The Managing Director of CAP Plc, David Wright, has disclosed that the post-merger entity of Chemical Allied Products Plc and Portland Paints and Products Nigeria Plc will become the largest player in the Nigerian paints market by market share.
This statement was made by Wright, and subsequently verified by the Managing Director of Portland Paints, Bolarin Okunowo, at the Facts Behind the Merger and Digital CGC for CAP Plc and Portland Paints Plc, organized by the Nigerian Stock Exchange.
Facts behind the merger
- In a bid to create an overview of the merging entities, CAP plc according to Wright is the 2nd largest player in the Nigerian Paints and Decorative market, with an estimated market share of 11.4%.
- He stated that the company, despite operating in a highly fragmented industry was able to generate a revenue of N8.4 billion in 2019.
- Wright noted that CAP is the most capitalized Paints and Decorative Company listed on the Nigerian Stock Exchange, as of February 1st 2020, the company has a market capitalization of over N14 billion.
- The Managing Director of Portland Paints, Bolarin Okunowo, on the other hand, disclosed that Portland Paints is the fourth-largest player in the Nigerian Paints and Decorative market, with an estimated market share of 3.5%, and was able to generate N2.6 billion in revenue in 2019.
- She added that the company stands on NSE as the 2nd most capitalized Paints and Decorative Company, with a market capitalization of over N2.78 billion as of February 1st 2020.
About the companies
CAP plays within the premium and standard segments of the Paints, Decorative and Coatings market, with flagship brands such as Dulux positioned in the premium segment and Caplux in the standard segment respectively.
Portland Paints, on the other hand, leverages the benefits embedded in the construction and oil & gas industries, with robust productive offerings, which cut across decorative, industrial and marine/protective coatings segments.
The flagship brand of the company, Sandtex, is renowned for its exceptional quality for residential, commercial and industrial buildings.
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On the flip side, the marine and protective coatings offerings of the company, are marketed under the Hempel brand, a leading global brand that delivers the highest quality protection for valuable marine, oil and gas and heavy metal assets.
What to expect from the post-merger entity, “Enlarged CAP“
- The post-merger entity of CAP and PortPaints, “Enlarged CAP” is expected to dominate the Nigerian Market as the largest player in the paints and decorative industry.
- The Enlarged CAP will float an enlarged product portfolio with strong brands, and a rich product mix of CAP and PortPaints in the standard, premium, industrial and marine/protective segments.
- The merger will bring together a formidable product portfolio, leveraging the strength of powerful brands like Dulux, Sandtex, Caplux and Hempel.
- This diversified product range will span through the decorative and marine segments, this diversity in product range will help to create a well-diversified entity, with the broadest distribution channels and retail footprint in Nigeria.
- The broad brand portfolio, expanded products offering, broad distribution capabilities and the benefits from internal economies owing to large scale operations will drive in more value, and this will lead to an increase in revenue and profits.
- The operational and administrative efficiencies which will be unlocked with this merger, will help to create more value for shareholders of the company.
What you should know
- CAP and Portland Paint currently rank number 2 and 4 respectively in the Nigerian Paints and Decorative market. The completion of the merger will create the largest player in the Nigerian Paints and Decorative market by market share, with a combined estimated market share of 14.9%.
- The product portfolio of the company will cut across the Decorative, Industrial, Marine and Protective segments, with 26 product offerings in total.
- These product offerings as implied by the management will be distributed across 91 stores across 32 states in the country, as the enlarged entity will leverage the benefits of a wider distribution network.