OSAKA -- Kansai Paint plans to invest about 7 billion yen ($56.4 million) to build a new factory in India, taking advantage of growing demand there for building coating materials.
The company, which controls roughly half of the Indian market for automotive paints, wants to strengthen operations in coating materials for housing and buildings as the economy recovers.
India's paint market is now estimated at about 500 billion yen. It has been growing at a 15%-plus annual clip and is set to top 1 trillion yen in a few years.
The economy is in a good place, thanks to deregulatory measures introduced since Prime Minister Narendra Modi's government came to power last year.
The new facility will be Kansai Paint's fifth in India. The company will buy land near an existing factory in the western state of Gujarat to build the plant, which will have an annual capacity of about 42,000 tons.
At the new factory, "we will first produce coatings for houses, then paints for automobiles," President Hiroshi Ishino said.
The company plans to increase Indian output capacity 20% by 2017, hoping to more than double sales in the country to 150 billion yen a year.
Kansai Paint has strength in value-added products, including "energy-saving paint" to maintain temperatures inside buildings and paint designed to repel insects. Recently, it has roughly doubled the stores handling its products from about 7,000 in 2013 to 15,000.
With a roughly 15% share in building coating materials in India, Kansai Paint aims to narrow the gap with homegrown market leader Asian Paints after the new plant gets up and running.
The company's automotive paints fared well in India during the year ended March 31. Sales rose a little over 20% on the year to about 70 billion yen -- second only to its home market of Japan.
The global paint market amounts to some 10 trillion yen, with such Western leaders as AkzoNobel of the Netherlands and PPG Industries of the U.S. reigning at the top.
While each of the top three rings up well over 1 trillion yen in annual sales, the rest are similar in size. Kansai Paint is believed to be in eighth place but is quick to expand in some markets, such as Africa.