'Akzo Nobel open for partnership or India ops sell-off '

Mumbai: Akzo Nobel, Europe's largest paint maker, is looking at being a part of the consolidation in the Indian paint market either through a partnership with a larger peer or selling off its Indian operations, it said. Earlier this month, the company had said that it would be conducting a strategic review of its decorative paints business in South Asia.

"In markets where there are more natural consolidators, we are very happy to be a minority partner or exit all together," chief executive officer Gregoire Poux-Guillaume told analysts on a call on 23 October.The paint-maker currently has a 5% market share in India, and is one of the most profitable.

It operates under the 'Dulux' brand in the country, has completed seven decades of operations here. It currently has a market capitalisation of more than Rs 17,000 crore.

"As the market consolidates (in India), there are people pushing in, like Grasim from the cement sector, there is Asian Paints solidifying its position, there are other companies also trying to figure out what their differentiating assets are," Poux-Guillaume said.

"It is a good time to have conversations with the various market players to see how we can contribute a winning hand," he said, adding that the company is open to being a "junior partner" to a company which has a larger distribution network than itself.

Akzo Nobel currently operates in India, Pakistan, Sri Lanka and Indonesia in the South Asian region. In India, Asian Paints is currently the largest producer of paints, with Berger Paints India and Kansai Nerolac India among the other large players. Earlier this year, the Aditya Birla group commercially launched its paints operations under the 'Birla Opus' brand, with an initial investment of Rs 10,000 crore.

Some of the other players in the space include JSW Paints, Indigo Paints and Pidilite Industries.

On October 3, AkzoNobel said, "Given this unique market position, the company is well-placed to participate in the further development of the highly dynamic South Asian decorative paints market, which is ripe for consolidation."