MUMBAI: As reported by DNA Money on March 7, Sherwin Williams, the $7.1-billion US-based paints major, has acquired city-based Nitco Paints for Rs 200 crore. The deal is learnt to have been signed on Monday, though a formal announcement is expected only today.
Sanjiv Batra, CEO, Nitco Paints conceded that “A deal has been signed with Sherwin Williams, wherein they are buying out Nitco Paints. I can’t disclose more information at this stage, though I will be a part of Sherwin Williams.”
Nitco Paints is an associate company of Nitco Tiles and is into exterior paints. It sells a plethora of coatings and textures and is a strong player in western India.
Industry experts believe Sherwin Williams’ foray into India will change the dynamics of the colour space in the country. Asian Paints, Berger, Kansai Nerolac, ICI Paints and Shalimar are the major players in this segment today.
Analysts say the domestic paint industry, which has not seen much action on the merger and acquisition front in a long time, is set to witness consolidation now - especially, acquisition of smaller brands and companies in the growing industrial segment.
Most local firms have tied up with or are in the process of tying up with international paint majors to have access to the latest technology. A tie-up with a global paint manufacturer also enables the domestic company to supply to local customers of its partner.
The local paint industry was estimated at around Rs 8,800 crore in 2005-06, with organised players holding 70% of the market. The industry is expected to see a 15-20% increase in capacity in the next three years, given the current growth in demand. The five-year compounded annual growth in demand is estimated at 8.5% for 2002-07.
The figures are backed by increased activity in industrial paints, particularly with the entry of MNCs into the auto and consumer durables segments, which have been gaining steadily over decorative paints.
Last month, Sherwin Williams acquired Philadelphia-based M A Bruder & Sons Inc, which makes and distributes paints and coatings in the eastern and southern United States.
