"Though we lost the peak demand month of April to the lockdown, sales are almost normal now and plants running at pre-lockdown days now. Given this, I expect to close this year with double-digit growth, H M Bharuka, vice-chairman and managing director of Kansai Nerolac Paints told PTI.
"Expecting better demand ahead, we are adding 40,000 litres capacity at our Amritsar plant and would be investing Rs 450 crore in capex, most of which will be spent this year," he said.
He said demand is led by the decorative segment which saw a sharper than anticipated recovery already thanks to the rural and semi-urban markets.
Fortunately, industrial segment has also shown signs of revival from August and we expect this to improve further as we approach the festival season, he said.
Nerolac, which is the first domestic paints maker to launch a lead-free paint and an industry-first anti-fungal bio-wash recently, has 5.4 lakh litres of capacity across its six plants. The new addition will take the output to 5.8 lakh litres, he said.
Its six manufacturing plants are at Jainpur in UP, Bawal in Haryana, Chiplun in Maharashtra, Hosur in Tamil Nadu, Sayakha in Gujarat and Amritsar in Punjab and the seventh one is proposed in Visakhapatnam in Andhra Pradesh, which Bharuka said is being postponed by a year due to the pandemic.
Kansai Nerolac was started in September 1920 as Gahagan Paints & Varnish in Bombay in association with Goodlass and marketed its products as Goodlass Wall, and in 1957, it went public as Goodlass Nerolac Paints.
In 1976 Goodlass Nerolac became a part of the Tata Forbes Group. In 1983 Goodlass Nerolac singed a technical collaboration with Kansai Paint of Japan, which in 1999 led to Kansai buying out Tata Forbes Gokak's entire stake and in July 2006 it was renamed Kansai Nerolac Paints.
Kansai Nerolac reported a net income of Rs 535.4 crore in 2019-20 on a revenue of Rs 4,943 crore but in the June quarter, revenue plunged almost 60 per cent to Rs 598 crore, while net income nosedived over 71 per cent to Rs 42.7 crore.
As part of the centenary year, Bharuka said going forward they will focus on four strategic areas -- strengthening the core by expanding its leadership position in automotive paints, enter new areas like construction chemicals and water proofing; expand international presence, and improve tech capabilities.
Nerolac is already present in Bangladesh, Sri Lanka and Nepal. In Bangladesh, where it has around 10 per cent market share, it is planning to expand into industrial and powder coatings business by setting up new plants. In Nepal it has around 12 per cent market share. These three markets contribute around 5 per cent of total revenue.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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