Grasim aims to be among the top two decorative paints manufacturers in the country for which it has doubled its proposed capital expenditure to Rs 10,000 crore by 2025. Earlier the company had planned to spend Rs 5,000 crore capex by 2024 for setting up paint manufacturing capacities. However, the company has not yet revealed the proposed annual capex for its paints business.
The earlier plans were to reach 1332MLPA capacity over 6-7 years. However, now the commissioning of plants would start from Q4FY2023 reaching full capacity implementation over 12-15 months post Q4FY2023. However, the management expects project IRR to remain unchanged at 20% to be achieved with a reworked business model and economies of scale. It expects to be the number two profitable company in the paints sector.
Further, Grasim and Ultratech would be reaching some kind of agreement concerning the usage of putty in paints going ahead. The company would only procure titanium oxide from outside while resins and emulsions would be used from in-house production.
It may be recalled here that in January last year, Grasim Industries had announced its foray into decorative paints manufacturing business setting aside Rs 5,000 crore capex in next three years. According to the company, its entry into this consumer-oriented business would further diversify its portfolio, provide scale and growth and would also offer a wide choice to Indian consumers as the Company plans to introduce the latest as well as a wide range of paint products. The Company also claimed then that its entry into this high growth sector would help painters/applicators and all traditional and emerging channel partners across India to expand their existing business and grow.