After being acquired by Japanese company Kansai Paint in 2011, South Africa’s Plascon paint brand is now aiming for market leadership across the entire African continent. Kansai Plascon Africa CEO, Farid Masood, tells Enterprise Africa that the company hopes to more than double in size in the next five years.
Much of the success realised by South Africa’s leading paint and coatings business, Kansai Plascon, is owed to its long, interesting history and rich brand heritage. Its roots stretch back more than a century, to a time when there was little industry in South Africa, and when the company offered floor polish, carriage varnish, and ready-mixed tinted paints. It was the brainchild of Herbert Evans, a Welshman who had moved to South Africa and brought his trade with him. After his arrival in Johannesburg and the establishment of his business, growth came quickly. Herbert Evans & Co became known for quality, and excellent customer service. At the same time, Solly Rudner was building his own company, Chrome Chemicals, the manufacturer of Plascon Paint. Plascon quickly became recognised as an industry leading product and in 1945 created its own company, Plascon Paints and Chemical Industries. In 1970, Plascon Paints and Chemical Industries merged with Herbert Evans & Co to form Plascon Evans, which for the next 30 years became the driver of innovation and excellence in the retail, trade, industrial and furniture coatings markets in South and Southern Africa. With the Japanese acquiring Plascon in 2011, the new focus is on creating a business with a footprint across most of the African continent.
Recently appointed CEO, Farid Masood tells Enterprise Africa that, despite the fact that Plascon’s owners reside in the Far East, direction and strategy planning for the Pan-African business remains in South Africa. “We define the business plan and how we want to grow,” he adds. “Whilst we get input and guidance from Japan, goals are set by the team, management and board that sits here in South Africa.
Farid Masood – CEO, Kansai Plascon Southern Africa
“The acquisition of Plascon by Kansai was part of Kansai’s aspirations to become a much more global business,” he says. “Kansai’s philosophy has been to give acquired businesses autonomy, allowing them to operate the way they have in the past. Plascon has been a South African business for the last 128 years and the brand surely remains South African. So we are trying to leverage the benefits of this very strong Plascon brand in the market, combined with the expertise we extract from Japan, to grow across Africa.”
Having originally focused only on auto paint manufacturing, Kansai has grown and is now one of the largest suppliers in the world for OEM auto paint. “Many of the Japanese auto companies are our customers (Toyota, Nissan etc.), and we want to leverage that R&D expertise into Africa – the R&D that goes into paint is first class,” says Masood.
Thanks to the local expertise, and the historic success that the company has realised in the decorative paints market, Kansai Plascon Africa is beginning to contribute ideas and innovations to the global business.
“Plascon is a leader in decorative paints with world class products that have been developed locally in SA, which are helping Kansai grow throughout the world, “ explains Masood. “In Africa, we have developed a design and décor concept using paint in conjunction with design. We call it ‘Spaces’ and Kansai has adopted that concept, using it in different parts of the world, most recently in Russia.”
PAN-AFRICAN GROWTH
Masood explains that today, the ultimate goal for Kansai Plascon is to build a Pan-African business and continue with the type of growth that has been achieved throughout its history, with his immediate focus being on expansion in East Africa.
“On my agenda, East Africa is the number one area for growth and we have already started an operation in Kenya. With the substantial opportunities available in this territory, together with our expertise and brand, we are well positioned for East African growth,” he says. “In East Africa, we think Kenya is a market that will continue to grow, supported by favourable economic and political developments that are happening there. It’s very exciting for us. Uganda, Tanzania and Ethiopia are all very strong destinations for the coatings business.”
The company already has three iconic manufacturing sites in South Africa, at Mobeni, KwaZulu-Natal; Luipaardsvlei in Krugersdorp; and Epping in Cape Town. The most recent addition being a manufacturing and distribution business for decorative paints in Nigeria, established through a local partnership. Automotive Refinished coatings will be introduced in Nigeria in due course.
Slow growth in South Africa has emboldened the company to move quickly and accelerate its African growth. “We see massive growth across Africa and we want to be the leading player in all regions of Africa,” says Masood. “The SA economy has remained flat for a number of years, limiting our growth in this market and hence we are looking to East and West Africa for expansion opportunities. Both are markets that we see growing with infrastructure development and construction. We will consider greenfield, acquisitions and partnership opportunities to expand, as we’ve done in Nigeria with the local partnership set up. We will use this as a base to expand into other areas, particularly Ghana, Ivory Coast and Senegal.”
With the SA economy not creating big opportunities for growth, some companies have struggled in recent years and have been forced into consolidation strategies rather than Pan-African growth. Minimal GDP growth, constantly changing exchange rates, low investor confidence and political uncertainty have not helped encourage serious growth, but fortunately for Kansai Plascon, the effect of a bleak economic outlook has not caused serious concern.
“We’ve been able to maintain our current position, although we haven’t grown as much as we should have,” says Masood. “We’ve been a premium brand, at the high end of the market in Africa for a long time. That part of the market has remained flat and we don’t see much growth there. We do see growth in the mid-tier decorative segment and that is where we will be repositioning ourselves. In the next couple of years, we will be expanding into these segments aggressively. There’s a lot of opportunities around industrial and protective coatings, we also have a very strong auto-refinish business and we will be growing those areas as well.”
PAINT PEOPLE
Even with all of the innovation and technological advancements that Kansai Plascon has achieved, it would not have grown to hold the strong position that it does now without the ongoing commitment and passion of its people. Masood views people development as a business imperative and explains that being able to harness skills from other parts of the world is a real advantage.
“People strategy is critical. One of the biggest advantages is being part of a multinational group,” he says. “Attracting, selecting and developing people to the level that is needed for the next ten years is a challenge, but we are geared as an organisation to achieve this. We have a large Kansai business in India and Asia, we have operations in Japan, we’re growing in the Middle East and North Africa, we’ve just bought a company in Europe, and so this opens up significant opportunities for collaborative learning as we grow and learn from each other around the world.
The CEO himself has utilised his experience with the company in other regions to help his own development and now, working with a large and experienced team, he says that it’s the quality of the employee base that allows Kansai Plascon to set its standards so high.
“I have spent the last 10-15 years working in emerging markets and helping businesses grow from an investment banking and private equity stand point and that has helped me. I helped Kansai set up the business from a financial perspective in the Middle East and North Africa and that’s how I got to know the company.
“When they asked me about expanding across Africa, I knew that I could bring my expertise and help them grow but I had to learn about the paint business. When I was interviewed, I explained that I didn’t know much about paint, but I was told I have 2700 people across Africa who know a lot about paint. I bring knowledge on finance and running businesses in emerging markets, and we have a lot of people who know about running a paint business. So, we work together as a team, where our combined strengths enable us to set higher expectations and deliver on our goals,” he says. Since joining the business in April 2016, Masood has set out his ambitions very clearly, and with a strong brand, international quality standards, world class innovation, and extensive local industry knowledge, there’s no reason why these goals cannot be met.
“We want to grow our business by two and a half times in the next five years and the key to achieving this ultimately is through building a capable organisation with skill sets that will meet the new business challenges across Africa, “ he concludes.