BUSINESS: Fight over Sadolin

As all this goes on, Kansai Plascon, appears to be playing a very well-orchestrated market takeover game but they are keeping their moves secret.

When contacted, Kansai Plascon Managing Director in Uganda, Chris Nugent, told The Independent that he cannot comment on the matter as he is out of the country.

So far, he has only spoken to the Daily Monitor, a local daily and even then stopped merely at acknowledging that there is a fight raging but the matter is in court for redress.

“We dispute what they are doing and there is a court case that was supposed to be heard,” he said. Regarding the demands and actions of AkzoNobel, he said the court will determine “whether they behaved legally or not.”

Kansai Plascon appears to have either deliberately or inadvertently waded into a business brand name dispute between Sadolin Uganda and AkzoNobel.

Last July, Sadolin Uganda filed an injunction in the commercial court against AkzoNobel to stop them from terminating a deal it had with Akzo Nobel saying the move could hurt their business.

It is not clear whether Sadolin Uganda was in talks with Kansai Plascon at the time and whether that sparked Akzo Nobel’s move against Sadolin Uganda. It is also possible Sadolin Uganda reached out to Kansai Plascon after relation with Akzo Nobel soured.

In any case, in August, AkzoNobel won the court battle against the licensee paving way for it to engage freely with the market to ensure that there’s supply of Sadolin brand whose fate hangs in a balance.

Kansai Plascon has already announced plans to introduce new products, including an anti-mosquito paint and one that is more washable and fire resistant.

It has also added that it plans to invest in new technologies into the US$10 million-plant at the Kampala Industrial and Business Park, Namamve, enabling it produce high quality paint at an affordable price. Kansai Plascon is already proclaiming that it command 60% market share in Uganda. AkzoNobel and any new partner have a tough battle ahead to at least match that rhetoric.

An almost similar case is playing out in Kenya. The difference appears to be that Sadolin Kenya lost the right use the Sadolin name when Akzo Nobel cut them off.

Akzo Nobel, which initially gave a one year notice to Sadolin Paints East Africa to an end on December 2019, moved it closer to on February 1, 2018. Akzo Nobel also announced it would start manufacturing the Sadolin products in Kenya.

Akzo Nobel is said to be working with ICI South Africa PTY, its South African subsidiary, to manufacture products in Kenya as Akzo Nobel Kenya, a new company.

This led Sadolin Paints East Africa Limited to sue Akzo Nobel seeking court to block it from soliciting for business from Sadolin clients in Kenya.

Under the deal with Akzo Nobel, Sadolin Paints East Africa Limited had right to manufacture and sell products with the trade name in Kenya, Uganda, Rwanda, Tanzania, Zanzibar, Burundi, South Sudan, Ethiopia, Democratic Republic of Congo (excluding Kinshasa and Lubumbashi), Somalia and Djibouti.

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