Calcutta: Berger Paints has lined up investment of Rs 280 crore over two years to expand capacity in Uttar Pradesh and Maharashtra.

The company is coming up with a greenfield unit at Sandila industrial area in Uttar Pradesh at an investment of Rs 200 crore and another Rs 80 crore is earmarked for expansion at the company's existing unit at Jejuri in Maharashtra.

"We will soon commence work for the installation of water and solvent-based decorative, industrial and protective coatings, resin, putty, emulsion and construction of chemical manufacturing facility at an estimated investment of Rs 200 crore at Sandila in Uttar Pradesh. The project is likely to be completed in 2021, subject to the availability of approvals," said Berger Paints chairman Kuldip Singh Dhingra in his address to shareholders at the company's AGM on Friday.

"The phase 2 expansion of the automotive and general industrial protective coatings plant at Jejuri has commenced. The plant will have an estimated capacity of 27,000 kilolitres (kl) of paints per annum and 12,000mt of resin per annum. This is likely to be completed in 2019-20," said Dhingra.

"Jejuri also has a powder coating plant and a fourth line with an estimated capacity of 325mt per month is expected to be installed during the year," he said, adding the company is optimistic that automotive refinish pains will have considerable demand in a market estimated at around Rs 2,000 crore.

He said Berger Paints had encouraging trials from the memorandum of understanding with Rock Paint of Japan, and the process of forming a joint venture for automotive refinish paints was underway.

The city-based company will hold 51 per cent in the proposed joint venture, while Rock Paint will own the rest.

Berger Paints CEO Abhijit Roy said in the wake of the GST cut on paints to 18 per cent from 28 per cent, the company has decided to pass on the benefits to its customers. In the pre GST regime, the tax on paints was 26-27 per cent.

The paints firm has reported a consolidated net profit of Rs 134.88 crore in the first quarter of 2018-19 against Rs 112.88 crore in the corresponding quarter a year ago.