Follow us on Twitter Follow us on LinkedIn Like us on Facebook Follow us on Instagram Visit the TPC Store
Search the site




Coatings Industry News

Main News Page

Coatings Maker Buys Into Middle East

Wednesday, August 31, 2016

Comment | More

A Japanese paint company has announced its intentions to buy a Saudi Arabian protective coatings firm as a step to gain access to the Persian Gulf area’s energy and infrastructure industries.

Osaka-based Kansai Paint Co. Ltd. confirmed in a statement Tuesday (Aug. 30) that its Kansai Paint Middle East (KPME) division and subsidiary Kansai Paint Saudi Ltd. (KP Saudi) will acquire the stock of the Saudi Industrial Paint Company (SIPCO).

oil refinery
© / tuachanwatthana

Kansai Paint Co. Ltd. has announced  plans to acquire the Saudi Industrial Paint Company (SIPCO), which specializes in anticorrosion coatings, with the transaction expected to close by the end of 2016.

News of the proposed purchase was first reported by Bloomberg on Saturday (Aug. 28). The deal is expected to close in the fourth quarter, Kansai Paints President Hiroshi Ishino said in the business news site’s report.

Terms are still being negotiated, but Nikkei Asian Review anticipates the price to buy all outstanding shares of SIPCO will be in the hundreds of millions of yen.

Access to Oil Companies

SIPCO, located in Dammam, has a 34-year history as a protective coatings supplier and is said to be one of the largest Saudi Arabian-owned manufacturers of high-quality paints, sealants, adhesives and construction chemicals in the country.

Kansai’s interest in the company appears to be its manufacture of anticorrosion coatings for pipelines, tanks and other equipment, as well as its favorable record as a supplier to oil companies such as Saudi Aramco, according to its announcement.

With SIPCO’s anticipated procurement of government projects and development at major oil companies, “We believe acquisition of these stocks serve to accelerates not only anticorrosion but also construction businesses,” the company stated.

Moreover, SIPCO is said to be expanding its portfolio to include products such as architectural coatings, which will help the company grow its business further in the region.

oil refinery
© / thitivong

By acquiring SIPCO, Kansai will acquire a base of operations in Saudi Arabia from which to supply protective coatings to the oil and gas industry, according to reports.

“With few major U.S. or European peers operating in the country, Kansai Paint spotted an opportunity for expansion,” Nikkei wrote.

Expanding Markets, Sales

Kansai’s largest customer base is currently in the Japanese auto industry, but the company is looking to grow its decorative paints and industrial coatings sales outside its home market, Ishino told Bloomberg.

Although the Arab states that make up the Gulf Cooperation Council (GCC)—a political and economic alliance of six Middle Eastern countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates)—have felt the impact of falling oil prices, Qatar, Kuwait and the United Arab Emirates are reportedly upgrading infrastructure and many petrochemical plants are said to be undergoing large-scale renovations.

India and the GCC “are the fastest-growing regions for the next five years, and we are hoping to expand 10 percent per year in these markets,” Ishino said.

By purchasing SIPCO, Kansai will acquire a base of operations in Saudi Arabia from which to supply protective coatings to the oil and gas industry, Bloomberg added.

Per Kansai’s description of the stock acquisition, SIPCO shows approximate sales of ¥600,000,000 (about $5.8 million).

The company expects to see sales of ¥4,500,000,000 (approximately $43.7 million) and a profit of ¥600,000,000 ($5.8 million) by 2019.

Its construction paint business will commence after completion of the acquisition, and those predicted sales figures include construction paint, it explained.

KP Saudi will own 95 percent of the business, with KPME holding the remaining 5 percent.


Tagged categories: Acquisitions; Business matters; Coatings manufacturers; Corrosion control coatings; Kansai Paint; Oil and Gas; Saudi Aramco; SIPCO

Comment Join the Conversation:

Sign in to our community to add your comments.

Jotun Paints Inc.
Jotun Jotachar 1709
Mesh-free passive fire protection epoxy designed to protect against hydrocarbon pool fire scenarios for up to four hours as defined in the ANSI/UL1709 standard.

Carboline Company
New product: Carbozinc® 608 HB
Introducing a new high build zinc-rich primer that can save you time and money by eliminating the epoxy intermediate coat!

Tarps manufacturing, Inc.
QUALITY MADE IN AMERICA —Available near you!
CLICK to get a behind-the-scenes look at how Tarps Manufacturing makes the highest-quality tarps right here in the USA — available nationwide.

SAFE Systems, Inc.
Custom blast rooms
by SAFE Systems
Don't waste time and money "making do" with a "standard" design. Let us work with you to design and build the system that best fits your requirements.
Call 1-800-634-7278

Mitsubishi Gas Chemical America
Performance Amine 1,3-BAC
A highly reactive cycloaliphatic diamine offering superior performance. Reasonable cost and curing efficacy makes it suitable for all types of epoxy resin applications.

HoldTight Solutions Inc.
Our HoldTight®102 salt remover & flash rust
preventer prevents flash
rust by removing surface contaminants. Contact us
for your nearest distributor.
(800) 319.8802

ARC / A.W. Chesterton Company
Superior Impact & Wear Resistant Lining
100% solids, impact resistant, ceramic reinforced, epoxy/urethane hybrid lining for severe abrasive wear and impact resistance.

CHLOR*RID International Inc.
Companies that invest in corrosion control use CHLOR RID products
  • Soluble salt removal liquid
  • Test kits to verify contamination levels
  • Surface passivation to hold the blast
INFO@CHLOR-RID.COM 800.422.3217

ABKaelin, LLC
Programs/Training/Monitoring for Silica, Lead, Noise, Beryllium, Hexavalent Chromium, Cadmium, Hazardous Waste*PM10 & TSP-Lead Ambient Air Monitoring*SSPC C3/C5

US Minerals
Hit Harder. Clean Faster.
Black Diamond abrasive products are the toughest, most effective blasting media and supply the superior power you need to get any job done.


Technology Publishing Co., 1501 Reedsdale Street, Suite 2008, Pittsburgh, PA 15233

TEL 1-412-431-8300  • FAX  1-412-431-5428  •  EMAIL

The Technology Publishing Network

Durability + Design PaintSquare the Journal of Protective Coatings & Linings Paint BidTracker

EXPLORE:      JPCL   |   PaintSquare News   |   Interact   |   Buying Guides   |   Webinars   |   Resources   |   Classifieds
REGISTER AND SUBSCRIBE:      Free PaintSquare Registration   |   Subscribe to JPCL   |   Subscribe to PaintSquare News
MORE:      About   |   Privacy policy   |   Terms & conditions   |   Site Map   |   Search   |   Contact Us