Asian Paints, the country's largest paint company, has decided to pull out of Asian Paints (Mauritius) by divesting its entire 89.6 per cent stake to a Mauritius-based firm for an undisclosed amount.
In a press release issued on Friday, Ashwin Dani, vice chairman and managing director, Asian Paints, said the divestment decision followed the poor show of the subsidiary and the company's decision to grow in the emerging markets.
The subsidiary incurred losses in the past several years due to the lack of growth in the paints market in Mauritius. "Further, the subsidiary's contribution to overall group sales is insignificant," Dani said, adding that the company intended to grow in the emerging markets.
He further said the exit from a loss-making subsidiary would have a positive impact on the overall international business of the company.
After exiting Mauritius, Asian Paints will have manufacturing facilities in 22 countries with 28 manufacturing facilities across the Caribbean, Middle East, South East Asia, South Asia and the south pacific region.
Asian Paints has also announced the setting up of a production facility for industrial liquid paints at Taloja, Maharashtra. The first phase of the project, with a capacity of 8,000 kilo liter, would involve a capital expenditure of Rs 14.88 crore (Rs 148.8 million).
"The company is very optimistic about the potential of the industrial coatings. The facility will help service the changing requirement of the market," Dani said. Asian Paints is the Asia's fourth largest paint company. It is among the top 10 decorative paint maker in the world.