Sika: “Our target is to establish 105 national subsidiaries by 2020”
By acquiring two businesses in Turkey and the Czech Republic and establishing a subsidiary in El Salvador – its 99th worldwide – Sika continues to expand its footprint in emerging regions. Dominik Slappnig of Sika about the expansions and the potential in the markets.
Please explain why you decided to expand in these three countries for your growth strategy?
Dominik Slappnig: Salvador may be the smallest Central American country but is has the highest population density and therefore a high demand for infrastructure. This offers a promising outlook for the construction industry, and an opportunity for Sika to benefit from the strong market position we have already established through our supply of products from Guatemala. The Czech market is also growing and our acquisition of KVK allows us to strengthen our production platform – meaning we can offer a full range of products on a local level with local expertise and technological support. Countries like Turkey also give us opportunity for further growth in the wider region, for example the acquisition of ABC Sealants will also function as a distribution and production hub for the Middle East and Africa.
How do you rate the markets in Middle East and Africa for sealants and adhesives?
Slappnig: In the Middle East and Africa the largest volume of sales in construction currently comes from concrete and waterproofing materials. Our acquisition of ABC Sealants will enable us to build up the sealants and adhesives market, and gives us an opportunity to offer solutions that meet the needs of the customers.
Dominik Slappnig,
Head of Corporate Communications and Investor Relations, Sika Group
Could you please describe the market and potential of the Central American construction industry?
Slappnig: In Latin America in general, Sika has witnessed strong growth over the past few years, and the prospects for the building sector continue to look good despite political and economic uncertainties in some individual countries. It’s anticipated that more than 80% of the population will live in cities by 2025 and we see this development driving the construction of housing, utilities, and transport systems. Major infrastructure projects and private-sector investment are also bolstering building activity in Mexico, generated by the needs of its 120 million inhabitants. Mexico City is one of the largest cities in the world and the new airport expansion there is estimated at the equivalent of more than EUR 4 billion.
The newly established national subsidiary in El Salvador is your 99th. Are there already any plans regarding the 100th subsidiary?
Slappnig: Yes, there is already much internal competition about which regional Head will be able to claim the 100th country. We hope to achieve this before the end of 2017, but of course our global expansion will not stop there. Our target is to establish 105 national subsidiaries by 2020.
This interview is part of a longer article on Sika's expansion which is available in the October issue of the European Coatings Journal.
