In a big boost to its manufacturing capacity, paints major Asian Paints Limited, today signed up for its proposed Greenfield plant near Visakahpatnam with an outlay of Rs. 1750 crore. A memorandum of understanding was inked today by Jalaj Dani, President, International and Chemicals, Asian Paints, and Principal Secretary Industries, Government of Andhra Pradesh, S.S. Rawat, in the presence of Chief Minister N Chandrababu Naidu.
This is another major project which the State has managed to attract after Hero MotoCorp which has decided to set up a two-wheeler manufacturing unit in the State, amidst stiff competition from couple of other States, including Karnataka and Tamil Nadu. Ranked among three largest paint manufacturers in the region, Asian paints, which currently has 25 manufacturing units with total capacity of 10 KL of paint, proposes to set up this new plant near Visakhapatnam with a capacity of 4,00,000 KL of paint in a phased manner.
Jalaj Dani said the project takes about 4-5 years to complete, which includes about 12 months to secure various mandatory clearances. It would employ about 700 people and also create other ancillary units in the region. “We expect to meet the funding requirement for the project through internal accruals,” Dani told Business Line.
Naidu said the decision of Asian Paints to locate a unit near Visakhapatnam would be mutually beneficial as it would also attract more companies in the Visakhpatnam area, where a number of infrastructure projects are being proposed to be developed, including an international airport.
The State Cabinet recently approved several incentives for the paint unit. This includes Value Added Tax reimbursement of 100 per cent of the eligible capital investment for 12 years starting from the date of commercial production. This is subject to the condition that the company achieves 70 per cent of the proposed investment of Rs. 1750 crore within five years from the date of commencement of commercial production.
The company would also be entitled to other incentives provided in the industrial policy and some additional concessions which would accrue to the State if it is granted special status.