Nippon Paint to Set up New Plant to Increase Capacity Fourfold in India

Nippon Paint has revealed plans to reveal its capacity fourfold for the production of automotive paint in India by setting up a new plant. It has also recently completed extensive upgrades to its current factory. The company, which is based in Osaka, Japan is planning to spend 4 billion yen (USD 34.7 million) on the expansion, thus increasing its total capacity in India to 25,000 tons of auto paint on an annual basis.

The company is planning to set up a new plant and make it operational by the end of the year in the southern city of Hindupur. The Hindupur facility is meant to mostly produce water-based paint that will inhibit rusting. Paint from this factory will be supplied to major car manufacturers like Tata Motors and Toyota Motor, once it becomes operational.

The company has also expanded the capacity of its plant in Delhi. Currently, one of the major car manufacturers in India, Maruti Suzuki India, is setting up a new factory in north India and eventually Nippon Paint’s factory is expected to become one of the suppliers to this factory as the demand for automotive paint surges.

Nippon Paint is one of the major players in the East Asian automotive market which accounts for as much as 60 per cent of the company’s sales. Though the demand for vehicles is growing at a fast pace in India with sales of new vehicles expected to reach 5.5 million units in 2020, Nippon Paint accounts for less than 10 per cent of the paint market, even after it merged its automotive coatings operations with Berger Paints India. With the establishment of the new factory, the company is hoping to increase this figure to 30 per cent. Currently, Kansai Paints is the dominant player in the auto paints segment with over 50 per cent market share.