Kolkata, Aug 14 (IANS) Paint maker Akzo Nobel India Ltd (ANIL) on Friday said there will be concerns in the paints industry if rupee continues to depreciate as the benefits of cheaper crude will weaken.
“Certainly, there will be an impact because of devaluation of currency… If rupee was to continually devaluate, then there will be impact. So, the so-called gains of crude will be diminished by the depreciation in currency,” the company’s managing director Jayakumar Krishnaswamy told the media here.
He was responding to a question over the future pricing of paints and the impact on the industry if rupee continues to remain weak.
The paints industry, which uses crude as a key raw material, reaped lower cost benefits this year as prices of crude fell.
“It’s going to be tough for all companies and also for us so we got to find a way to balance the price drop due to oil and the depreciation effect. As we see it, forex drop will have an adverse effect on the overall industry,” he said after the company’s AGM.
He added that cheaper steel imports from China affected the company’s industrial coatings business as the domestic coated steel producers suffered setback in sales.
“Because of cheap Chinese imports the steel industry was impacted. We supply certain industrial coatings to certain categories in the coated steel segments – that was a big impact on the overall consumption… All the coated steel manufacturers had a tough time,” he said.
Krishnaswamy said ANIL has tweaked its strategies to arrest the fall in industrial coatings by bringing in some changes in its logistics flow as well as manufacturing portfolios.
“We have six factories across India so we have been able to rejig our manufacturing portfolios to ensure that we are able to get the best out of it”, he said.
He said the success of the Indian paints industry depends a lot on the reforms and projects the government is bringing and new infrastructure projects will boost the country’s paint industry.
The official also said implementation of the Goods and Services Tax will result in the company to rejig its manufacturing unit’s portfolio and operations.
It is expecting the paints industry to grow by 8-12 percent in the short-run.