Kansai Nerolac Paints Limited

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BSE Code: 500165       NSE Code: KANSAINER

Business Profile
Business Profile
Kansai Nerolac Paints (GOONERPA) was formerly known as Goodlass Nerolac Paints. The group`s principal activities are to manufacture and market industrial paints and offer a comprehensive product range from pre-treatment chemicals to surface finish coating. The group produces oils, inorganic pigments, organic pigments and synthetic resins. In 1983, Goodlass Nerolac Paints strengthened itself by entering in technical collaboration agreements with Kansai Paint Company, Japan and Nihon Tokushu Toryo Company, Japan. Goodlass Nerolac Paints became a wholly-owned subsidiary of Kansai Paint Company after the latter took over the entire stake of the company in 1999.

The company`s products include decorative and industrial paints used for walls, wood, metals and industrial coatings. It has five strategically-located manufacturing units all over India and a strong dealer network of over 11,000 dealers across the country. The company manufactures a diversified range of products ranging from architectural coatings for homes, offices, hospitals and hotels to sophisticated industrial coatings for most of the industries. The company is a market leader in industrial/automotive segment supplying over 90% of the OEM requirements. It entered into a technical collaboration with E.I. Du-Pont de Nemours & Company Inc., USA and Oshima Kogya Company, Japan for different products. Nipa Chemicals is an associate company which specializes in the manufacture of pre-treated chemicals. Nipa Chemicals is a joint venture of Nihon Parkerizing Company, Tokyo, Japan, and Kansai Nerolac Paints.

Kansai Nerolac Paints registered a 19.82% growth in net profit to Rs 324.7 million for the quarter ended June 2007 from a profit of Rs 271.00 million for the quarter ended June, 2006.

Net Sales for the quarter rose 18.66% to Rs 3175.3 million for the quarter ended June 2007 from Rs 2676 million for the quarter ended June 2006.

Total income rose 19.65% to Rs 3270 million for the quarter ended June 2007 from Rs 2732.9 million for the quarter ended June 2006.

The earnings per share (EPS) of the company stood at Rs 12.05 in the quarter ended June 2007.

Recent Developments
On July 24, 2007, the board of directors approved the setting up of a new water-based paint facility at an outlay of about Rs 690 million at Hosur. This project will be funded by internal accruals.

The company has been allotted land by the State Industries Promotion Corporation of Tamil Nadu Ltd (SIPCOT) at Hosur. The land is proposed to be used for future expansion.

The merger of Polycoat Powders with the company being approved by the Bombay High Court, the amalgamation procedure has been completed.

Future Plans
The company is focusing on increasing its presence in the decorative segment to tap the available opportunity. It has introduced products such as Disney Paints, Beauty Emulsion, Impressions Luxury Emulsion with metallic finishes (first time in India), etc., in the market. Nerolac has stepped up its efforts to increase its presence in the rural market. The company will be setting up a new water-based paint facility in Hosur at an outlay of Rs 690 million. It is also making efforts to strengthen its dealer network to improve sales.

Kansai Nerolac has also entered into many technical collaborations with other industry leaders such as E.I. Du-Pont de Nemours & Company Inc., USA and Oshima Kogya Company, Japan for the company`s different products. It has also introduced some products such as beauty emulsions in the range of 80-100 rupees per liter, which cater to the price-sensitive market. It has also formed an alliance with ITC on its E-Chaupal initiative to improve its presence in the rural market.

Other Information
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