National Paints revealed yesterday that it plans to set up three plants this year, one of them in Abu Dhabi, according to its chairman. The other two will be located in Tehran and Ahvaz (an industrial town at the Iran-Iraq border) and will jointly manufacture about 300 tonnes of paints per day and related products for the Iranian and Iraqi market.
"National Paints is setting up two plants in Iran and a new plant in Abu Dhabi. The Iranian plants will employ about 600 employees," Saleem F Sayegh, Chairman of the National Paints told Emirates Business.
The company said it is the largest paint manufacturer in the Middle East, with installed production capacity of more than 4,00,000 tonnes per year and annual sales of more than $1 billion (Dh36.7bn).
The firm is planning to capture about 30 per cent of the Iranian paint market, which currently has more than 100 paint manufacturers. Sayegh added that the group is going ahead with its regional expansion plans, which are not deterred by the current slowdown in the construction sector.
The company currently has manufacturing plants in the UAE, Jordan, Egypt, Qatar, Sudan, Oman, India, Palestine, Romania, Kyrgystan, Kazakhstan and Russia.
Speaking to this newspaper, Samer Saleem Sayegh, Regional Director, National Paints, said the group's Tehran plant will be operational within eight to ten months and will cover an area of 20,000 square metres. It will produce 100 tonnes of paints per day. The Ahvaz plant has a site of around 250,000 square metres and will manufacture paint raw materials, paint cans and other related products. It will manufacture 200 tonnes of paints per day. It will also produce about 100 tonnes per day of alkyd resin, precipitated calcium carbonate and polyester resin.
Proximity to Iraq
The Ahvaz plant is much bigger than the Tehran plant because it will help the company cater to the Iraqi market, which is currently served through the National Paints factory in Jordan.
"Ahvaz is only 80km from Basra in Iraq and the location is selected for logistical reasons. From Ahvaz, the company can send raw materials and products to other regional markets such as Iraq and Kuwait. It is also connected to the Shattel Al Arab river," said Samer. The initial investment in Iran would be about $30 million and the total investment would eventually be double.
"Iran is a market of 90 million people. In Tehran alone, the population is 19 million, which is a little less than the combined population of the UAE, Oman, Kuwait, Qatar, Bahrain, Lebanon and Jordan. It is like we get a market of all these countries under one roof," he said adding that the company has no immediate plans to start any factory in Iraq.
The Ahvaz plant will be completed in 18 months. "Our target is to achieve 30 per cent market share in Iran, which has about 100 major paint manufacturers. They have all the raw materials, but needed modern technology. There are about 50 petrochemical factories in Ahvaz, and there is sufficient supply of paint raw materials," Samer said the US sanctions will not affect the company's investment in paint manufacturing in Iran.
"Sanctions are for using American technology and not on manufacturing. European and Asian technology are already present in the Iranian paint manufacturing," he said.
The new factory in Abu Dhabi will produce 300 tonnes per day but Sayegh was not willing to reveal the investments into the factory.
"The Abu Dhabi factory logistical advantages as well. A container of raw material from Jebel Ali port to the Sharjah factory can also reach the Al Mussafah Industrial area of Abu Dhabi covering the same distance. The demand for paint has tripled in the past two years. We have got many major projects in Abu Dhabi including the Formula one race track," he added.
According to one report, the total paint consumption in Iran is estimated to be about 500,000 tonnes per year. Even though there are an estimated 400-600 paint and varnish producers in Iran, only 20-30 of that number are large or medium-sized manufacturers.
The industry's combined production capacity is about 400,000 tonnes per year, while production is considerably lower.
Meanwhile, National Paints yesterday launched six new products in a new line of Teflon paint products under licence from Du Pont.
National Paints have an exclusive right to manufacture surface protector paints in the UAE with non-exclusive rights in other GCC markets.
"This is the right time to launch such products," said the chairman.