Asian Paints Lid, India's largest paint company, recently acquired a controlling stake in SCIB Chemical SAE, one of the five largest paint manufacturers in Egypt.
Asian Paints entered into an agreement with the shareholders of SCIB to purchase 60 per cent of the paid-up capital of the company.
The investment amounts to approximately $5 million. The balance 40 per cent is held by the existing promoters.
"In line with our vision to expand our operations in the emerging markets, the Egyptian paint market was given high priority as it is a stable economy," said Ashwin Dani, vice chairman and managing director of Asian Paints.
"SCIB Chemical is an excellent vehicle to enter the market, as the company compliments Asian Paints in its operations and offers numerous opportunities to provide value to the Egyptian consumer.
"Asian Paints has been impressed with the brand equity of the company as well as the promoters," he added.
"We feel that there is great opportunity to build on this equity and thus increase market share of the company in the ensuing years.
Our effort will be to provide value-added products and services with the entire range of decorative coatings to the consumer."
Top executives at SCIB echoed Dani's thoughts.
"Considering the expertise of Asian Paints, we are confident that SCIB Chemical can derive major synergies from this association and will consolidate its position in the Egyptian paint market," said Ali Moussa, president of SCIB.
"We believe Asian Paints will add greater value to SCIB Chemical especially in the retail sales segment.
Asian Paints' wide product range, formulations, know-how and purchasing power will contribute to increase the overall profitability of the company."
The Egyptian paint market is estimated to be around $150 million.
The reform process that was initiated in the 1990s has aided the paint sector, which witnessed good growth during the '90s.
Asian Paints is trying to repeat its domestic success in global markets.
The company plans, for instance to tap emerging markets across the globe in an attempt to boost its growth.
It has entered into 13 new markets in the last four months.