- Takeover of SIPCO targeted for completion in fourth quarter
- Japanese paintmaker tapping into India, Gulf growth markets
Kansai Paint Co. plans to buy Saudi Industrial Paint Co., a supplier of protective coatings to Saudi Arabian Oil Co., to tap into Persian Gulf countries’ energy and infrastructure industries.
Terms are still being negotiated and the deal is unlikely to close until the fourth quarter, Kansai Paints President Hiroshi Ishino said said in an interview in Doha on Friday. SIPCO, as the Dammam-based company is known, didn’t respond to requests for comment.
Kansai Paint’s biggest customers are in the Japanese auto industry. The Osaka-based company wants to expand decorative-paints and industrial-coatings sales outside its home market, Ishino said. While a plunge in oil prices has hurt economic growth in the Gulf Cooperation Council, Qatar, Kuwait and the United Arab Emirates are upgrading infrastructure.
India and the GCC “are the fastest-growing regions for the next five years, and we are hoping to expand 10 percent per year in these markets,” the executive said. The acquisition of SIPCO would give Kansai an operational base in Saudi Arabia for supplying protective coatings to the oil and gas industry.
Kansai Paint also restarted a factory in Iran this year and is taking an “aggressive approach” in the country, but delays in reconnecting the financial system to global banks has hindered expansion, said Ishino, who visited Tehran in February. The Japanese paintmaker is also looking at acquisitions in Kenya or Tanzania, he said, declining to identify potential targets.