OSAKA -- Kansai Paint plans to launch Chinese production of automotive paint resins, opening a roughly 3 billion yen ($24.9 million) facility around fiscal 2016.
Amid growing demand in China from Japanese and Western automakers for paint, the Japanese company seeks to better respond to their needs by handling everything from resin to paint production locally.
Equity-method affiliate Hunan Xiangjiang Kansai Coating will set up the plant in Changsha, Hunan Province, close to its headquarters.
With the facility online, about 500 to 600 tons of resins now imported each month from Japan and India will be mostly locally sourced, lowering transportation costs.
Kansai Paint's business in China generates annual sales of about 20 billion yen, or about 6% of group sales. The company enjoys a market share of 60% in paint used by Japanese automakers operating there and has also begun supplying Western automakers.
Demand growth for paint materials is slowing in China because of the decelerating economy. But automotive paint has proved less susceptible to economic conditions than housing paint, according to Kansai Paint President Hiroshi Ishino.
Paint quality depends largely on the resin materials used. With Western autos popular in China, PPG Industries of the U.S. and BASF of Germany enjoy high market shares.