Over the last few months, there has been increased advertising by one company, Kansai Plascon. This expenditure comes after the global paint company bought the franchise holder of Sadolin Paints East Africa. The bombardment in terms of advertising has been a result of Plascon introducing itself on the Ugandan market since they did not want to continue using the Sadolin name. The CEO Magazine’s Jeff Winters talked to the CEO Plascon Uganda, Chris Nugent on the transition from Plascon to Sadolin.
1.Why was it necessary to rebrand from Sadolin to Plascon considering the equity that had been built around the Sadolin Brand?
Sadolin is a trade name that belongs to our previous partners. Following the acquisition, our business had to change its paint brand to Plascon and the business name to Kansai Plascon. The people, paint and company remain the same that our customers have come to trust over the last 55 years in Uganda, the advantage now is having a pan-African paint brand and an owner who is invested in the success of Africa.
- What is the current paint market demand and supply in Uganda?
It is hard to say for sure since there is no actual data or research that’s been done specifically for the paint market, but I would estimate the demand to be at about 4 million liters per month and we supply 60% of the market.
- What is currently driving the demand for paint in the country?
The Ugandan and in fact East African market is one of the fastest growing economies for paint markets not only in Africa but in the world at the moment. This is due to a quickly emerging middle class. Because of this, a lot of money is being invested in infrastructure, development of roads etc. This is not to mention the big shift in urbanization which is driving demand for housing. Our population is young and growing, culturally Ugandans live independently after getting married and with this comes a need for housing.
- Any projections for further growth and what would be driving that growth?
As mentioned, the region is developing at a fast pace and with it, a lot of modern infrastructure going up, so there is still so much potential for the paint market to explore. Uganda also has one of the youngest populations in the world with over 50% of them under the age of 18. These are potential future investors and customers we are yet to tap into.
Strong Vote of Confidence: Mbire Reappointed MTN Uganda Chairman- A few years ago, there were what was termed as “paint wars” as several companies took to the airwaves in unprecedented advertising expenditure. We are seeing a return of that trend. What could be driving this?
The entrance of Plascon and launch campaign has resulted in competitors reacting and increasing advertising and communication campaigns. This shows that they understand that Plascon is a powerful brand and will look to change the market. It also shows that the competition has seen a market opportunity. But this kind of competition is healthy for any industry to grow. The market response is a testament to how we have been able to dominate the market for the past 55 years and how we aspire to do so in the future.
- Plascon is a relatively new name on the Ugandan market, with most still wondering what this could be. How long will it take to build equity and what is being done to make sure there is customer retention?
Over the years we have built a strong brand and even stronger relationships with our customers. It is these relationships with customers, dealers, distributors and painters that we are currently relying on. We have engaged with each of them and shared the reason for the change, described the benefits we see for the Ugandan paint market in the future and shared our confidence in the Plascon brand with them. We are also running an above the line marketing campaign to deliver the message to our customers that the only thing that has changed is the name. We believe customers will respond to the quality of the paint. We set ourselves the ambitious target of completing the rebranding exercise within 90 days of the acquisition and so far we have done about 80% of the process.
- Sadolin is making a return to the market, with another producer and a local partner. How is the current Plascon able to retain customers that may be convinced to return to Sadolin because of the equity it already has?
We are currently carrying out dealer and distributor workshops countrywide, Radio, TV, Outdoor and Print campaigns and direct trade activations to ensure all our customers know that what they now see as Plascon is the original product that they love. The exciting thing about a rebranding like this one is that it helps us to recruit new customers who are eager to try out a new brand. So not only are we focusing on customer retention, but also on acquisition as well and that is how we shall continue to win in this market.
- What sort of experience and reputation does Plascon bring in the market?
Kansai Paint is a top ten coatings company globally, with world-leading research & development facilities in Japan, India and South Africa, which continually drive innovation and excellence in the paint environment. Kansai Paint acquired Plascon in 2011 with a focus on creating a business with a footprint across Africa. The Plascon brand is the market leader in Southern Africa and has a proud history of over 128 years. Together, Kansai Plascon is now Africa’s No 1 Coatings Company concentrating on aspects such as innovation, technology, color support and technical.
- An announcement was made that there will be no job losses as a result of the takeover. What does this mean in terms of further investment? Is production going to be ramped up?
Our new, modern factory in Namanve has the capacity to produce at more than double its current capacity. As we continue to dominate in this market, driven by rising demand of the product, we shall be looking into increasing production. This means more employment opportunities for people. Plascon will invest further in up skilling our current employees and with our global footprint, skills transfer to enhance capacity and efficiency in the company.
