Hempel Paints bets on India; eyes 15% market pie by 2016

Denmark-based Hempel Paints on Friday said it is betting big on the protective and marine paints segment in India and expects to increase its market share in the country to 15% in five years.

The protective paint market in India is estimated at Rs 1,000 crore, and the marine paint market at Rs 250 crore.

"Hempel already has a large share of the global market in segments like wind turbines, cranes and infrastructure, and India has also seen a rapid growth in these segments. We look forward to supplying the protective and marine coatings to the growing markets for these segments in South Asia,"

Hempel South Asia Director Umesh Singh said.

The company plans to invest euro 15-20 million in India to set up a factory in Maharashtra over a period of three years.

"It will be in Maharashtra, probably 200km away from Mumbai. Since our office is located in Mumbai, it makes more sense to set up a factory near the city," he told reporters.

The factory would be operational from mid-2013 and would have a capacity to produce 12 million litre paint on an annual basis, Singh said.
Hempel expects to export paints from this facility to other South Asian markets.

Meanwhile, the company announced the launch of its new factory at Nashik. The 1,500 square metre factory, set up at an investment of Rs 4 crore, has a capacity to produce 2.4 million litre paint annually on two shifts.

The paint from the Nashik unit would be for the domestic market only, Singh said.

In India, where the decorative market constitutes of 70% of the paint market, the Danish firm will enter the segment after five years, Singh said.

Hempel had no plans to enter the auto OEM paint market, he said.

The company is aiming a turnover of euro 18 million by 2013 from South Asia, of which India would contribute 90-95%. It envisaged a turnover of more than Euro 25 million by 2015.

Hempel recently acquired UK-based Crown Paints but said it will not use inorganic route in India to achieve its growth targets.

"We want to be in control of the business. In India the acquisition cost is relatively high as the companies are listed. We want to build the business using our own money as we are here for the long run," Hempel Executive Director and Chief Financial Officer Kim Junge Andersen said.

The company has no plans to get listed in India or any other country, he added.