliver’ strategy a notch higher after it struck a deal to acquire Kansai Paints operations in Africa.
The Amsterdam-based company, with operations in more than 80 countries, said the acquisition of the business from the Japanese paint maker is part of its ‘Grow & Deliver’ strategy that has at its core the objective of pushing it to a leading spot in both large and attractive markets, manufacture and distribute world class portfolio of brands and generate at least 50% of its revenue from emerging markets.
A statement by AkzoNobel says the company’s deal with Kansai Paints is part of its drive to “further expand its paints and coatings business in Africa and provide a strong platform for
future growth.”
“Acquiring Kansai Paint’s activities in the region will help us to further expand our paints and coatings business in Africa and provide a strong platform for future growth,” said AkzoNobel CEO Thierry Vanlancker in a statement.
The AkzoNobel agreement with Kansai Paints is expected to be completed in the course of 2023 subject to regulatory approvals.
“Kansai Paint shares our commitment to innovation and sustainability, and we look forward to combining our expertise, which will result in a wider range of innovative products and more sustainable solutions for our customers,” he said.
Under the agreement announced on June 1, 2022, AkzoNobel will acquire Kansai Paint’s Plascon brand, which has more than 100 years of heritage in South Africa, which together with the company’s own Dulux brand have the “longest-established paint brands in the region.”
AkzoNobel had previously in 2008 closed a deal to acquire Imperial Chemical Industries plc (ICI), an acquisition the Dutch paint maker said positioned its coatings businesses in good stead “in terms of geographical spread, portfolio, brands, and technology to continue to deliver further profitable growth.”
ICI, before being acquired by AkzoNobel, had purchased the Dulux paints business from South Africa’s AECI for $106 million in cash. The acquisition included a stake in AECI’s shares in the Dulux subsidiaries in Botswana, Zambia, Swaziland, Malawi and Namibia.
AkzoNobel said the intended acquisition of Kansai Paints’ African operations “also includes automotive and protective coatings, and coatings for wood and coil.”
“We are convinced that AkzoNobel is the best owner as AkzoNobel considers the decorative paints business as a core business and will therefore be able to unlock the full potential of the business, thereby contributing to the development of the African economy,” said Kunishi Mori, Kansai Paint’s president, in a statement.
“The acquisition will complement our portfolio of leading positions in attractive markets and world class brands in Africa, while driving growth in relevant emerging markets,” added Jan-Piet van Kesteren, managing director of AkzoNobel’s Decorative Paints Europe, Middle East and Africa business.
He said the new deal with Kansai Paints “offers us the unique opportunity to welcome another strong brand with a heritage of more than 100 years and a wide distribution network.”
The proposed acquisition follows on from a series of recent acquisitions by AkzoNobel across paints and coatings over the last two years, including Titan Paints in Spain and Portugal, New Nautical Coatings in the U.S. and, most recently, Grupo Orbis in Latin America.
For Kansai Paints, the deal with AkzoNobel supports the company’s “continuous improvement of our portfolio,” a strategy the company launched in November 2021 under its 17th mid- term plan announced in November 2021.
The Japanese company views the transaction to be in line with its strategy and one that is expected to herald a turning point for a shift to a sustainable growth cycle in earnest.
With Kansai Paints’ net sales and ordinary income from its Africa operations jumping 29.4% year on year to 36,131 million yen ($267,131 million), the disposal of its business in the continent to AkzoNobel appears to have come at a truly opportune time.
