Asian Paints plans to set up a manufacturing facility for Vinyl Acetate Ethylene Emulsion and Vinyl Acetate Monomer with an investment of Rs 2,100 crore over three years. The company has also entered into an agreement with Riddhi Siddhi Crusher & Land Transport, Fujair, UAE and Associated Soap Stone Distributing Company and others to set up a joint venture in Fujairah, United Arab Emirates with an investment of about Rs 550 crore over the next 2 years.
Asian Paints’ move comes on the back of Aditya Birla Group, UltraTech Cement, and JK Cement making a foray into the paint business with massive investment plans.
The investment is subject to entering into definitive agreements. The installed capacity would be 1 lakh tonnes per annum for Vinyl Acetate Monomer and 1.50 lakh tonnes per annum for Vinyl Acetate Ethylene. Vinyl Acetate Monomer is a key input for manufacturing Vinyl Acetate Ethylene, which is considered to be the emulsion of the future and the key constituent for manufacturing environment-friendly paints.
The move would be a key backward integration project for the company. The setting up of a facility for the manufacture of Vinyl Acetate Monomer would be based on a licensed technology tie-up with Kellogg Brown & Root LLC, US, which has a presence in over 80 countries.
The proposed joint venture will be set up with a 60:40 partnership to manufacture and export white cement and white cement clinker. The initial capacity of the manufacturing facility, to be set up in Fujairah, UAE, would be 2.65 lakh tonnes per annum. In addition, clinker grinding units would be set up in India.