The ?10,000 crore investment of Kumar Mangalam Birla-controlled Grasim Industries Ltd (GIL) in the paint manufacturing business is likely to disrupt India's paint industry, in which billionaires Mukesh Ambani and Sajjan Jindal have interests too. Grasim plans to commission its plants with 1.3 billion liters a year aggregate capacity by March 2024.
According to officials, the company wants to speed up the construction of paint plants in Panipat (Haryana), Ludhiana (Punjab) and Chamarajanagar (Karnataka) since they got land and environmental clearances. The size of the investment and the planned capacity of 1.3-billion litre are expected to help Grasim target the second-largest spot in the sector
Grasim's capacity target of 1.3 billion litres is huge, considering Asian Paints' 1.73 billion litres capacity in FY2020. The country's largest paint maker, Asian Paints has a 42% market share. It is far ahead of the second-largest player, Berger Paints, which has a 12% share. Experts think with the launch of its products in 2024, Grasim will be catapulted to the second spot.
Grasim's paint foray is expected to derive synergy from the group's chemicals manufacturing. Besides, the distribution networks of cement (where Birla is the largest player in the country, with 120 million tonne capacity) and paints are identical, allowing the paints business to ride Birla's existing cement distribution network.
It will be able to tap its existing cement and industrial customers for the industrial paints business. Grasim's subsidiary UltraTech Cement is already in the paint business in a smaller way as it sells Birla White, a popular wall care putty brand. It is among the top three in the segment, along with JK Cement and Asian Paints, as it has the second-largest distribution network with 6,000 centres across India.
"The foray into paints is a strategic portfolio choice for Grasim, as it looks to identify new growth engines," Kumar Mangalam Birla, chairman, Aditya Birla Group said last year when the company announced the investment for the first time.
