Acro Paints is a manufacturer of high performance paints and coatings. (document)
New Delhi:
JK Cement today announced its foray into the coatings business by acquiring a 60% stake in Rajasthan-based Acro Paints for Rs 1.53 billion.
Its wholly-owned subsidiary JK Paints and Coatings Ltd has entered into a share purchase agreement with Acro Paints Ltd and its shareholders to acquire a 60% controlling interest in the company.
“Based on a definitive agreement between the parties, the remaining 40% shall be acquired within 12 months,” a joint statement said.
Acro Paints is a manufacturer of architectural and performance paints and coatings.
“The acquisition is a step in JK Cement’s rapid entry into the coatings business, expanding its product offering and potentially entering new markets,” it added.
Acro Paints has two manufacturing plants and is currently undergoing capacity expansion, which is expected to be completed in 2QFY24.
After the expansion, it will have a capacity of 60,000 KL for decorative and textured paints and 6,700 KL for construction chemicals.
“The acquisition of Acro Paints brings strong manufacturing capabilities and comprehensive product formulations, which will scale to meet JK Paints & Coatings’ business plan objectives over the next few years,” the statement said.
Raghavpat Singhania, managing director of JK Cement, said the acquisition will create an adjacency relationship which will be a key growth driver for the company.
Madhavkrishna Singhania, CEO of JK Cement, said: “We have a focused launch plan to gradually deepen our presence in strong markets over the next few years and have identified specific geographic, product and channel niches that we will dominate .We will leverage on these strengths as we expand in the coatings industry and enhance both of our brands.” The statement said Acro promoters Charanjeet Gaind and Ashok Gaind will continue their work over the next year, which will Offer an opportunity to benefit from their experience.
JK Cement has an annual installed capacity of gray cement of 20 million tons.
Recently, several companies have ventured into the coatings business, which is largely dominated by a handful of companies. According to reports, India is the third largest paint consumer in the world.
According to a report by market and consumer data provider Statista, Asian Paints is the leading company in 2020 with a market share of approximately 39%. In the organized segment, Asian Paints is leading in the Decorative market segment while the Industrial segment is led by Kansai Nerolac.
In 2019, JSW Group announced its entry into the coatings business. Aditya Birla Group company Grasim Industries has also entered the space with an investment of around Rs 10,000 crore.
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