Kansai Paint Company Ltd. - Company Profile, Information, Business Description, History, Background Information on Kansai Paint Company Ltd.

4-3-6 Fushimi-machi, Chuo-ku

Company Perspectives

Corporate Mission: 1. To further build company credibility with the public and to contribute to society, by providing products and services that achieve customer satisfaction. 2. To build on our knowledge and strive for technological innovations, in order to improve the company's performance. 3. To harness the collective efforts of all individuals, to maximize the company returns.

History of Kansai Paint Company Ltd.

Kansai Paint Company Ltd. is one of the world's top ten producers of paints and coatings for the automotive, industrial, marine, decoration, and other industries. Kansai is also an industry leader in the research and development of new paint and coating technologies, such as its RETAN PG HYBRID, a one-pack basecoat for the automotive market, launched in 2005; "Super Silicone" roof paints and environmentally friendly home decoration paints; water-based can coatings for the industrial market; and plant-based paints launched in 2006. Products coated in Kansai paints range from automobiles to buildings to soft drink cans to cruise liners to home appliances. Kansai has established a global production and marketing presence.

The company has targeted the Asia market, and operates production facilities and subsidiaries in China, Thailand, Singapore, Malaysia, Taiwan, Hong Kong, and the Philippines, as well as in India, where it owns the number two company in that market, Goodlass Nerolac Paints. Kansai is also present in the United States and Mexico. In 2005, the company established an automotive coatings joint venture with PPG that services the North American and European market. Kansai is also directly present in Europe, with a subsidiary in the United Kingdom. Listed on the Osaka and Tokyo Stock Exchanges, Kansai posted sales of Y196 billion ($1.84 billion) in 2005. The company is led by President Shoju Kobayashi.

Launching a National Industrial Base in 1918

Kansai Paint was founded in Amagasaki, Japan, in 1918 by Katsujiro Iwai. A native of the Kyoto region, Iwai had moved to Osaka around the start of the 20th century, where he started his career as a merchant and trader. Iwai soon became an active proponent of Japan's early efforts to develop its own industrial base. This policy sought to reduce the country's reliance on imported goods, while stimulating the growth of the national economy. By the beginning of the 1920s, Iwai had become the driving force behind the creation of six industrial companies, including Kansai Paint.

Kansai Paint, like Iwai's other businesses, struggled through the economic instability that marked Japan in the 1920s and 1930s. Yet by 1926, Iwai had launched its first true product, CELVA, the first lacquer paint to be developed in Japan. The new product established Kansai Paint as a force to be recognized in the Japanese paint market, and by 1933, the company had expanded its operations, opening an office and factory in Tokyo.

The company resumed growth in the postwar period, opening a new headquarters and primary plant in Osaka in 1950. In the next decade, Kansai launched a new expansion of its production capacity, opening a plant in Hiratsuka in 1960. That facility was joined the following year by another plant in Nagoya. In 1965, Kansai boosted its research and development capabilities, opening a new facility in Hiratsuka. The new operation helped Kansai emerge as one of the leading innovators in the paint and coatings industry. During this period, the company linked up with Nissan Motor Company, a relationship that lasted into the beginning of the twenty-first century and that provided an important foundation for Kansai Paint's growth.

By the mid-1960s, Kansai Paint had begun to establish itself as a leading player in the international paint and coatings market as well. The company established its first foreign operation in Singapore in 1965, setting up a joint venture. The company next turned to Thailand, establishing a new joint venture with Thai Huat in 1968. After opening a new plant in Kanuma in 1971, the company returned to its international expansion, entering Hong Kong in 1974. In 1983, Kansai entered a technology cooperation partnership with India's Goodlass Nerolac Paints, part of the Tata group, and Japan's Nihon Tokushu Toryo. In 1986, Kansai acquired a 36 percent stake in Goodlass Nerolac. By the mid-1980s, the company had added a subsidiary in Taiwan, in another joint venture formed in 1985.

Kansai Paint continued its record of innovation as well. The company developed a new water-based, air-drying synthetic in the early 1970s, which was launched commercially as ASCA in 1974. This was followed by Fantac, a marking film, released in 1985. The following year, Kansai Paint gave a new indication of the flexibility of its technology, when it launched a photoresist for printed circuit boards, called Sonne Eduv, developed in partnership with Mitsubishi. By then, the company had begun construction on a new color research laboratory, which opened in 1986 in Hiratsuka. That facility later took the name of Color Designing and Development Laboratory.

Entering New Markets in the Final Decades of the 20th Century

Kansai continued its international expansion as well. In 1987, the company entered the North American market, launching its Kansai Paint (America) marketing subsidiary. The following year, the company entered South Korea, forming the KDK Automotive Coatings joint venture. Also that year the company launched a new global brand name, Alesco. Back in the United States, Kansai formed a joint venture with Dupont to develop automotive coatings for that market in 1990. The two companies had been cooperating on the development of automotive coatings since the late 1970s; in 1989, Dupont also acquired the production technology and marketing rights in North America and Europe to Kansai's Sonne Eduv product. Kansai itself entered the European market directly, opening a subsidiary in the United Kingdom in 1990.

In the early 1990s, however, Kansai turned its attention toward developing its presence in the newly opening and rapidly expanding Chinese market. The company established its first production subsidiary there in 1992, in a joint venture facility located in Tianjin. The mainland market not only offered Kansai access to lower production costs, but it also gave the company a presence in what was shortly to become the world's most dynamic market.

