Kansai Nerolac Paints plans to set up a manufacturing unit in Bangalore at an investment of Rs 300-crore this fiscal. The paint and varnish manufacturer said that, with the new plant, the company's annual capacity will increase to 260,000 tonnes from 220,000 tonnes across its existing 4 units.

“The capital expenditure will be funded through internal accruals,” the company's Managing Director, Mr H. M. Bharuka said.

The company also plans to expand its distribution network by 5 per cent from 14,000 dealers. Besides, it will add 5 new Nerolac Style Zone outlets in the current fiscal. At present, the company has 30 such stores.

The company's net profit for the quarter ending March 2012 has gone down by 22 per cent, which the company attributes to the gain of extraordinary income in the year-ago period. Besides, increasing input costs and depreciation in the rupee caused a dent on the company's bottom-line. However, topline grew by 28 per cent at Rs 662.5-crore as the demand for decorative paints went up.

Meanwhile, for the year ended March 31, 2012, Kansai Nerolac's net profit increased 4.8 per cent to Rs 216 crore, against Rs 206 crore year ago.

The firm's net sales also grew 21.59 per cent to Rs 2,586 crore in 2011-12, against Rs 2,127 crore in the previous year.

On price hikes, Mr Bharuka said, “We have taken a price hike of up to 13 per cent on an average last fiscal. The market remains volatile and a lot depends on how crude oil prices behave. We have not decided on any price hike yet, but going by the market trend, it can't be ruled out.”

He also said that the overall paint industry will see a slow growth at 10 per cent in FY 13 as against 14 per cent in FY 12 and 20 per cent in FY 11. The slowdown was also due to slower growth in the auto and white goods segment.

>priyanka.pani@thehindu.co.in

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