Interview: “We appreciate the growth potential of Turkish market”

Recently, Nippon Paint acquired Turkish paint manufacturer Betek Boya. We spoke to the Japanese company about the acquisition and the Turkish market.

nterview: "We appreciate the growth potential of Turkish market". Image source: VIPDesignUSA -

The acquisition of Betek Boya is your most recent move in Europe. Why did you choose to expand your presence in this region through an acquisition?

Here are several strategic backgrounds. First of all, Nippon Paint Holdings recognises growth potentials in Turkish decorative market and Betek Boya is a leading player in the Turkish decorative paint for the construction market. By acquiring Betek Boya, our Group will achieve the No.1 position in Turkish market along with Asia, where the company has long had a strong presence. Secondly, for the decorative paints business in Turkey, our acquisition of Betek Boya provides us with an established brand and sales network, instead of forming one from scratch as we understand that the business structure in European paints and coatings will not easily shift dramatically.

Why did you choose Turkey or a company in Turkey?

We appreciate the growth potential of Turkish market, especially in the decorative paints market, where we have not entered yet. Betek Boya, our acquisition target, is the top paints and coatings company in Turkey, and has achieved stable sales growth (with 2013-18 CAGR 14.6 %). The paint and coatings market in Turkey, with stable GDP and high growth potential, is very promising due to the increase of architectural material demand, including paints, along with its economic growth. By acquiring Betek Boya, we are able to become the top paints and coatings company, achieving regional No.1 share, (market share: 25 % in decorative, 30 % in ETICS) in Turkey and will be able to earn brand portfolio with high recognitions as well as to ensure growth of our sales and profit.

How do you rate the Turkish paint and coatings market?

The Turkish paints and coatings market is quite attractive as the population of younger generations is expected to increase along with high GDP growth. In addition, we expect high growth of the decorative paints market due to the progress of urbanisation as well as the expansion of its demand for repainting.

We have seen several acquisitions over the last couple of years in the paint and coatings industry. How do you rate the consolidation in the market?

Consolidation of the paints and coatings industry is an ongoing process, and we are paying close attention to such acquisition activities happening on a global basis. One of our key measure in our 2018-2020 mid-term management plan called “N-20” is to accelerate expansion of business portfolio by implementing M&A mainly in China and Asia. However, NPHD will continuously see possibilities in Europe or Americas if the opportunity (case) contributes to MSV (Maximisation of Shareholders Values). One of the key initiatives in “N-20” is to generate momentum growth as well as to create synergetic effect.

Are you intending to keep all production sites and employees of Betek Boya?

Currently we plan to keep all employees and production sites of Betek Boya. We do not have any plans to downsize at this point.

This interview is part of a longer article on the acquisition published in the June issue of the European Coatings Journal.

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