Asian Paints, which has a 55% share in the domestic market, has been focusing on organic as well as inorganic growth to maintain its leadership. After acquiring 51% in Sleek International (kitchen solutions provider) in August 2013, it recently announced the acquisition of Ess Ess Bathroom Products for an undisclosed sum. CMD KBS Anand shared
the company’s strategic plans in an interview with Lalitha Srinivasan. Excerpts
You posted a 15% increase in profit in Q4FY14. What were the major drivers?
The main reasons were strong volumes growth, a revision in interest rates for gratuity investments, resulting in reversal of expenses, and a stronger rupee, leading to a forex gain.
What is the rationale behind acquiring Ess Ess Bathroom Products?
This is part of our strategy to enter the home improvement sector in India ? in this case, the bath and wash segment. We feel this sector has considerable synergy with our retail paint business ? we address the same consumers and distribute our products through the same channels (our retailers).
Are you scouting for more acquisitions?
We have just entered the home improvement space, and are open to acquisitions in other areas as long as they make economic sense and fit our requirements. To expand our international presence, we recently entered into an agreement with Kadisco Chemical Industry of Ethiopia, where we are acquiri ng 51% stake.
Why did you close your
oldest plant at Bhandup?
It was an old and sub-scale small plant, set up in 1956. It was not economical to operate vis-a-vis our bigger, newer plants. Also, there wasn?t enough space to make it operationally safe, just as our other plants. That was a reason of worry considering the large residential and commercial sites in the vicinity.
Are you raising prices to offset rising input costs?
We have implemented a 1% price increase effective May 1 and announced a second increase of 1.2% starting June.
