JK Cement picks up controlling stake in Acro Paints

Through a subsidiary, JK Cement paid $1.530 million to purchase a 60% share in Acro Paints. Through JK Paints & Coatings Ltd., the acquisition was completed. According to the definitive agreement that the two parties struck between the two, the remaining 40% will be acquired over the following 12 months. The company said in a statement that the acquisition is a step towards fast-tracking JK Cement's entry into the paints business, expanding its product offerings, and potentially foraying into new markets. JK Cement will also gain access to the expanding market for construction chemicals, the company added. Acro Paints is a manufacturer of architectural and high-performance paints and coatings with two manufacturing sites located in Bhiwadi, Alwar, Rajasthan. With Acro having over 300 product SKUs, the acquisition adds robust manufacturing capabilities and thorough product formulations. Expansion plans The purchases serve as a key driver of growth, according to Raghavpat Singhania, managing director of JK Cement Ltd. Acro Paints is expanding its present capacity, which is slated to be finished in the second quarter of FY24, he stated. After the extension, Acro's capacity for decorative and textured paints will be 60,000 kilo litres, and its capacity for building chemicals will be 6,700 kilo litres. One of the largest manufacturers of wall putty in India is JK Cement, and the industry has a lot in common with the paint industry. Those in the know indicated that JK Cement made the strategic choice to purchase the financially sound company Acro, which had no debt and excellent profits, in order to capitalise on the advantages of its putty distribution network. In a recent report, Motilal Oswal stated that because Iran poses a threat to white cement imports, supplies to disorganised and paint players cannot be curtailed. 16–18% of Putty is made of white cement. The market share of the two dominant firms in the putty industry has decreased from 85% to 90% four years ago to 40% to 45% today, indicating increased competition. With the help of Acro's distribution network, JK Cement's 1,00,000 dealers and 1,500 distributors across all of India would be able to better serve clients in the area and expand its reach into new markets. According to Abneesh Roy, Executive Director, Institutional Equities, Nuvama, the acquisition will also provide an opportunity to foray into the growing vertical of construction chemical and waterproofing products, which has a current market size of over $50,000 million and is growing at a rate of over 10% per annum.