Asian Paints chairman Ashwin Choksi said in the latest Annual Report that “the company would be investing in phases at both these facilities to enable it to service the future demand adequately.”
The company has completed the land procurement process in both the states during the last fiscal and has taken possession of the identified land.
The report said the company will be set up a paint manufacturing plant with a maximum capacity of 4,00,000 kilolitres (KL) in phases at Visakhapatnam in Andhra Pradesh at an approximate investment of Rs 1,750 crore.
However, on June 21, it informed BSE that “the company has re-looked at its product portfolio to be manufactured at this proposed manufacturing plant and has decided to revise its plans of setting up of the plant with a maximum capacity of 5,00,000 kilolitres per annum, to be put up in phases.”
“The approximate amount that would be invested by the company in phases over a period of 12 years from the date of commencement of construction, including the cost of land, would be Rs 1,785 crore,” it said.
In addition, the report said, the firm will invest about Rs 2,300 crore to set up manufacturing facility with a maximum capacity of 6,00,000 KL in Mysuru, Karnataka.
Over the longer term, the growth potential for the company’s various businesses is immense especially given the large impetus being put on infrastructure development and urbanisation through creation of smart cities.
“We are confident to convert this potential into reality and as a mark of this confidence, the company has initiated work on setting up new manufacturing facilities,” Choksi said.
However, he cautioned that the demand conditions still remain uncertain in the financial year 2016-17. While the country continues to enjoy the benefits of a strong domestic consumption base, it cannot remain isolated from the external world where most of the large economies continue to exhibit weak growth trends.
The advance estimates for a good monsoon are encouraging signs and could provide a real push to the rural sector demand, he said.
During 2015-16, the company invested resources to augment its manufacturing capacities to be in a position to support the increased future demand in a timely manner.
The expansion project at Rohtak plant in Haryana to double the capacity from the existing 2,00,000 KL per annum to 4,00,000 KL per annum was successfully completed. The company would now be focusing on ramping up and stabilisation of output from the Rohtak plant, it said.
The modernisation programme at older facilities at Ankleshwar in Gujarat and Kasna in Uttar Pradesh have been completed in time last year, it added.