Kansai continued to expand its Chinese presence into the mid-1990s, launching a new joint venture in Shenyang in 1994. This was followed by a second production facility in Tianjin, the Tianjin Beacon Kansai Paint & Chemicals Co., founded in 1994. China remained a focus for the company's growth into 1995, with the founding of two more joint ventures that year, Chongqing Kansai Paint Co., and Hunan Kansai Automotive Coatings Co., located in Changsa.

Meanwhile, Kansai had not been neglecting its growth elsewhere. The company opened its new Ono factory in Japan in 1992, then built an automobile refinishing center in Hiratsuka in 1994. The company launched a second refinishing center in Amagasaki in 1998. In 1996, the company expanded its operations in Thailand, founding a new subsidiary, Kansai Resin (Thailand) Co. The company also entered Malaysia, through its Singapore subsidiary, setting up KPS Coatings (Malaysia) Sdn. Bhd. in November 1995. That subsidiary began production in July 1996. Back in Japan, Kansai added two more facilities before the end of the century, opening its Technology & Products Development Laboratory in Hiratsuka and its Technical & Business Office in Tokyo in 1999.

Top Ten Paints Producer in the New Century

By then, Kansai Paint ranked at the top of the Japanese paints and coatings industry, operating six factories in Japan and ten more internationally. Despite the company's international growth, the largest part of the group's revenues remained in Japan, which accounted for some 90 percent of group sales in the late 1990s.

Into the 2000s, however, Kansai Paint targeted the wider Asian market for further growth. A major step forward for the company came in late 1999, when the company bought out the Tata group's stake in Goodlass Nerolac, giving Kansai majority control of that company. By then, Goodlass had gained the position of second place in the Indian paint and coatings market.

Kansai's expansion continued into the middle of the decade. The company entered Indonesia in 2000, establishing subsidiary PT Kansai Paint Indonesia. Formed in partnership with local group Gajah Tunggal Praksa, the venture constructed a 350 ton-per-month automotive paint production facility. The following year, the company established two new Japanese operations, Ecosystems, in partnership with Nippon Paint, and NOF Kansai Marine Coatings Co. In 2002, Kansai Paint entered a new market, with the creation of Kansai Paint Philippines. The company also boosted its operations in Malaysia that year, adding a new subsidiary, Sime Kansai Paint. Also in 2002, Kansai Paint acquired a 70 percent share of its Philippines sales agent, PACM.

In addition to adding new subsidiaries and markets, Kansai Paint began investing in expanding production at existing facilities. At the beginning of 2003, for example, the company earmarked more than $4.2 million in a number of its Chinese facilities, doubling its automotive paint production and significantly increasing its marine paint production. By the middle of that year, the company had announced more than $27 million in new investments, in order to triple production at its Tianjin site and more than double production at its Hunan joint venture. By 2004, the company had boosted production at its plants in Shanghai as well.

After winding up its joint venture with Dupont in the early 2000s, Kansai Paint found a new partner in PPG Industries, which created an automotive coatings alliance between the two companies, targeting the North American and European markets. The new company took the name of PPG Kansai Automotive Finishes, and was expected to expand to include marketing and sales operations in China and other parts of Asia.

Through 2005, Kansai Paint continued to build up its stake in Goodlass Nerolac, boosting its share from 64.5 percent to nearly 80 percent. Kansai Paint then joined with Goodlass Nerolac to form a joint venture in order to acquire Malaysia's Sime Coatings in late 2005. By the end of that year, Kansai Paint once again expanded its Chinese presence as well, establishing a joint venture with COSCO International Holdings in December 2005. The new partners then began building a production facility in Zhuhai.

Kansai Paint remained in expansion mode into 2006. The company launched a new investment program of more than Y13 billion ($108 million) in order to increase production at all of its non-Japanese production facilities in Asia. In March 2006, the company's Chinese presence grew once again, with the purchase of a stake in a new company, Hunan Xiangjiang Kansai Paint, which operated a 2,000 ton-per-month automotive paint plant. Kansai Paint also announced plans to build a new water-based automotive paint facility in Guangzhou, expected to start production in the summer of 2006. Kansai Paint's history of expansion had placed it firmly among the world's leading paint and coatings producers.

Principal Subsidiaries

Chongqing Kansai Paint Co., Ltd. (China); Goodlass Nerolac Paints Ltd. (India); Hunan Kansai Automotive Coatings Co., Ltd. (China); Kansai Paint (America), Inc.; Kansai Paint (Asia) Pte. Ltd. (Singapore); Kansai Paint (Singapore) Pte. Ltd.; Kansai Paint Europe Limited (U.K.); Kansai Paint H.K. Ltd.; Kansai Paint Philippines, Inc.; Kansai Resin (Thailand) Co., Ltd.; KDK Automotive Coatings Co., Ltd. (Korea); P.T. Kansai Paint Indonesia; PPG ALESCO Automotive Finishes Mexico, S. de. R.L. de C.V.; PPG Kansai Automotive Finishes Canada, LP; PPG Kansai Automotive Finishes UK, LLP; Shanghai Cosco Kansai Paint & Chemicals Co., Ltd. (China); Shenyang Kansai Paint Co., Ltd. (China); Sime Kansai Paints Sdn. Bhd. (Malaysia); Taiwan Kansai Paint Co., Ltd.; Thai Kansai Paint Co., Ltd.; Tianjin Cosco Kansai Paint & Chemicals Co., Ltd. (China); Tianjin Winfield Kansai Paint & Chemicals Co., Ltd. (China).

Principal Competitors

Akzo Nobel Coatings N.V.; PPG Industries Inc.; Sherwin-Williams Co.; DuPont Coatings & Color Technologies Group; ICI Paints; BASF Coatings AG; Valspar Corporation; SigmaKalon Group B.V.; Nippon Paint Co. Ltd.; Kansai Paint Co. Ltd.


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