Asian Paints, a subsidiary of India's largest paints company - Asian Paints Ltd, agreed to buy 51 pc equity stake in Kadisco Chemical Industry Plc of Ethiopia, following the approval by the Indian company's board on Tuesday, April 15, 2014, of a proposal by Kadisco.
Kadisco is a family business established in 1991 with a capital of five million Birr. It manufactures adhesive, glues and paints, with a 30pc market share in paints. The company has been approaching various companies in differenct countries seeking partnerships, according to Kelifa Abdulkadir, manager of the company and co-owner with his four children.
Most of those approached, he said, were only interested in expanding their markets without offering any technology transfer.
Asian Paints Ltd produces and distributes decorative and industrial coatings across India, Asia, Middle East, Caribbean and South Pacific Islands through its subsidiaries and joint ventures, according to its website.
The negotiation of the partnership between Kadisco and the Asian Paints has taken over two years and managers of the Asian company have visited Ethiopia more than five times in order to make sure the safety and practicality of their investment.
"Our rationale behind going for partnership with the Asian Paints is the increment of the quantities as well as the quality of the Kadisco products," says Kelifa Abdulkadir, owner of Kadisco.
To expand its production and increase its size the factory needs an international experience and the partnership with the Company, says Kelifa.
Kadisco's capacity in 1991 was two million litres of paint a year, which, currently, has grown to 30 million litres, says Kelifa.
Asian Paints is one of the largest chemicals company in India with operations in 24 countries with combined paint manufacturing capacity of around 330 million litres a year, according to its website.
The investment license process may take two months, according to Kelifa. He hopes to be able to increase the production capacity of his company by 30pc a year if the agreement works out.