Nippon to invest Rs. 4,500-mn in India

Chennai: Japan-based international paint major Nippon Paints is planning to invest another Rs 450 crore in India operations. “This may happen in phases over a period of three years from now,” said Mr Yip Wai Meng, Managing Director, Nippon Paint (India) Pvt Ltd.

He said the company has invested Rs 80 crore so far in its new green-field manufacturing facility at Sriperumbudur, near Chennai, which occupies an area of 11.5 acre. The plant, which is set to go on stream from October this year, can manufacture 20,000 kilo litres of decorative paints a year. “This facility can be scaled up to manufacture another 10,000 kl,” he said.

Another facility:

The company will invest another Rs 100 crore by 2009 for expanding its footprint in the Indian market. The company has also acquired 31 acres in Gurgaon to set up a new plant once the volumes pick up in India. This may involve an investment of around Rs 350 crore.

Expansion:

Nippon India is among the smaller players in the Rs 7,500-crore Indian market for decorative paints. The company forayed into this market in mid-2006. Currently, the company’s products are available only in the South. According to Mr Ramakanth V. Akula, Vice-President (Decoratives), Nippon Paint India, the company plans to expand to other geographies in the country starting with the West in April.

The company, at present, markets its products imported from its facilities in neighbouring countries. “Once the Chennai facility goes on stream, it will be easier for us to cater to other markets here,” he said. At present, it sells its products through 90 exclusive brand outlets and over 60 multi-brand outlets in the South. “We are planning to double the numbers (both EBOs and MBOs) very soon,” said Mr Akula.

Nippon also has a small facility in Pune to manufacture industrial paints. Industrial paints contribute Rs 5 crore to the company’s total turnover of Rs 25 crore. However, it is toying with the idea of expanding its industrial paints portfolio and also entering into the fine chemicals business. “We are yet to arrive at any concrete idea on those counts,” Mr Meng said.

The company on Wednesday launched its new product — Premium all-in-1, which it says is odour-free and is available in more than 1,000 shades. This high-end product is priced at Rs 500 a litre (a litre can cover up to 23-25 sq. mt.) With this product roll-out, it hopes to double its turnover to Rs 50 crore in 2008.