Why Syed Babar Ali should not buy Akzo Nobel

Syed Babar Ali wants to buy Akzo Nobel. When the news broke that the Dutch paint manufacturer was wrapping up its operations in Pakistan, many were alarmed by the departure of yet another multinational player from the Pakistani market. The exit comes hot on the heels of Procter & Gamble’s exit and similar decisions by Shell and others in recent years. The interest of the Packages Group in acquiring the paint company was a small silver lining.

The Packages Group, after all, is one the oldest and cleanest companies in Pakistan. Over the decades Syed Babar Ali has turned it into a massive conglomerate with an impeccable reputation for doing everything above board. 

That reputation is exactly why he should not touch Akzo Nobel with a ten-foot paint roller. 

You see, while many might be dismayed over the exit of another multinational from Pakistan, those in the paint business will tell you the exit was a long-time coming. And while the weight of economic stress and policy paralysis have added to the cracks in the paint industry, the bigger problem has been a swelling informal market in an industry that has increasingly become difficult to stay clean in.