Having said they plan to "aggressively pursue" a "very fragmented" China and India paint and coating market for opportunities to expand, it appears Sherwin Williams (SHW) may be close to announcing another acquisition.
Already planning to build a production facility in India, it appears further acquisitions, namely that of a Bangalore-based company, are progressing. When asked recently whether the company is in talks with Surfa Coats Bangalore Ltd, Sanjiv Batra, CEO, Sherwin Williams India replied "It is all in the air and there is no plan of acquisition of any kind at present." He then gave the standard denial, "I am not privy to any such plan where we could be engaged in acquisitions."
But he then continued, "But we are very much on the consolidation mode and the company is thinking on an India-specific business model. We are in the process of engaging external agencies to undertake a marketing survey to do a due diligence of the Indian market. Specific customer tastes and preferences, types of products, price bands and distribution channels will be decided." Uh huh... so it is the old "I do not know but we are" double talk..
Sherwin Williams now has the Nitco exterior paints portfolio in India but has yet to bring in its huge range of interior decoratives to the country. “We cannot have a business model based on imports and hence may think of a suitable manufacturing facility over the next few months. Moreover, Sherwin would be keen to bring in its expertise state-of-the-art plant and processes in India”, he added. Translation: A factory will be built soon.
How much growth is there in the Indian market? Consider the per capita consumption of paint in India is just 1.2 kg per person against 7-8 kg in Malaysia and around 4 kg in China.
India is a massive market for Sherwin and they seem to be racing to dominate it. The Nitco purchase gave then a toehold there and they have both illustrated buy the statements and their actions to date they plan on doing much more.
Look for something to be announced before Columbus Day..