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Nippon Paints Sets-up New Plant in Bawal, India to Focus on Automotive Refinishing Segment

August 27, 2013

Japanese paint manufacturer, Nippon Paints is setting up a new plant in Bawal, India to produce automotive refinishing paints.

According to Ramakanth Akula, president, decorative, Nippon Paints India, the decorative paint segment, which was growing by 20 percent between 2001 and 2011, slowed to 12 percent last year and is expected to further dip to 8 to 9 percent this year. "The general slowdown has affected paints also as people cut their spending on non-essential categories," he said. In the industrial segment, the dip in auto sales has slowed down the consumption of automotive coatings by original equipment manufacturers.

On the other hand, the automotive refinishing paints segment has been rather resilient. The Rs. 1,200 crore market is still growing by 20 percent. "The repair works of automobiles is not something that can be postponed due to economic worries," he said. Exxon Mobil, PPG and DuPont are some of the leading brands in the auto refinishing space.

Nippon entered the segment last year and posted sales revenue of Rs 40 crore. The company wants to double the sales this year. "We target 15 percent market share in the segment in five years," he said.

In order to augment the sales, it is setting up a factory at Bawal in Haryana. The unit has a capacity to produce 4,000 kiloliter of paint a year initially and it can be scaled up over a few years, said Akula. Nippon has been earlier importing 60 percent of its auto refinish paints and getting 40 percent produced domestically by contract manufacturers.

Nippon is also expanding its market in the automotive coatings for OEMs. It is presently supplying for Toyota from its Chennai plant.

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