Nippon Paint plans Rs.3.5-billion investment in Gurgaon

March 5th, 2008 - 8:02 pm ICT by admin  

Chennai, March 5 (IANS) Nippon Paint (India) Private Ltd will invest around Rs.3.5 billion to build a new plant in Gurgaon near New Delhi, said a top company official. “It will be our flagship plant in India, manufacturing decorative and industrial paints. We have acquired 31 acres in Gurgaon,” Yip Wai Meng, managing director of the company, told the media here Wednesday.

The proposed plant will cater to the northern and western markets for decorative and industrial paints.

The company - a 50:50 joint venture between Nippon Paint Co, Japan and NIPSEA Holding of Singapore - is already building a decorative paint plant in Sriperumbudur near Chennai at an outlay of Rs.800 million.

The 20,000-kilolitre (KL) per annum plant is expected to be ready this October catering to the southern market.

“Depending on the demand, we can scale up the production by 10,000 KL,” Meng said.

Nippon Paint has leased a facility in Pune to give rust-preventive paint coat to steel sheets before they are rolled.

The Rs.250-million revenue company started its marketing operations in 2006 by importing and selling decorative paints.

“Decorative paints give us Rs.200 million and the Pune operations the balance,” said Ramakanth V. Akula, vice president of decoratives.

Speaking about the company’s plans for industrial paints, Meng said that Nippon Paint will target Japanese vehicle makers like Toyota Kirloskar Motors Ltd, Honda Siel Cars India Ltd and other two-wheeler manufacturers.

“We are in talks with Toyota Kirloskar Motors to supply water-based paint. The paint line will be sophisticated and involves sizeable investment. The discussions are still on,” Meng said.

Meanwhile, with booming construction in the country, the company has chalked out plans to earn more revenue.

Nippon Paint became the first paint company in India to launch odourless paint under the brand Nippon Odourless priced at Rs.500 per litre in Chennai.

Akula said the near-zero volatile organic compound (VOC) product would not give any fresh paint odour.

Nippon Paint is targeting a turnover of Rs.500 million this calendar year -Rs.400 million in decorative paints and Rs.100 million in industrial paints.

As to the road to achieve the target, Akula said that the company would double its exclusive showrooms to 180 and enter newer markets like Gujarat.

Presently, Nippon Paint is operational only the four southern states of India with 90 exclusive stores and 60 multi-brand outlets.

Akula said the southern market accounted for 38 percent of India’s total decorative paint market of Rs.75 billion.

“Out of the total, the share of premium decorative paint product will be Rs.11.25 billion,” he said.

Focussing mainly on retail sales, Nippon Paint will train its guns on the institutional segment once its Chennai plant starts production.

“We will promote our brand through advertisements. We will also conduct awareness programmes for painters who play a vital role in the paint purchase decisions of end customers,” Akula said.

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