OER gets face2face with Munir M. Khan, GM of Sadolin Paints, on the paints leader's new strategic initiatives and the road map ahead
Tell us something about your career profile
I'm basically from India. I did my engineering from REC (Surathkal) and PGDM from IIM-Kolkata. Thereafter, I joined Asian Paints and within nine years, I was made the youngest General Manager in the company's history. After spending 13 years in various functions, including retail and industrial sales, factory management, personnel management, systems management and project management etc., I moved to Sadolin Paints (Oman) in 1984. I liked the company and the country so much that I have spent 21 years here.
What's the secret of Sadolin's leadership in paints business in Oman?
Sadolin Paints (Oman) Ltd., was the first paint company to start production in 1977 and continues to be the number one paints company in Oman. We enjoy a market share of 40 per cent within Oman and 35-40 per cent of our business comes through exports. Our company's success is based on our strategy of focusing primarily on - high quality through best technology; customer focus orientation at all levels and following the principle of continuous improvement (Japanese strategy called Kaizen, which means continuous improvement). This is the reason why we are the preferred partners in Oman for any international paint's giant that eyes at GCC market for business expansion.
We are constantly endeavouring to partner with the best companies in the world to deliver world-class products to the retail and industrial customers in Oman and regional markets.
Which are your major strategic international partners?
We are perhaps the only company of its kind in the region with access to the best multiple international technologies. For decorative coatings and wood protection, which comprises a major chunk of our business, we have a licensing arrangement with Sadolin Paints, Denmark, a 225-year-old company, which is now part of Akzo Nobel. For furniture lacquers also, we have licensing arrangements with M/s.Akzo Nobel, Italy - world leaders in coating industry. We have a technological partnership with Stoncor, USA, for protective coatings. We are the distributors of PPG Automotive Refinishes, the world leaders in refinishes for Oman.
In August this year, we have formed an alliance for manufacturing and distribution with Tyco Adhesives Corrosion protection Group to produce Powercrete liquid epoxy coatings, which are used for corrosion prevention of oil, gas, water and wastewater pipelines.
We are always trying to improvise so that our company remains a world-class competitive player, which is well respected and envied by competitors. Perhaps that is the reason why most of these international giants have preferred to join hands with us ahead of many other companies in the GCC region.
What kind of manufacturing and distribution infrastructure do you have?
We have a modern manufacturing plant and laboratory at Rusayl Industrial Estate. We have the capacity to produce 15-million litres of paints and adhesives. We have built the largest network of dealers and established a wide network of Colour Points in the Sultanate. We have branches with depot facilities at Dubai, Bahrain and Qatar. We have distributors in Kuwait, Saudi Arabia and Yemen also.
Which are the major countries where you export your products to?
We export mainly to the GCC countries. Plus, we export comparatively smaller quantities to countries like Syria, India and Sudan as well. We are exploring markets outside the GCC region to further expand our business.
Setting up of a subsidiary in Kochi, India, is part of this expansion game plan. We started with wood products in India but recently we have launched our decorative paints in that market also. The initiative has been quite successful and we are definitely going to build on this base.
With infrastructure development in full swing in the GCC region, the paints business must be growing at a faster rate?
Though different product categories are growing at different rates but overall, the paints business is on the upswing. Our company is growing at more than 10 per cent rate average in the last 20 years. The unexpected rise in oil prices in the international market will give further momentum to our business. The launch of massive development projects in most of the GCC countries has definitely given us an opportunity to roll out a wide range of products to meet the varied demands of the industry.
To benefit from the economic boom in the GCC region, a host of international paints companies are vying with each other to enter this market by forming alliances with top GCC based companies. This kind of an opportunity didn't exist a couple of years back.
So what is the strategy of your company to maximize the returns in the boom time?
The GCC market is mainly guided by the sentiments and fluctuations in the oil market prices. But our focus is to grow irrespective of the developments in the oil market. If one sector is not doing well, we try to identify opportunities in other sectors, which are growing at a faster rate. Originally, when we had started, we were manufacturing and distributing decorative paints only, that too a limited variety. Today we have a complete range of decorative coatings, presence in wood protection products, furniture lacquers, tank linings, protective coatings and adhesives etc. We keep analyzing the developments in different industry sectors to anticipate the fluctuation in the demand for our products. We have an excellent range of products with application in a wide range of industries.
How has the paints industry shaped up in Oman in the last few years?
It has come a long way. At one point of time, we were the only local manufacturing company in this business. In 1985, two more companies joined in. Another three players moved in sometime in 1997-98. So today there are six local players in this market. The market is becoming more competitive and tough not just in Oman but MENA (Middle East North Africa) as well. All the countries in MENA have got multiple paint-manufacturing units with excess production capacities. Exports business in the paint industry has always been very difficult. Thanks to our wide range of quality niche products, we are able to export 35-40 per cent of our production.
Where do you see your company and the market moving in the next three years?
We would like to continue to maintain our leadership and in fact increase the gap between us and the other players in the market. In the long term, it is difficult to predict the growth trend, as this market is very sensitive to oil prices. There is no steady growth on year on year basis as the paints market fluctuates with oil price changes and the resultant construction activity. One year it could go up by 15 per cent and next year it could go down by 10 per cent also. However, for next three years, oil prices are expected to be high, so the immediate future is looking very bright.
What steps are being taken by your company to meet environment regulations?
We firmly believe in maintaining our environment and have ensured strict processes and controls to meet the environment protection laws. Our partnerships with leading international companies provide us access to the most modern technologies, which meet the stringent laws existing in Europe and America. We find that Denmark is most stringent on environment and we at Sadolin are largely influenced by the parent company in this regard.
We have been trendsetters on the social responsibility front in Oman. We were the first paint company in the Middle East to get both ISO9000 and 14001 certifications. Many people advised us not to incur expenses by going for ISO certifications but we went ahead to ensure best business practices as per the international norms. Look at the benefits today.
In fact, in July, we have already been audited by DNV for OHSAS 18001 (1999) standard and recommended for certification. Once again, we are the first paint company in the Middle East to be so certified. I might add that M/s.Tyco Adhesives have joined hands with us due to our progressive outlook and excellent professional organizational team.
Tyco's Powercrete PW is an ANSI/ NSF certified product - meant for potable water pipelines. NSF approval is required not only for the formulation but also for the site where it is manufactured. We have therefore, been already audited by NSF international and recommended for certification in August.
© Oman Economic Review 2005
