Asian Paints to set up manufacturing facility for VAE and VAM

Asian Paints has approved the setting up of a manufacturing facility for VAE (Vinyl Acetate Ethylene Emulsion) and VAM (Vinyl Acetate Monomer) in India for a proposed investment of approximately Rs. 2,100 crores over a period of 3 (three) years. This is subject to entering into definitive agreements including technology license agreement for manufacturing of VAE & VAM and obtaining necessary regulatory and other approvals. The installed capacity of the said manufacturing facility would be 100,000 tons p.a. for VAM and 150,000 tons p.a. for VAE.

About VAE & VAM

- VAE is considered to be the emulsion of the future, and the key constituent for manufacturing environment friendly paints.

- VAE offers better paint properties and can significantly improve paint performance in customer facing attributes.

- VAE is a key raw material for the Company. VAM is a key input for manufacturing VAE. Rationale for manufacturing VAM & VAE in - house

- Manufacturing VAM and VAE in India would provide substantial sustainable cost efficiencies, substituting our dependence on imports and would be used for the Company's internal consumption.

- This would be a key backward integration project for the Company.

The setting up of facility for manufacture of VAM would be based on licensed technology tie up with Kellogg Brown & Root LLC (KBR), USA. KBR is a USD 7.3 Bn company based at USA and has presence in 80+ countries.

"Vinyl Acetate Ethylene Emulsion is the Next Gen environment friendly emulsion, based on a unique Vinyl Acetate Monomer technology, which gives a robust competitive edge to Asian Paints in the coatings business. This pioneering technology comes to Asian Paints with a strong sustainable cost advantage and helps us to offer next level innovation for our paint customers. Asian Paints will be one of the first Paint companies to get into backward integration with setting up of this VAM and VAE manufacturing facility and we feel that this would be a true game changer in the Indian market" commented Mr. Amit Syngle, MD & CEO of Asian Paints Limited.

Shares of Asian Paints Limited was last trading in BSE at Rs. 3141.55 as compared to the previous close of Rs. 3214.10. The total number of shares traded during the day was 97859 in over 13784 trades.

The stock hit an intraday high of Rs. 3240.85 and intraday low of 3101.40. The net turnover during the day was Rs. 309166011.00.

Source : Equity Bulls

Keywords

AsianPaints INE021A01026 Expansion ManufacturingFacility VAM VAE