Kansai Nerolac eyes expansion in Bangladesh

Japanese company Kansai Nerolac will invest Tk 16 crore in its country subsidiary, Kansai Nerolac Paints Bangladesh (formerly known as RAK Paints), to expand its business and grab a bigger piece of the growing South Asian market.

Having entered the Bangladesh market in mid-2018, the East Asian paint maker on Friday announced to have subscribed to 1.65 crore equity shares of the subsidiary.

According to Indian media, the shares have a face value of Tk 10 each.

Vishal N Mothreja, chief executive officer of Kansai Nerolac Paints Bangladesh, told The Daily Star that the people of Bangladesh have accepted their product.

"We are getting a positive response from the people here and have launched a range of new products," he said.

This includes marine coatings, powder coatings, construction chemicals, auto coatings, anti-virus paint and multiple protective coating measures.

"All this requires investment and so, in the future we will only increase our investment and bring different products," Mothreja added.

He said basically the paint market of Bangladesh was increasing significantly over the years, which encouraged Nerolac to increase the investment to provide quality products to consumers.

The size of Bangladesh's decorative paint market was about Tk 4,000 crore in 2019 while it was Tk 3,500 crore in 2017, according to a number of paint manufacturers and the Bangladesh Paint Manufacturer's Association.

However, during the April-June period of 2020, the sector witnessed the worst in the past decade as sales plummeted to almost nil.

Around 40 local and multinational companies are now in operation in the market, which has been witnessing an average growth of around 8 to 10 per cent in the last 10 years.

At present, the annual demand for paint stands at nearly 200,000 tonnes. The local market for decorative paint is not enormous but the future is good as consumption is increasing with economic development.

The market was mainly dominated by foreign companies as they had capital and distributed products among retailers on long-term credit, which was not a possible option for local companies.

The future of decorative painting is bright as the market has been increasing rapidly, which encouraged many foreign companies to invest in the sector.

Berger is the market leader in Bangladesh with a 55 per cent share. The other major local companies are Asian Paints, Roxy Paints, Elite Paint, Pailac Paints, Moonstar Paints, Ujala Paints and Al-Karim Paints & Chemicals.

Akzonobel of the Netherlands, Nippon Paint of Japan and Jotun Paints of Norway are trying to grab a share of the market as well.