Asian Paints goes for organic expansion

Asian Paints is going to expand its manufacturing facilities at Ankaleshwar, Gujarat, from existing 32000 MT to 85000 MT. The company is altering its product mix to augment the capacity of synthetic resins and emulsions.

Asian Paints will expand the existing paint manufacturing capacity from 130,000 KL to 300,000 KL per annum. The company will invest an amount of Rs 650 crore for this expansion through internal accruals.

The company’s expansion and augmentation would involve phasing out the current Phthalic Anhydride and its allied products manufactured at this facility. The company is expecting the proposed expansion to be completed over the next 3 to 4 years, depending on the demand conditions.

The share price of Asian Paints declined 1.1 per cent on the bourses in early trades and is trading at Rs 961.95 on an intra-day basis. The stock tumbled due to flat Q3FY17 numbers from the company. The demand for the company's products suffered due to demonetisation drive in the country. Going forward, the company's strategy to bring back demand back on track will determine the financial performance of the company.