Japanese paint manufacturing giant Kansai Plascon says its merger with Astra Industries is expected to yield good results in the next two years.
BY TARISAI MANDIZHA
Last year, Kansai Plascon partnered with Astra management and staff to acquire a 63,25% interest in the issued share capital in Astra, from the Finance Trust of Zimbabwe, an investment vehicle owned by the Reserve Bank of Zimbabwe.
In an interview with Standardbusiness, Kansai Plascon executive director Africa operation Ebrahim Mohamed said the group was aware the Zimbabwean company Astra was operating in a very difficult environment.
He said they would focus on cost reduction, adding new products to the portfolio as well as opening many more stores which have all the product stocks.
“We know we are operating in a very difficult environment, however with the merger with Kansai we have only been on the market for a year. We are currently boosting the technical support for all our products, reformulating many of the Astra products to conform to the Kansai formulation and l think we will really see the benefit of the Kansai and Astra merger in the next two years,” Mohamed said.
He said the group was focusing on cost containment as prospective clients were constrained in terms of disposable income due to economic conditions in the country.
“We have to contain our costs to keep our prices as low as possible and in terms of the existing dealership; that we grow our market in the dealership so that we grow our market share,” he said.
Mohamed however said Astra market share was currently at 65% and the capacity utilisation was 62% and 50% in Harare and Bulawayo respectively.
“We are probably the leading paint company in Zimbabwe. We are working towards the strengthening of Astra brands because it’s the local brand and make sure we bring more Plascon products available to the market for the local consumers,” he said.
Mohamed said the group was working towards the acquisition in East Africa that should be concluded in the next two to three months and was also planning to buy a second company in North Africa. He said it was looking at setting up a new facility in Kigali, Rwanda.
Meanwhile Kansai Plascon and Hemistar have made a mandatory offer to acquire shares held by Astra minority shareholders. This will result in the company delisting from the Zimbabwe Stock Exchange.
According to the proposed offer, Astra minority shareholders who accept the deal by August 29 would receive a gross amount of US$0,06213 for every Astra share disposed of.