The automotive paint market is very fragmented in Nepal.

Sharad Malhotra
Senior Vice President, Nipsea Group

Sharad Malhotra is the Senior Vice President of Nipsea Group. Malhotra is a strategic business leader with multi-dimensional experience across India, China, South Asia, South East Asia, Middle East and Australia. He started India business operations in 2011 and expanded to US$ 27 million revenue in 2017 taking the business to the top five position in the market. He founded Nipsea Group Automotive Refinishes in 2014 and established R&D capability, product lines, technical support and supply chains. Further, he expanded business to 22 markets from 11 by end 2017. Malhotra seized control of the Thailand business in 2015 and guided it to market leadership while expanding profitability three times. He has also turned around the traditional markets of Philippines, Sri Lanka and Pakistan.

Nippon Paint India is a leading producer of high-quality paints and coatings for automotive refinish, industrial and decorative sectors. Nippon Paint India is part of the Nipsea Group which together with Nippon Paint of Japan, forms the largest coatings group in Asia Pacific and the fourth largest in the world in terms of revenue.

During the launch of Nippon Paints in the capital, Sharad Malhotra in an interview with B360’s Ankita Jain talks about the scope of automotive paint market in the country. Excerpts:

Why did Nippon Paints decide to enter Nepal?

In 2014, a new group was set up within the company with an aim to focus on the expansion of the automotive business in different parts of Asia. I was appointed as the head of that group and it was post 2014 that we started expanding to countries like Sri Lanka, Vietnam, Singapore, Indonesia, Middle East, etc. Despite the centre of business being India, we actually missed the opportunity in our neighbouring country, Nepal. I believe it’s better late than never kind of situation. We always wanted to be in Nepal but we never put in our energies here. Last year, we decided to conduct a market research in Nepal to identify partners and based on that we are here today.

The company has launched the N-power series in the Nepali market. Will the green products of Nippon Paints also be made available here?

Those products which we call greener have very less percentage of Volatile Organic Compound content. VOCs are harmful for humans and the environment. The other line is water borne products. Currently these products aren’t available in the Nepal market. We will be introducing them in the coming years. We are introducing budget line under the N-power series. It has been launched globally for the first time in the Nepal market. Through the launch we want to see the market upgrade from old fashioned technology to newer aged technology.

What is the USP of Nippon Paints?

We like to tailor make products for every country depending on their needs. The N-power series is made keeping in mind the price factor for the Nepali market. We are offering a premium product at an affordable price. The automotive range offered here is a great value product.

What percentage of the market share are you targeting?

The automotive paint market is very fragmented in Nepal. The study says the market lies between 1.5 billion but we are sure it is much bigger. Assuming this to be our focus, we are looking at 20% market share and grow gradually. Over the period of three years we are sure we will be a dominant player in the automotive paint market in Nepal. Hence, we are not here to be a player rather we want to be the market leader.

Nippon Paints is recognized for their local manufacturing unit. Any plans for a setup in Nepal?

Currently, we are feeding the Nepal market from India. We have a manufacturing unit in India. As the market response to our products here grows, we will definitely consider having a setup in the country too though it is not in our immediate plans. As a company, we have more than 67 manufacturing units in different parts of the world.

What is the N-power series target audience and market?

We have been doing market research in Nepal since last July. We wanted to evaluate the exact needs and requirements of the market. Over this period we analysed that the market needs upgradation. As part of our overall marketing strategy, we would like to bring in the state of the art technology with whatever global innovations we have. The best quality products and be the end to end solution provider. Our primary target audiences are garage owners, importers, distributors, etc. Further the products will be available across 600 body and paint shops. There are also plans to on-board 50 new dealers, with at least 10 focusing on Nippon’s core superior colour mixing system by the year-end. We want to build a community and bring them on a common platform offering the technology and products.

We aren’t just looking to doing business in the market, we also want to invest in the market. In the coming years, we have plan to establish a training centre so that people do not have to travel outside of the country for training. We want to select certain paint technicians from Nepal and bring them on a wider platform. To represent Nepal on the world map is something we would strive for.

In India and globally, we have authorised tie ups with Tata Motors, Ford, Mahindra First Choice and Nissan. We are also the OEM paint suppliers of Toyota Japan. In Nepal we have done successful trials with Hyundai and Mahindra. Probably by year end we will enter the two wheeler segment as well.

Globally, decorative segment contributes 50 % of our total turnover and another 23-25% comes from automotive OEM. In Nepal, automotive is just the first step, there will be further additions to it. We will be entering into wood coatings, industrial coatings and the cartage segment.