Livemint: March 11, 2015
Hyderabad: Asian Paints Ltd, the country’s biggest paint company, will invest Rs.1,750 crore to set up a manufacturing facility in Visakhapatnam in Andhra Pradesh.
The investment will be made over a period of 12 years as the company gradually adds capacity to the manufacturing unit. The plant will produce 400,000 kilolitres of paint annually at full capacity, the company said in a filing to the stock exchanges.
The Andhra Pradesh government has allotted the company 110 acres at Pudi village in Rambilli mandal (a local administrative unit) of Visakhapatnam. The project will likely create employment for 700 people, the AP government said in a statement.
Asian Paints signed an in-principle agreement with the state government on Tuesday in the presence of chief minister N. Chandrababu Naidu.
Andhra Pradesh has offered to reimburse 100% of gross value added tax (VAT) or state goods and service tax (SGST) for a period of 12 years from date of commercial production if Asian Paints makes 70% of the proposed investment within five years.
“In the event of any further changes to the proposed GST (goods and services tax) or levy of any other taxes of similar nature in lieu of VAT/SGST, the benefit envisaged herein shall continue,” the AP government statement said.
Water will be provided at Rs.15 per kilolitre, according to the agreement.
Asian Paints said in a stock market disclosure on 24 February that it was in advanced talks with governments of AP and Karnataka to set up integrated paint manufacturing plants to meet demand from southern and eastern parts of the country. It envisaged an investment of Rs.2,300 crore over 5-7 years to install 600,000 kilolitres annual capacity.
Asian Paints, the third largest paint company in Asia, has 25 manufacturing facilities across the world. It operates in 17 countries and services customers in 65 countries.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.