Asian Paints has signed a Memorandum of Understanding (MoU) with the Gujarat Government to kickstart the expansion of manufacturing capacity of paint from 130,000 KL to 250,000 KL and resins and emulsions to 32,000 MT to 85,000 MT. The expansion will be completed over a period of 2-3 years with total investment worth Rs 960 crore on plant and machinery and will be carried out at the land already owned by the company in the state.
“We inform you that the Company has today signed a Memorandum of Understanding (MoU) with the Government of Gujarat, commencing the proposed expansion of manufacturing capacity of paint from 130,000 KL to 250,000 KL and resins and emulsions from 32,000 MT to 85,000 MT to be completed over a period of the next 2-3 years at a total investment of Rs 960 crore (approx.) on plant and machinery at the current prevailing prices,” Asian Paints said in an exchange filing.
Asian Paints had reported a 28 per cent year-on-year (YoY) fall in consolidated net profit at Rs 595.96 crore in Q2 on the rise in the cost of raw material. Cost of raw material went up by 72.70 per cent YoY to Rs 4,570.53 crore while the company's profit before depreciation, interest, tax and other income (PBDIT) margin dropped to 12.73 per cent in Q2FY22 versus 23.64 per cent in Q2FY21.
“Steep inflation seen in raw material prices, since the beginning of this calendar year, has been phenomenal and has impacted gross margins across all businesses in the quarter. We have taken a series of price increases and would look at a further price increase to mitigate the impact of this persistently high inflation and are confident that we should be able to turn this around strongly in the coming quarter,” CEO and Managing Director of Asian Paints Amit Syngle told BusinessToday.In.