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Akzo Nobel India is entering Bangladesh paints market through a tolling arrangement with a local company ACI Formulations Ltd.
Jayakumar Krishnaswamy, MD, Akzo Nobel India told reporters after the company’s AGM that it planned to enter the ₹1,500-crore and 150 million litres of neighbouring market through the arrangement.
ACIFL has a capacity to produce around 2 million litres of paints. “In the initial phase, we would use the facility to produce Akzo brands on fee-based tolling. If the experiment is successful and we are able to make a dent, then we would consider investment in having a capacity of 7-8 million litres at a later stage.”
ACIFL, which is part of a conglomerate in Bangladesh, is now into crop protection chemicals, mosquito pesticides and household chemicals had its lineage in erstwhile ICI Bangladesh Manufacturers Ltd. After ICI exited business in Bangladesh, a former Chairman of ICI took over the company and renamed the company as Advanced Chemical Industries Ltd in May 1992.
Globally as well as in India, Dutch multinational Akzo Nobel bought over ICI and its manufacturing units in 2008.
In last September, Akzo revived the Dulux band in Bangladesh through ACI’s distribution network. “In the next 36 months, we hope to grab 5 per cent market share in Bangladesh. We are beginning with decorative paints. Later on, we would be looking for industrial paints markets to in Bangladesh,” Krishnaswamy said.
He said in the past three years, Akzo had invested ₹240 crore in adding new capacities in decorative and industrial paints.
Net profit zoomsThe company reported a Q1 (2014-15) net profit at ₹55 crore, saw a 59 per cent jump against the corresponding period. This, other than operational profits, was aided by treasury profits (MF investments matured).
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