Krishnaswamy in Calcutta on Monday. Picture by
Kishor Roy Chowdhury
Calcutta, Aug. 11: Akzo Nobel is looking to make inroads into the Bangladesh paint market.
The company has entered into a distribution arrangement with a local company and plans to set up a manufacturing plant in the neighbouring country.
Managing director Jayakumar Krishnaswamy said the company had chalked out a three-pronged strategy to develop its business in Bangladesh.
The first step is to set up a distribution channel. “We have entered into a distribution arrangement with ACI (Advanced Chemical Industries) in Bangladesh last year,” Krishnaswamy said on the sidelines of the company’s 60th annual general meeting here today.
He added that the Indian arm of the Dutch paint maker would next focus on building capacity. It will enter into an arrangement with the local partner under which paints will be manufactured locally after sourcing raw materials from India.
The final stage involves the setting up of a manufacturing plant. Krishnaswamy said typically the company sets up a plant after garnering around 5 per cent market share and the process could take around 3-5 years. He, however, said a plant could help to offset the high import duty on paint products into Bangladesh.
The Bangladesh paint market is estimated at Rs 1,500 crore with decorative paints constituting around 70 per cent. Major Indian companies such as Asian Paints and Berger Paints have a presence in the country.
On the domestic front, the company will focus on consolidating its business. “We have invested around Rs 240 crore in the last three years. The focus now will be on developing the topline,” Krishnaswamy said.
Akzo Nobel has posted a 59 per cent growth in net profit for the quarter ended June at Rs 55.18 crore against Rs 34.81 crore a year ago.