64-year-old Wee Siew Kim, Director, Representative Executive Officer & Co-President, Nippon Paint Holdings Co. Ltd and Group CEO, NIPSEA Group, talks about the importance of India as a growth driver. Speaking with Business Today, he also shares his views about the possible acquisitions in India. Edited excerpts:
How important is India in terms of growth and expansion?
India is exciting for us because I believe we fit so well into what the Indian government wants as the future. Today, as I understand, the future is articulated in three pillars—Make in India, skills enhancement as well as ensuring that the product thrives and leads to an export arm. So why do we say we’re excited? Because Nippon Paint in India is a very young company.
And I say young mainly because although the Nippon Paint brand is old, in India, we are 20 years old. What we do differently is to ensure that we deliver a product that stands apart from the market. And right from the get-go, it’s about innovation.
We started the auto refinish business in India from scratch. We put together a qualified Indian team and are developing products for India.
But what is more encouraging is that we have begun to not only make for India but also to export out of India. If you look at the auto refinish market, we are the only brand that uses India as a manufacturing base and exports. We go to markets where India has an advantage, such as the East African countries and the Middle East. And hence, right from the start, we build the capability, which is the talent side, and we build the export arm.
How much has Nippon Paint Group invested in India so far, and what revenue has been it generated?
We have invested in at least four businesses in India. Lately, we’ve been very focused on our auto refinish business. It has become the engine of growth for the entire group. Although we have pre-existing businesses in different parts of the group, the strength of our Indian operations has always been India. We develop a product not only made in India but made in India for the world. Which means that we take into consideration not only Indian requirements but also make sure it is an international product.
We also have our industrial businesses, a key part of which is also being built in India for the rest of the world, because our core business is primarily supplying to steel manufacturers. India is such a value-demanding country. It drives us to push the envelope in terms of driving the right price.
Then, we have the decorative products business, an area where we’ve invested a lot in because a large part of the decorative business is a B2C business.
Are you looking for some acquisitions and partnerships to enhance your market penetration?
Our inorganic growth is through acquisitions—a case in point would be our auto refinish business. In the last three years, one-third of the growth of our auto refinish business has been underpinned by acquisitions. And these are Indian acquisitions. They not only bring new brands to us but also bring new technologies and products.
For example, now we are a significant player in the Indian railways market, where we were not present three years ago. And we are now very confident that we’re going to play a big role using auto-refinished type products in the industrial market and general industries, again through another acquisition in India.
In India, our automotive business supplies to the auto OEMs and is in partnership with Berger. We compete with Berger in many segments in the Indian market, but in the passenger vehicle market, we are partners. So, for us, we have a clear view. If it makes sense, we can always partner, and if it doesn’t make sense, we go alone.
Are you looking to acquire AkzoNobel’s India operations?
Well, I think everybody is looking at it, mainly because it’s such a rare asset. It’s a good brand, probably very good management, good product and good standing in the market. But as in all acquisitions, we must ensure that we get value out of it.
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