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Inside Kansai Plascon’s top management shake-up

Nilesh Jani and Santosh Gumte

Tyron Immelmann, the company’s Marketing Manager East Africa on March 14 could neither confirm nor deny that Specialised Coating was owned by Nugent as he is yet to be equipped well with the company background.

“Specialised Coatings was originally set up so that (the) two entities existed, one a paint manufacturer and the other an application business,” he said.

“With the change to Kansai Plascon, the company was Specialised Coatings was absorbed into Kansai Plascon and no longer exists, any ongoing or long term projects is place is being completed by Kansai Plascon.”

He also denied claim that the Kansai Plascon has lost its market share. Instead, Immelmann said the company has enjoyed a successful brand migration and is proud of its achievements in managing its dealer network, work force and 60% market share.

“The suggestion of underperformance or loss of 40% (turnover) in business is fabricated and untrue,” Immelmann said.

Regarding Nilesh suspension, Immelmann said it is an internal affair and requires the necessary due process to take place.

Since the entry of Plascon in Uganda’s paint market through the acquisition of assets that held Sadolin brand, competition has heightened that at one point the paint firms got caught up in mudslinging and carrying out misleading advertisements.

According to the terms of the Sadolin franchise, Sadolin Paints East Africa was supposed to keep Sadolin Paints products on the market for a year, in case it wanted terminate the deal. Surprisingly, this clause was breached as Plascon immediately went on a rebranding campaign of all Sadolin products.

Plascon moved a step further by going to the courts seeking an injunction on Sadolin not to be in the market. This move infuriated the Sadolin executives who still wanted to save its share of the Ugandan market. It took Sadolin over a month to shake off the injunction, a period Plascon exploited in its favour.

Plascon not only claimed that “Sadolin is now Plascon”, influencing public perception, but also changed the entire Sadolin distribution and value chain.

Sadolin Paints was caught off guard in that although it owned the Sadolin paint formula and quality assurance, it never owned the distribution and value chain, which was Sadolin Paints East Africa’s.

This made Sadolin to partner with the closest rival, Nairobi-based Crown Paints, to set up a US$ 10 million plant the Kampala Business and Industrial Park, Namanve, to manufacture and distribute Sadolin paints.

Since then, competition has remained tense with Sadolin coming up with new strategies including setting up its new distribution network altogether, training painters as well as extending support to upcoming entrepreneurs.

Plascon performance in East Africa

However, Plascon seems to have made inroads in the market and has recorded high sales on the year-on-year basis for the East African business for the third quarter of the year ending March.

The company’s net sales grew 23.7% to 29,733 million yen (Shs981.5billion) on year on year citing increase in sales volume.

Still, despite a rise in sales compared with the same period last year, profitability faced significant pressure from the rise of raw material prices due to currency depreciation and the intensified price competition.

This development comes as latest statistics show that the Middle East and Africa Powder Coating Market is expected to register a healthy compound annual growth rate in the forecast period 2018 to 2025.

AkzoNobel is expected to dominate the powder coating market followed by Kansai Paint, Asian Paints, Jotun and Evonik Industries AG among others.

The new market report that contains data for historic year 2016 and 2017 as the base year of calculation, says increasing technological advancements, growth of stringent environment regulations and rising applications across end-user industries are driving the market.

One comment

  1. Attn: Gumte Santosh
    Managing Director
    kansai Plascon
    Uganda ltd

    I have a lucrative policy preposition for the employees from prudential assurance Uganda ltd, please teach me for details.

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