Asian PPG's Korean odyssey has been launched through a 100 per cent OEM contract with Hyundai which will make the joint venture its sole paint supplier. Asian PPG has already bagged such a contract with Daewoo Motors.

"I would leave it to you to assess what success we can expect once Daewoo and Hyundai grow in the coming years in the Indian car market, mounting their challenge against Maruti," Asian Paints vice-chairman Ashwin Dani told the The Financial Express.

The Korean majors are expected to launch their small car challenges against the Maruti 800 by the end of the year. TheHyundai Santro and the Daewoo D'Arts are expected to hit the market soon, and eat into the substantial marketshare held by Maruti Udyog. Goodlass Nerolac leads the industrial-paints market by a length because of its lucrative Maruti contract, and the other players have been hard put to compete with the Maruti 800's tremendous growth rates. However, using PPG's international links, Asian Paints has bagged the Hyundai contract for the joint venture, and this will go some way towards redressing the balance. Already, Asian PPG supplies fully to Daewoo Motors.

This apart, Asian Paints is also looking at developing its own coatings products in future with industrial applications, but Dani said this would happen as and when opportunities arose to apply the company's expertise in such areas. The Asian PPG joint venture was formed during 1997-98, as Asian Paints transferred its automotive-paints business to a joint venture.The formation of the joint venture had an important influence on the Indian partner'sresults.

The company, after its transfer of the automotive-paints business to the joint venture, recorded a negative growth in volume sales, whereas, taken together with Asian PPG's sales, the gross turnover of the two companies showed a substantial upsurge, indicating that the business was doing well.

Asian Paints on Tuesday announced a 21.9 per cent increase in net profit to Rs 67.50 crore for the year ended March 1998, against Rs 55.38 crore in the previous year. Net sales rose 8.6 per cent to Rs 800.34 crore during the year from Rs 737.19 crore last year. Gross sales crossed the Rs 1000-crore mark to touch Rs 1,019.08 crore, up by 8.7 per cent over Rs 937.76 crore last year. Operating profit increased to Rs 117.94 crore from Rs 111.62 crore. Operating profit were under pressure and dropped to 11.57 per cent during the period from 11.90 per cent last year.