Grasim Industries Ltd (GIL) plans to commission its plants with 1.3 billion litres a year aggregate capacity by March 2024. The $1.3 billion investment of Grasim in the paint manufacturing business is likely to disrupt India’s paint industry.
According to officials, the company wants to speed up the construction of paint plants in Panipat (Haryana), Ludhiana (Punjab) and Chamarajanagar (Karnataka) since they got land and environmental clearances.
The size of the investment and the planned capacity of 1.3-billion litre are expected to help Grasim target the second-largest spot in the sector, say industry sources.
Grasim’s capacity target of 1.3 billion litres is huge, considering Asian Paints’ 1.73 billion litres capacity in FY2020. The country’s largest paint maker, Asian Paints has a 42% market share. It is far ahead of the second-largest player, Berger Paints, which has a 12% share.
The Indian paint industry has over 3,000 paint manufacturers, including global brands Akzo Nobel, Nippon, Kansai and Berger. 75% of the demand is for decorative paints and a 25% for industrial paints.
Last year, Grasim announced its entry into paints, with an investment of ₹5,000 crore ($640 million). But the company decided to double the investment as the demand picks up in the decorative paints segment.
“The foray into paints is a strategic portfolio choice for Grasim, as it looks to identify new growth engines,” Kumar Mangalam Birla, chairman, Aditya Birla Group said last year when the company announced the investment for the first time.