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Kansai Paint plots return to promising market

OSAKA -- Having withdrawn from Iran in 2013, Kansai Paint plans to buy back into a former joint venture there now that economic sanctions against the country are being lifted.

     While such companies as Toyota Motor and Nissan Motor are considering resuming exports to the Middle Eastern nation, there have been no known plans for a Japanese corporation investing in a business in post-sanctions Iran until now, according to the Japan External Trade Organization.

     Kansai Paint held a 40% stake in the joint venture set up in 2009, but then sold its interest to its joint venture partner over sanctions imposed over Iran's nuclear program. With Japan having decided in January to lift sanctions, the company aims to take a roughly 40% stake again through such means as buying back shares from the partner.

     Kansai Paint hopes to supply automakers in Iran, including Saipa, a major local player that France's Renault is considering partnering with. The Japanese company will provide the latest technologies for producing automotive paint to the joint venture's factory on the outskirts of Tehran.

     Roughly 1 million new automobiles are sold in Iran each year. The country "is very likely to grow into a Middle Eastern auto export base," Kansai Paint President Hiroshi Ishino said.

     With repairs to petrochemical plants expected to get underway, demand is seen growing for paint for storage tanks and pipelines. Kansai Paint aims to eventually also supply paint for homes and buildings.

     Kansai Paint, Japan's largest supplier of automotive paint, is strong in South Africa and controls half of the Indian market. The company aims to use its re-entry into Iran as a springboard for tapping other markets of the Middle East.


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