JSW Paints plans new plant, eyes pan-India footprint

Suresh P Iyengar Mumbai | Updated on July 26, 2021

Parth Jindal, MD, JSW Paints

Looking to set up a new plant with a capacity of 1 lakh kilo litres of decorative paint

JSW Paints plans to set up a new plant as it sees a strong bounce back in demand from mid-August. The company, which entered the highly competitive paint market in 2019, is in the process of becoming a pan-India player with the phased roll-out in the northern and central States by end of this year.

The company recently attracted $100 million private equity investment. In addition, JSW group entity JSW Steel has committed investment of ₹750 crore into the paints business.

Parth Jindal, Managing Director, JSW Paints, told BusinessLine that out of the ₹750-crore investment by JSW Steel, the company will use ₹500 crore in the next two years and keep the rest as a reserve. Of this ₹250 crore will be used for capex and rest in product promotion.

Decorative segment

JSW Paints was predominantly into industrial paints but is now gaining traction in the decorative segment. The company plans to achieve a topline of ₹1,100 crore this fiscal of which decorative paints will account for ₹550 crore of sales. Next year, decorative paint contribution will be about 70 per cent of overall sales and by FY24 the ratio will be 80:20 in favour of decorative paints, Jindal said.

New plant

The company is looking to set up a new plant with a capacity of 1 lakh kilo litres of decorative paint. Jindal said three possible locations have been identified including JSW Steel’s recently acquired Asian Colour Coated plant in Punjab, JSW Cement-owned plant at Salboni in West Bengal and JSW Steel Colour Coated unit at Kamleshwar in Nagpur.

This comes even as the paint sector is buzzing with the entry of formidable players like Aditya Birla Group company Grasim Industries which plans to invest ₹5,000 crore over three years. Sequoia Capital-backed Indigo Paints is also raising ₹1,200 crore through an initial public offering.

Jindal is, however, unfettered and is pushing to make available JSW Paints products across the country by end of this year, He is expanding capacity at both the existing plants in Vasind in Maharashtra and Vijayanagar in Karnataka. In Vasind, the capacity will increase to 60,000 kilo litres per annum from 25,000 kl. In decorative, the capacity will go up to 1.50 lakh kilo litre per annum from 90,000 kl at Vijayanagar. JSW Paints will have partnerships with at least 10,000 dealers to reach customers in most States barring Jammu & Kashmir and North Eastern region.

Jindal is also betting on innovative marketing and branding exercises to engage with consumers. For example, the “any colour one pricing” strategy under which the company has a fixed price for any colour has already upset the established players. “If competitors were to adopt this pricing they would have to take 2-3 per cent reduction in their EBITDA,” said Jindal.

JSW Paints recently filed a case in Competition Commission of India against Asian Paints and few others for allegedly abusing their dominant position in certain southern territories.

Jindal said Asian Paints and other players are blocking JSW Paints from stocking its products at the retailer's end. Despite all odds, the strong presence in the steel and cement business has helped JSW Paints to become the second largest player in Bangalore, Hyderabad and Nagpur in just two years, he added.

Published on July 26, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like