KATHMANDU: In a move to to increase its presence in North and Western markets in India, Nippon Paint is planning to set up a new facility in the NCR or in Harayana at a cost of about Rs 80-90 crore. Meanwhile, to improve its capacity utilisation at Chennai facility Nippon plans to start export from Chennai to Nepal and Middle East markets.
S Mahesh Anand, president – decorative business, Nippon Paint (India) Private Ltd said that at present the company has major presence in Southern markets and in the recent years the company started focussing on North and West, while it is yet to venture into East. “Major handicap for us is we don’t have a plant in North India. To address this the company is looking at setting up a plant which will cater to North and East markets,” he said.
Nippon is looking at NCR and Haryana for the proposed plant, which will have a capacity to produce 500 kl a month. By 2017 the company hopes to start the plant, by which it will also be a pan-India player. It may be noted, the company is a nine old company in India. The new facility can bring a revenue of around Rs 600-700 crore a year, said Anand.
The facility at Sriperumbudur, near Chennai has a capacity to 7000 liters per month, but only 30% being utilised, said Anand, to improve the capacity utilisation the company is planning to export to Nepal and Middle East markets from 2016.
Anand claims that the company has a three% market in South India and plans to increase it to 12% by 2020. While at all India level its market share is around 1.8% and planning to increase it to four%.
According to him the paint industry is estimated to be around Rs 32,000 crore and growing at around 6-7%. While the current growth would continue, Nippon hopes the industry will report double digit growth from next year.
Anand said the company is bullish about Indian market considering per capita of paint in India is around 3 kgs in India compared to 15 kgs in developed countries and 7 kgs in developing countries, including Pakistan and Sri Lanka.
Of the total industry, 72% domes from decorative in which Nippon is one of the top five major players. The company clocked in Rs 510 crore turnover in 2014 (calendar year) and is expected to close 2015 with a revenue of around rs 670 crore. Nippon is nine years old in the Indian market.
Decorative business contributes nearly 50% of the total turnover, while the balance comes from industry and automotive. Currently the company has 2,200 dealers of which around 1,200 are in Southern states.
The company is planning to rope in entrepreneurs to set up new stores, including experience stores across the country. He noted, paint industry grow atleast 1.5 times of the GDP but last few years it is growing at the same phase GDP is growing and it will take atleast one more year to grow in multiple.
