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Kansai Nerolac plans Rs 400 capacity ramp up

Press Trust of India  |  New Delhi 

Kansai Nerolac Paints (KNP) today said it will invest Rs 400 crore over the next three years to increase its paint manufacturing capacity by 40 per cent to 2.8 lakh tonnes per annum.
KNP, in which Japan's largest paint maker Kansai Paint Company has 70 per cent stake, has five manufacturing plants - at Housr in Tamil Nadu, Jainpur in Uttar Pradesh, Perungudi in Tamil Nadu, Lote in Maharashtra and Bawal in Haryana - with a total capacity of 2 lakh tonnes per annum.

"We will invest Rs 400 crore over the next three years to increase the capacity to 2.8 lakh tonnes per annum. Out of the total investment, Rs 250 crore will be spent to introduce the industrial line in Hosur plant, which went on production last week," KNP's Managing Director H M Bharuka told PTI.
An additional Rs 150 crore would go towards increasing capacity in four other plants, he said, adding that KNP does not have any plan to set up a new plant now.
"However, if we take a decision to set up a new plant, it will come up somewhere in the Eastern part of the country since we have presence in other parts," Bharuka said.
Bharuka said that the company has sufficient cash surplus to take care of the funding requirements and as such, there is no plan to raise any debt or equity.
The Indian paint industry is pegged at Rs 17,000 crore and is growing by 8-10 per cent for the last few years. Around 60 per cent of the market belongs to the organised sector and the remaining is held by unorganised players, who are mainly small in size.

KNP is the market leader in the industrial segment in the country's organised paint industry with 42 per cent share and a leading player in the decorative segment with 13 per cent share.
At present, 55 per cent of its revenue comes from the decorative segment and the rest from the industrial segment.
Bharuka said that KNP's sales grew by around 15 per cent in the first nine-months of the current fiscal as compared to the same period last fiscal and hoped that the momentum would be maintained in the last quarter of the current fiscal too.
KNP had recorded Rs 1,685 crore sales in 2008-09 fiscal.
Asked whether the company is looking for acquisition, he said, "Not really. But if any offer comes to us, we will look at it".

First Published: Sun, March 07 2010. 15:54 IST