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Asian Paints Plans Rs 2650 Crore backward Integration, Including White Cement JV in UAE

In a major backward integration move, paint major Asian Paints Ltd will invest about Rs 2,650 crore to manufacture Vinyl Acetate Ethylene Emulsion (VAE) and Vinyl Acetate Monomer (VAM) in India and white cement in the UAE.

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While the VAE and VAM investment will be made within India the manufacturing of the white cement will be under a 60:40 joint venture in Fujairah, United Arab Emirates (UAE), with Riddhi Siddhi Crusher & Land Transport (Riddhi Siddhi), Fujairah, UAE, Associated Soap Stone Distributing Company Private Limited (ASD), India and others.

The outlay for the VAE and the VAM project will be about Rs 2,100 crore and for the white cement, it will be about Rs. 50 crore.

The investment will be made over a period of three years, including the land cost for VAE and VAM and over two years for white cement.

According to Asian Paints, the investment is subject to entering into definitive agreements including technology license agreement for manufacturing VAM and VAE and obtaining necessary regulatory and other approvals.

The installed capacity of the said manufacturing facility would be 100,000 tons per annum for VAM and 150,000 tons per annum for VAE.

VAM is a key input for manufacturing VAE.

Currently the company imports these products and a domestic plant will provide cost efficiencies, the company said.

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

In addition, the manufacturing of VAM and VAE would provide substantial sustainable cost efficiencies, and substituting company’s dependence on imports.

The setting up of a facility for manufacture of VAM would be based on licensed technology tie up with $7.3 billion Kellogg Brown & Root LLC (KBR), US.

According to Asian Paints, the UAE joint venture would manufacture and export white cement and clinker.

The initial capacity of the said manufacturing facility, to be set up in Fujairah, UAE, would be 265,000 tons per annum.

In addition, clinker grinding units would be set up in India as well, the company said.

SMEStreet Edit Desk

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