Asian Paints has entered into a binding term sheet for the setting up of a joint venture in Fujairah, United Arab Emirates (UAE), with Riddhi Siddhi Crusher & Land Transport, Fujairah, UAE, Associated Soap Stone Distributing Company Private Limited (ASD), India, and others.
The proposed joint venture would be set up with 60:40 partnership between the company and the parties, and would carry out the business of manufacturing and exporting white cement and white cement clinker, on such terms as may be mutually decided by the parties. This is subject to due diligence and obtaining necessary regulatory and other approvals. Riddhi Siddhi holds mining permits for high-quality limestone mines in Fujairah, UAE, and is a supplier of limestone. ASD (Golcha Group) is one of the trusted suppliers of certain raw materials to Asian Paints.
The initial capacity of the manufacturing facility would be 265,000 tons-per-annum. In addition, clinker grinding units would be set up in India as well. The overall investment would be approximately Rs. 550 crores, to be invested over the next two years. The cost of the project would be funded through a combination of equity funding by Asian Paints and the parties, and external debt financing.
Asin Paints manufactures paints and undercoats as part of its integrated coatings and allied products offerings. White cement is the key raw material for some of the powder products and undercoats, like putty, which is a leveling powder product for various substrates. At present, the company purchases white cement for manufacturing powder products and undercoats in India. The manufacturing facility proposal is a move towards fulfilling internal white cement consumption, and towards providing white cement as a finished product. This would ensure new opportunities for Asian Paints, as well as both a sustainable cost advantage and an assured supply of good quality raw materials.
For more information, visit: www.asianpaints.com.