Paint manufacturer AkzoNobel India plans to set up a plant in Bangladesh with local conglomerate ACI Formulations Limited in next two to three years.
The plant will produce Dulux brand – a product of decorative paint now being marketed in Bangladesh by ACI Formulation, a subsidiary of conglomerate ACI Ltd.
Executive director of consumer brands, ACI Ltd, Sayed Alamgir said: “We are working on manufacturing the Akzo brands in Bangladesh.”
Initially, AkzoNobel will use the existing facility of the ACI Formulations to produce its brands on tolling arrangement, he said.
“If it is successful, the company might go for establishing a manufacturing unit in Bangladesh,” he said.
ACI Formulations currently distributes the Dulux brand in the country in the last seven to eight months.
The company is now into crop protection chemicals, mosquito pesticides and household chemicals had its lineage in erstwhile ICI Bangladesh Manufacturers Ltd.
After ICI exiting business in Bangladesh, a former Chairman of ICI took over the company and renamed it as Advanced Chemical Industries (ACI) Ltd in May 1992.
Earlier, AkzoNobel, a leading global paints and a major producer of specialty chemicals, had entered into a tolling agreement with ACI to supply the raw materials and formulations to be manufactured by the proposed Bangladesh entity.
AkzoNobel India Managing Director Jayakumar Krishnaswamy told Indian media on Monday that Bangladesh market was growing at a CAGR (compound annual growth rate) of 8% to 9% during last three to four years.
He said ACI Formulation Ltd has a capacity to produce around 2m litres of paints. “At 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 seven to eight million litres at a later stage.”
In September, Akzo revived the Dulux brand in Bangladesh through ACI’s distribution network. “In the next 36 months, we hope to grab 5% market share in Bangladesh. We are beginning with decorative paints. Later on, we would be looking for industrial paints markets too in Bangladesh,” Krishnaswamy said.
He said the company had spent Rs240 crore in last three years for setting up a new unit in Gwalior and in other places like Bangalore and Hyderabad of India.
