Dutch global paints and coatings company, AkzoNobel has cancelled its licensee agreement with Sadolin Paints East Africa which is currently operating as Kansai Plascon.
The Sadolin brand is owned by AkzoNobel and was previously manufactured through a licensee agreement with Sadolin Paints East Africa Limited in the region.
AkzoNobel has made the announcement over what it deems as “numerous breaches” by Kansai Plascon, the new owner of Sadolin Paints East Africa.
Essentially, this means that Kansai Plascon who acquired the Sadolin East Africa paints brand will no longer trade, manufacture, sell and market Sadolin paints as they were earlier contractually obligated to do until January 2018.
Mr Johann Smidt, the managing director for AkzoNobel Decorative Paints in sub-Sahara Africa, said the company has made multiple attempts to engage Kansai Plascon to ensure continued supply of the Sadolin brand on the market following acquisition of previous licensee by Kansai Plascon. However, efforts have yielded no fruit.
“In accordance with the contractual agreement, Kansai Plascon was obliged to sell, market and advertise the Sadolin brand until the end of January 2018. This responsibility has not been upheld and actions by Kansai Plascon indicate deliberate breaches of the contract as evident in the over-labelling of Sadolin packs with Plascon labels.
“This behaviour, amongst other activities, has left us with no choice but to cancel the agreement with immediate effect to protect our Sadolin brand and ensure supply to the Ugandan people,” Mr Smidt said in a press statement released on yesterday.
Earlier last month, AkzoNobel won a court battle against Sadolin Uganda Limited (now Kansai Plascon) after Sadolin Uganda Limited filed a court injunction to bar AkzoNobel from directly or indirectly soliciting or selling any Sadolin paint products in Uganda.
The matter was set aside by the courts allowing AkzoNobel to engage freely with the market and restore supply of products manufactured under the Sadolin brand.
Kansai Plascon managing director Chris Nugent says he is aware of the development. “We dispute what they are doing and there is a court case that was supposed to be heard yesterday (Tuesday) but will be heard in the near future to see whether they behaved legally or not,” Mr Nugent told Daily Monitor yesterday.
CREDIT: DAILY MONITOR