The Rs 50-crore expansion project for water-based paints of Akzo Nobel at Hyderabad will be commissioned next week.

Mr Amit Jain, Managing Director of Akzo Nobel India Ltd, told reporters after the annual general meeting here on Friday that the expanded capacity would stand at 110 million litres from the present 80 million litres.

Greenfield plant

He said the company has planned to set up a 100 million litres greenfield plant at an estimated cost of around Rs 200 crore in either Karnataka or in Madhya Pradesh.

“We are yet to decide on the location. Both the State Governments offered to provide required land of about 55 acres. In the next three months we would take the final call,” Mr Jain said.

Until recently the company was understood to have been close to setting up the proposed project at Malanpur Industrial Area near Gwalior in Madhya Pradesh. However, the Karnataka Government also showed keen interest in hosting the project in the State and offered better incentives.

The water-based paints manufacturing project, so far the largest for Akzo Nobel India, is scheduled to be commissioned within the next two years.

Results

During the first quarter to June 30, the company reported paints sales growth of 21 per cent over the corresponding quarter in 2010-11. According to Mr Nihal Kaviratne, Chairman of the company, “after absorbing the additional costs due to input cost inflation and strategic investment in brand and capability building, segment profit at Rs 44 crore is still ahead of he achievement in the corresponding quarter in 2010-11”.

Mr Jain said year-on-year raw material cost went up by 14 per cent.

To overcome the raw material cost spike, the global company has planned “reformulation” of its paints products using alternatives.

The managing director said indicated that Akzo Noble was “seriously” considering introduction of wood finishes and wood care products in the country.

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