Grasim Industries, the flagship company of Aditya Birla Group, seems to have taken its planned foray into paints business too seriously as the company has firmed up plans to set up paint manufacturing unit at five locations. Remaining close to the consumers appears to be the strategy of the company as it has decided to locate its proposed plants in North, West and South regions.
The manufacturing plants for Paints will be set up in Ludhiana (Punjab), Panipat (Haryana), Mahad (Maharashtra), Cheyyar (Tamil Nadu), and Chamarajanagar (Karnataka). The company has already spent Rs 270 crore on land acquisition across plant locations. Environmental clearances for different locations are expected to be received in 3-6 months, after which construction work will start.
It may be recalled here that in January this 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 will further diversify its portfolio, provide scale and growth and will 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 feels its entry into this high growth sector is expected to help painters/applicators and all traditional and emerging channel partners across India to expand their existing business and grow.
Indian paints industry is consistently registering double digit growth rate for the last 15 years. At the same time, per litre realisation is one of the lowest in India. Per litre realization in India is only $1.4 as against the global average of $3.6. On the other hand, there is substantial unorganised market who find the going tougher and has been conceding space to the players in the organised sector in recent years. All these factors make paints business a lucrative business proposition