BUSINESS

Asian Paints' strategy to drive exports

CHENNAI, AUG. 14. The Asian Paints group is pursuing a three-pronged strategy to drive its export business to quarter of its total turnover within the next five years. Largely spun around the emerging markets, the three-way export strategy will primarily see the group train its eyes on markets where it could gain leadership position, countries where it sees opportunities for growth and nations where licensing arrangement possibilities exist. In an informal discussion with The Hindu here on Friday, Jalaj Dani, Vice-President (International), Asian Paints, said exports contributed around 20 per cent of the group's turnover of about Rs. 2,500 crores. The objective was to take it to 25 per cent within the next five years, he added.

The group has under its fold Asian Paints, Apco Coatings, Berger International and Scib. Through Berger International, it has presence in dozen countries. Its presence in Egypt is through Scib. Both are acquired units. Asian Paints has a presence in Sri Lanka through an acquisition. In five countries, it is piggy riding on Apco Coatings.

Mr. Dani said the group had a leadership position in Bahrain, Nepal, South-Pacific Region and the Caribbean. The group, he said, had identified Egypt, the UAE, Sri Lanka, Bangladesh, Thailand and Malaysia as `growth focus areas'. The group felt that licensing arrangement could be the least cost route to grow into some countries. "We can be present in some countries but avoid financial costs," he said. In this context, he said the group had broken into countries such as Indonesia, Pakistan and Malta through this licensing arrangement. The foray into Pakistan and Malta happened only in the last few months.

Under the licensing arrangement, it would provide technology and brand support to local firms with whom it had tie-ups. Mr. Dani said the group had also identified niche countries and segments and citied Oman for wood finish and China for protective coatings. Mr. Dani, who is also the Chairman of Berger International, said post-acquisition of Berger and Scib there had been a good cash flow and asserted that, "We can support the business growth through internal accruals."

To a question, he admitted that it was a real challenge for the group when it acquired Berger nearly one-and-a-half-years ago. "Overnight, they quit 12 countries. It was a real challenge to integrate them with Asian Paints," he said. Mr. Dani said the group still had to do a lot of work on a strategy to cross sell technology/brands/products across varied outfits and geographical areas. Effective alignment of HR (human resources) across operations with the overall group corporate vision would be a tough task ahead in the coming days.

While asserting that "emerging markets will be our play ground," he said the group would follow the `hub and spoke' approach and empower regional centres to build size and skill to drive the value for the group as a whole. A chemical engineer, Mr. Dani entered the family business by default when one of the founder-promoters sold his holding to a multi-national company, triggering a convulsion at Asian Paints. The wheel had come a full circle when the MNC had sold the shares back to the Danis. The younger Dani has a passion to make the group an MNC to reckon with in the international sphere in all respects.

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