Informist, Thursday, Feb 22, 2024
--Grasim launches paints business under 'Birla Opus' brand
--Grasim Chairman Birla: Entered paints business on infra opportunity
--Grasim Chairman Birla: Launching Panipat, Ludhiana, Cheyyar plants
--Grasim Chairman Birla:Chamarajanagar plant to be launched by Apr-Jun
--Grasim Chairman Birla: Kharagpur plant to be launched by Jan-Mar 2025
--Grasim: Launching services in Punjab, Haryana, Tamil Nadu in Mar
--Grasim:To launch paint ops in towns with over 100,000 population Jul
--Grasim:Aim to reach 100-bln-rupee paint revenue in 3 yrs of full ops
--Grasim: Aim to be profitable within 3 yrs of full-scale ops
By Shiladitya Pandit and Vivek Kumar
MUMBAI – Aditya Birla group-owned Grasim Industries Ltd today launched the company's decorative paints business under the Birla Opus brand, in a move that may disrupt India's paints sector significantly. Grasim Chairman Kumar Managalam Birla said in his opening address that the company is aiming to turn the paints business profitable in three years from the start of full operations, and generate more than 100 bln rupees in revenue over that same period.
Grasim has committed around 100 bln rupees as investment to build its paints' capacity. The company launched its first three paint manufacturing plants in Panipat, Ludhiana, and Cheyyar. Three other plants--in Karnataka's Chamarajanagar, Mahad in Maharashtra, and at Kharagpur in West Bengal--will be commissioned in the next financial year.
The Chamarajanagar plant is expected to be commissioned in Apr-Jun, while the plant in Mahad is scheduled for start of operations later in the calendar year. The Kharagpur facility is in line for commissioning in Jan-Mar 2025, Birla said in his address.
Once the six facilities are commissioned, Birla Opus is expected to have a paint capacity of 1.33 bln ltr per annum, with an option of adding 500 mln ltr per annum more at a significantly lower cost, Grasim said. This will add 40% more capacity to the Indian paints' sector, the company added.
Birla Opus is slated to launch its products in Haryana, Punjab, and Tamil Nadu--the three states where its first three plants are located--in mid-March. After that, products will be rolled out in July in all cities and towns in India with a population of over 100,000, Grasim said in a release.
In his address, Birla said that the capacity of the paints business within the next year is slated to be more than that of the second, third, and fourth-largest players combined. Besides the current market leader, Asian Paints, other key decorative paint manufacturers include Berger Paints, Kansai Nerolac, Akzo Nobel India, Indigo Paints, and the unlisted JSW Paints. At the end of 2022-23 (Apr-Mar), Asian Paints had a decorative paints capacity in India of 1.73 bln ltr per annum, which the company has expanded since.
Grasim entered the paints segment in India, Birla said, to cash in on opportunities in the resurgent infrastructure and construction segment, which is slated to contribute 9% to the country's GDP in about a decade. He added that other group companies, such as UltraTech Cement and Hindalco Industries, are key players in projects such as highway expansion and railway light-weighting.
During the launch, the company said that despite the outward appearance of competition in the paint industry in India, one player clearly dominates the field, a reference to the dominant position of Asian Paints. Aditya Birla group director Himanshu Kapania also alleged during the launch event that stakeholders like dealers were under pressure not to work with Birla Opus.
"The century-old industry from outside appears competitive, but reality is quite different. One player dominates, and sometimes monopolises in certain geographies and products. Some of our friends will share my belief that even (while) arriving at this event, they were being terrorised not to participate. Our strong belief is that customers have the right to serious and differentiated choice," Kapania said, as part of his address.
While the company did not disclose the exact number of dealers it has signed on, Grasim stated during its earnings call for Oct-Dec that it intends to work primarily with existing paint dealers. In his address during the launch event, Birla invited the "entire spectrum of 100,000+ paint dealers pan India" to work with Birla Opus. Grasim has also enroled around 300,000 painting contractors with the new paint brand, it stated in a release.
Today, shares of Grasim Industries closed 0.3% higher at 2,201.20 rupees on the National Stock Exchange. End
Edited by Aditya Sakorkar
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