KLK is Asean's No.1 paint binders supplier

KUALA LUMPUR: Kuala Lumpur Kepong Bhd, the biggest shareholder in London Stock Exchange-listed Yule Catto & Co plc, has set its sights to become Asia's biggest paint binders supplier in the mid-term.

It is now southeast Asia's largest supplier of paint binders, following the British firm's £10 million (RM49.4 million) purchase of Quality Polymer Sdn Bhd from Nippon Paint Malaysia. Quality Polymer is now placed under Yule Catto's 70 per cent unit Revertex Malaysia Sdn Bhd. Yule Catto is also the owner of the Synthomer Group, of which Revertex is a key part.

Paint is essentially made up of pigments, binders and solvents. A pigment gives the paint its colour and is mixed into a solvent. The binder, which form the bulk of the paint, binds the pigment to the solvent to form a very thick liquid so that it can properly coat a surface.

In an interview with Business Times here, Synthomer Asia managing director Dr Brendan Catlow said: "The Quality Polymer purchase is just the beginning of our plans to expand across Asia. 

"We aim to have more than 50 per cent of our sales from emerging markets by 2015. The only way to achieve this target is via major investments and acquisitions," he said.

On the size of Synthomer's war chest, Catlow declined to specify but said: "We have a very strong balance sheet."

On details of the recently-concluded Quality Polymer purchase, Catlow said: "We've been in talks with Nippon Paint for over a year before we finally agreed on the price. This acquisition is all about growth, not cost reduction. There's no voluntary separation scheme." Quality Polymer, which employs 30 staff at its Pasir Gudang factory in Johor, chalks up an annual sales of some £10 million.

With the addition of Quality Polymer's 15,000-tonne facility, Catlow said Synthomer's paint binders capacity in Asia now totals over 65,000 tonnes a year. "Our binders are used in eight of top 10 global paint brands. In view of the increasing demand for paint binders in southeast Asia, we're planning to set aside more investments to raise capacity at the Pasir Gudang facility. This will be carried out next year," he said.

According to the World Paint & Coatings Industry Association, the 10 most popular paint brands are AkzoNobel, PPG Industries Inc, Sherwin-Williams Co, DuPont Coatings & Color Technologies Group, ICI Paints, BASF Coatings AG, RPM International Inc, SigmaKalon Group BV, SACAL, Valspar Corp, and Nippon Paint Co.

Synthomer is not a newcomer to Malaysia, having been in business here for 75 years.

Apart from making paint binders, it is also the world's number one supplier of nitrile latex, catering to the needs of the top 10 rubber glovemakers in southeast Asia.

Describing Synthomer's business, Catlow said: "Our polymers are used in a wide range of industries to create and enhance everyday consumer products. "Whether you're reading a book, opening a pack of breakfast cereals, painting your kitchen, labelling an envelope, laying a carpet, tiling a bathroom, using hairspray or simply driving your car, you could be using a product that has been improved by our scientists," he added.

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