Kansai Nerolac Paints Ltd (KNPL), a leading player in the Indian paint industry, is set to invest ₹98 crore to expand production capacity at its Hosur factory in Tamil Nadu.

Currently, the Hosur unit operates with an installed capacity of 15,500 tonnes per month (TPM) for paints, varnishes, enamels, powders and resin manufacturing on a two-shift basis. Spanning a 54-acre site, the facility employs around 700 people.

It is proposing to increase the capacity to 28,140 TPM. The expansion is expected to generate job opportunities for about 280 people, as per the documents filed for environmental clearance.

The ₹7,393-crore company, a subsidiary of Kansai Paint Co Ltd, Japan, foresees strong growth in the Indian paint market, driven by rising industrialisation. It aims to outpace industry growth rates. According to KNPL, its current production capacities are insufficient to meet projected demand, necessitating the proposed expansion. The company currently runs eight factories, including the one in Hosur.

Market share

KNPL holds a significant position in the Indian paint market, ranking third in decorative paints, and leading in both automotive and powder coatings. Its offerings span home interior and exterior paints, mobility solutions, appliances and infrastructure coatings, according to a report by Asit C Mehta Investment Interrmediates.

Its business is split 55:45 between decorative and industrial paint segments. The industrial segment generates about 70 per cent of its revenue from automotive coatings.

The government’s focus on infrastructure development and robust growth in the consumer durables industry will drive demand in KNPL’s high-performance and powder coating segments. With a dominant 58-60 per cent market share in automotive coatings, KNPL continues to expand its customer base across industries. It has also ventured into new applications within automotive coatings, widening its addressable market, it said.

KNPL has made significant inroads into the electric vehicle (EV) segment. “In four-wheelers, EV penetration is currently 2-3 per cent, and in two-wheelers, it’s around 7-8 per cent. While growth is gradual, the three-wheeler EV market has surpassed 50 per cent penetration. KNPL’s reach in the EV segment is as strong as in conventional systems, where we hold a high market share,” said Anuj Jain, Managing Director, during the company’s Q2FY25 earnings call.