Asian Paints to invest over Rs 2,650 crore in manufacturing multiple key inputs

Asian Paints on Thursday announced investments in a greenfield vinyl acetate plant, white cement joint venture in the UAE and a nano-technology company for a cumulative investment of over Rs 2,650 crore.
The investments will help the paints maker with backward integration, it said.

The company will be investing Rs 2,100 to set up a manufacturing facility for VAE (Vinyl Acetate Ethylene Emulsion) and VAM (Vinyl Acetate Monomer) in India. The plant will have an installed capacity of 100,000 tons per annum for VAM and 150,000 tons per annum for VAE.

VAE is considered to be the emulsion of the future, and the key constituent for manufacturing environment friendly paints, the company said in a statement. VAM is a key input for manufacturing VAE.

“Asian Paints will be one of the first Paint companies to get into backward integration with setting up of this VAM and VAE manufacturing facility and we feel that this would be a true game changer in the Indian market,” said Amit Syngle, the managing director of Asian Paints.

Meanwhile, the paints maker will form a 60:40 joint venture with Riddhi Siddhi Crusher & Land Transport (Riddhi Siddhi) and Associated Soap Stone Distributing Company Private Limited (ASD) to set up a white- cement plant with an investment of Rs 550 crore.

Riddhi Siddhi holds mining rights for high quality limestone mines in Fujairah. ASD is a leading supplier of raw materials to the paint industry.

White Cement is a key raw material in the manufacture of powder paints and undercoats like putty and will help Asian Paints in further backward integration in its value chain.

The third investment will be in nanotechnology player Harind Chemicals and Pharmaceuticals Private Limited. Asian Paints on Thursday entered into a definitive agreement with existing shareholders of the company to acquire a 51% stake. It will be acquiring an additional 39% stake from the existing shareholders in a staggered manner over the coming 5 years subject to fulfilment of certain conditions.