Asian Paints to set up its biggest manufacturing plant in AP

To invest Rs 1,750 crore in the greenfield project to be set up in Visakhapatnam

Ending speculation over the location of its next big manufacturing facility, India's largest paint manufacturer Asian Paints Limited today signed an MoU with the Andhra Pradesh government for setting up a 400,000 kilo litre capacity plant in north coastal district of Visakhapatnam.

Proposed to be developed in phases at an investment of Rs 1,750 crore, the facility would be the largest and most modern compared to the 25 manufacturing plants Asian Paints currently operates, according to Jalaj Dani, president of the company. The combined capacity of the existing manufacturing facilities of the company was around one million kilo liters.

"Apart from the incentives and logistics, the ease of business and transparency which the state government has demonstrated during the course of our interaction in the last eight months has tilted our decision in favour of AP," Dani said during the MoU signing ceremony in the presence of chief minister N Chandrababu Naidu.

The company had negotiated for land and other incentives with both AP and Karnataka governments and finally settled for a better deal. It may be recalled that in December last year the state investment promotion board headed by chief minister Naidu had cleared the incentives for this project.

The state government is giving 110 acres of land to the company at Pudi village in Visakhapatnam apart from promising the reimbursement of 100 per cent of gross value added tax (VAT)/ gross state goods and services tax (SGST) of the eligible capital investment for a period of 12 years from the date of commercial production. These are in addition to the other incentives promised in the industrial policy of the undivided AP.

Welcoming the company's plans, Naidu said its presence will help in creating an ecosystem for encouraging more industries to come to Visakhapatnam. "We want Visakhapatnam to be the biggest destination for industrial investments. We have conceived several projects, including a green filed international airport for Visakhapatnam. A positive mood was created and the Central incentives would only increase the momentum in terms investments," Naidu said.

Though company proposes to complete the project in 5 years the chief minister asked the company officials to reduce the gestation period of the project to two-and half years.

The new plant would help in catering to the eastern market of the country as the Rs 30,000-crore domestic paints business was expected to grow in double digits, according to Jalaj Dani.

The entire investment for the project would be mobilised from the company's internal accruals, he said.