Aiming to grab a major slice of the growing paint industry in India, Kansai Nerolac, the second largest player in the country, is investing Rs 180 crore for the year 2008-09, with plans of setting up new plants as well expanding capacities. The company has earmarked about Rs 50 crore for its marketing and advertisement expenditure. The Rs 11,600-crore Indian paint industry is witnessing a 14% annual growth, while the decorative paint sales revenues stand at Rs 6,825 crore with a growth rate of 18%. The industrial paint business is seeing a mere 4% growth at Rs 1,775 crore. Out of the total decorative paint market, growth driven by emulsions is in excess of 25%.
HM Barukha, managing director, Kansai Nerolac, said, “We are to tap the growing decorative market, especially the emulsion market, which is witnessing higher growth. The growth in housing, construction, and disposable income drive the future business in the Indian paint industry.” However, he also raised concerns over the increasing interest rates in the automobile as well as housing industry. “There are concerns over rising crude oil prices and increasing interest rates. But the market is upbeat as far as growth is concerned.”
The company’s brownfield facility coming up at Lote, Maharashtra for decorative paints, with an investment of Rs 20 crore, will have a capacity of 10200 MT per annum. The Bawal facility, in Haryana, will see an investment of Rs 40 crore and the greenfield facility in Hosur, Tamil Nadu will see an investment of Rs 69 crore.
To compete with foreign entrants in the paint industry, the company has launched new initiatives, such as setting up exclusive outlets, named as ‘Impressions Style Zones’ in South India.