Mumbai, Jun 22: Domestic paint major Asian Paints Ltd is evaluating opportunities to increase its presence in the international markets.
“The company’s wholly-owned subsidiary in Mauritius, Asian Paints (International) Limited (APIL), had in April signed an agreement with shareholders of Kadisco Chemical Industry PLC., Ethiopia, to acquire either directly or through its subsidiaries 51 per cent of its share capital.
“The company is awaiting regulatory approvals for closure of this acquisition,” Asian Paints chairman Ashwin Choksi said in its annual report here.
Kadisco is a major paints player in the Ethiopian market and is involved in the manufacturing and selling of paints, other coatings and adhesives in Ethiopia.
Besides, the company continues to evaluate opportunities to increase its presence in the international markets. Expansion of the manufacturing capacity in Bangladesh from 12,000 kilo litre to 24,000 KL per annum is nearing completion and commissioning is expected by the first quarter of 2014-15. The company’s subsidiary at Sri Lanka has acquired land at Matugama Industrial estate for a new manufacturing facility.
“The domestic paint industry is faced with hardships like overall sluggish economy, excessive rainfall in parts of the Southern India and slowdown in construction in some states. Further, the inflationary impact on raw material prices, largely due to the depreciation in rupee, led to frequent price increases in FY 14,” Choksi said.
In the domestic market, going forward, the company would be initiating the expansion of capacity at its Rohtak plant in Haryana to increase the manufacturing capacity from the current 2,00,000 KL per annum to 4,00,000 KL per annum.
Choksi said that considering the overall sluggish environment, the domestic paint demand is comparatively resilient although not as good as expected.
“Demand from the rural areas was relatively better than the urban markets. While, the retail demand was encouraging, the industrial market remained stagnant. Lack of public spending in infrastructure sector and weak private sector investments affected the industrial product demand,” the chairman said.