Asian Paints Plans Rs. 4,000-crore Capacity Expansion This Fiscal

Asian Paints Ltd. is embarking on its largest capacity expansion this fiscal year, investing Rs. 4,000-crore at its Visakhapatnam and Mysuru facilities to add 1.1 million kilolitres (kl) to its present output of paints.

The company is setting up a plant with 5-lakh kl per annum capacity at Visakhapatnam at an investment of Rs. 1,785-crore and a 6-lakh kl plant at Mysuru pumping in Rs. 2,300-crore.

“We are in the midst of our largest capacity expansion. In the first phase, two mega plants with initial capacities of 3,00,000 kl per annum each of water-based paints would be commissioned at Mysuru and Visakhapatnam in FY19,” Asian Paints MD & CEO, Mr. K.B.S. Anand said in the company’s annual report.

Asian Paints, which is the domestic market leader, operates in 16 countries and has 25 manufacturing facilities globally, catering to consumers in over 60 countries.

Its industrial coatings business was badly affected in the second half of FY18 due to GST as well rising input costs. But with the launch of industrial tinting machines in the dealer networks, and the success of its direct-to metal coatings, it could not only retain market share, but increase it in the second half of FY18, Mr. Anand said.

In the automotive paints segment, the company added Ford and Hyundai during the year. It could also gain market share in the two-wheeler space.

International business

However, Mr. Anand said the international business did not perform well. While a weak economy and a highly deflated currency hit its Egyptian operations, Ethiopia and Sri Lanka also did not do well. But higher sales in Nepal, Oman and Bahrain could contain some the impact of the poor show by the other markets. He said the greenfield operations in Indonesia as well as acquisition of Causeway Paints in Sri Lanka have increased its global revenue. Having completely existed the low growth Caribbean markets, Asian Paints is now focusing on expanding its portfolio into the emerging markets of Asia and Africa, the company’s Chairman, Mr. Ashwin Choksi, said.