Kansai Nerolac, one of the leading paints brands in India, has entered the adhesives and construction chemicals segment through a JV with Polygel Industries. Kansai Nerolac will have 60% stake in the new joint venture and rest will be held by Polygel. Polygel is engaged in the business of manufacturing and distribution of (i) adhesives, construction chemicals and sealants; (ii) organic titanates; (iii) cab poly oleofins catalysts; and (iv) poly carboxylate ether.
By virtue of the Joint Venture Agreement, a separate company will be formed to which the adhesives, construction chemicals and sealants business of Polygel would be transferred under a separate Business Transfer Agreement. Thus, Polygel’s existing adhesives business with a turnover of Rs75 crore along with a manufacturing facility would become a part of this JV.
While Polygel would bring-in product know-how and technology, KNPL would provide distribution reach. While the JV will help Kansai to enter new business segment, Polygel would benefit through increased reach beyond Western India where its business is currently concentrated.
The JV would launch products pan-India over the next year. Kansai has invested an initial amount of Rs12 crore in this JV.
It may be recalled here that a few years ago India’s largest decorative paints maker, Asian Paints, too had entered the adhesive business. At present, Indian adhesives market is dominated by one player, that is, Pidilite Industries who enjoys nearly 70% of the market share.