Kansai Nerolac Paints Ltd (KNPL), a prominent player in the Indian paint industry, has announced plans to invest ₹98 crore in expanding the production capacity at its Hosur factory in Tamil Nadu.
The move comes as the company aims to strengthen its market position and cater to the growing demand for its products.
Current Capacity and Expansion Plans
The Hosur unit currently operates with an installed capacity of 15,500 tons per month (TPM) across various products, including paints, varnishes, enamels, powders, and resin manufacturing.
The factory, situated on a sprawling 54-acre site, employs around 700 people.
KNPL intends to increase the capacity to 28,140 TPM, a substantial boost aimed at meeting the rising demand.
Market Growth and Strategic Objectives
Kansai Nerolac, a ₹7,393-crore company and a subsidiary of Kansai Paint Co Ltd, Japan, is set to capitalize on the burgeoning Indian paint market.
The company anticipates strong growth driven by increased industrialization in the country.
The expansion is a critical step to outpace the industry’s growth rate. It will also help meet the projected demand, which the current production capacities cannot satisfy.
Company’s Market Position and Segments
KNPL operates a network of eight factories, with the Hosur unit being one of the key players in its production strategy.
The company holds a strong position in the Indian market. It ranks third in decorative paints and leads in automotive and powder coatings.
It offers a diverse range of products. These include home interior and exterior paints, mobility solutions, appliances, and infrastructure coatings. Asit C Mehta Investment Intermediates highlighted this in a report.
The company divides its business between two main segments: decorative paints and industrial paints.
The industrial segment contributes significantly to the company’s revenue. Automotive coatings account for about 70 percent of its industrial sales.
Growth Drivers and Future Outlook
The expansion of infrastructure and the robust growth of the consumer durables industry will drive demand for high-performance coatings. Powder coatings, a key offering of KNPL, will also benefit from this demand.
The company holds a dominant market share of 58-60 percent in automotive coatings. It continues to expand its customer base across various industries.
Additionally, KNPL is exploring new applications within automotive coatings, thus broadening its addressable market.
The expansion at the Hosur facility is expected to play a pivotal role. It will support the company’s growth trajectory, as reported by thehindubusinessline.com.
