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Shalimar Paints plans to ramp up capacity

Published on 2007-08-22. Author : SpecialChem

Shalimar Paints, which is the India's third-largest protective coatings supplier, has firmed up plans to ramp up capacity. For doing so, the company is considering both organic and inorganic routes and a decision is expected within six months. "We will either set up a greedfield plant in south India or will acquire a company based in that region. We have already identified three paint companies as possible targets. A final decision will be taken by the board within the next six months," Sandeep Sarda, executive director & CEO of Shalimar Paints, told newsmen on the sidelines of the company's 105th AGM.

At present, the annual capacity of Shalimar Paints is 43,000 tonne. It has three plants located in Sikandrabad, Nashik and Howrah. The company has undertaken a capacity expansion exercise at its existing facilities by at least 25%, Mr. Sarda added. Value wise, the national paints market is at Rs 11,000 crore. Out of this, the decorative paints market is Rs 7,700 crore while the balance Rs 3,400 crore is in the industrial paints market. Shalimar Paints enjoys a 4% market share in both categories. The company is also talking to global technology leaders to ink a technology tie-up with them. This apart, the company has plans to introduce water-based eco-friendly paints and new generation wood finish and timber treatments to shore up revenues.

The company has also laid special emphasis on sale of high-value products to improve operative margins. Incidentally, the company's borrowing costs have increased due to hardening of interests rates - both on rupee borrowings and on foreign currency loans and also on account of increased utilization of working capital limits. The interest costs have increased from Rs. 2.92 crore to Rs. 5.34 in 2006-07. The Company announced its QI results on Thursday. The company posted a net sale of Rs. 69.59 crore QI of FY08 against Rs. 61.25 crore in QI of FY07. It clocked a net profit of Rs. 1.33 crore in the first quarter of this fiscal against Rs. 47 lakh in the corresponding period of the previous year.

Source: Shalimar Paints

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