Open tins of red paint pass along the production line inside the Akzo Nobel NV paint and coatings factory in Sassenheim, Netherlands. (Photographer: Jasper Juinen/Bloomberg)

Shalimar Paints Plans 50% Capacity Expansion By Next Year

Shalimar Paints Ltd. plans to increase its capacity by half by next year to meet growing demand.

“The industry is growing at 10-12 percent and we are going to grow much faster than that,” Ashok Gupta, vice chairman at Shalimar Paints, told BloombergQuint. “We are increasing our capacity by 50 percent by next year.”

The company, he said, will outpace the industry’s growth average with its good brand presence and distribution. According to Gupta, the paintmaker lost its market share in the last three-four years as it could not meet the increase in demand. “Now with capacity in line, we can fulfill those demands and we will go to our original levels, or higher.”

Shalimar’s market share of 1-1.5 percent translates into a huge potential to increase output, Gupta said. “With the kind of tech, R&D and depth in distribution, I think we have a good potential ahead. It should be possible for us to increase our revenue to the extent of our capacity increases.”

As Brent crude prices jumped, Gupta said the company took a hit in the July-September quarter due to a lag in passing on the rise in costs to customers. With crude prices falling again, Gupta said the company hopes to regain the pre-July margin in the next few quarters.

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