Asian Paints Ltd has announced regarding the paint manufacturing plant of the company situated at Sriperumbudur, Tamil Nadu.

The Sriperumbudur plant commenced manufacturing of water-based paints in the year 2005 and commenced manufacturing of water-based polymers in the year 2007.

The Sriperumbudur plant of the company has been operating with the required licenses and statutory approvals.

While commencing the manufacture of water-based polymers in the year 2007, Asian Paints based on the then existing applicable rules, notification, and guidelines, including the interpretation of the Environment Impact Assessment Notification, 1994 and 2006 (EIA Notification), believed in the bona fide that Environmental Clearance (EC) was not applicable for a water - based polymer manufacturing facility.

In the year 2016, as a part of the regulatory approval process for the proposed expansion of the manufacturing capacities at the Sriperumbudur plant, out of abundant caution and considering the ambiguity in the legal framework, Asian Paints had applied for prior EC from the State Environment Impact Assessment Authority, Tamil Nadu (SEIAA) under the EIA Notification. The application was being reviewed by SEIAA and State Expert Appraisal Committee, Tamil Nadu (SEAC).

Further, based on request from SEIAA in the year 2019, the Tamil Nadu Pollution Control Board (TNPCB) sought clarity from the company and the Ministry of Environment, Forest & Climate Change (MoEF&CC) on the applicability of EC under the EIA Notification for manufacture of water-based polymers at the Sriperumbudur plant.

In response to the clarification sought by TNPCB, the MoEF&CC vide Office Memorandum (OM) dated 21st March 2022 clarified the definition of "integrated paint industry" to be - any paint industry engaged in the manufacture of ingredients of paint such as resin, lacquer, waterbased polymer, etc., besides formulation of paints, and it shall require prior EC in terms of EIA Notification.

Based on the aforesaid OM dated 21st March 2022, the SEAC at its meeting held in October 2022, classified the non - availability of EC for manufacture of polymers at the Sriperumbudur plant as not meeting the requirements of the EIA Notification 2006.

The SEAC at its meeting held on 25th August 2023, noted in the minutes of the meeting published on the website of MoEF&CC for environment clearance, on 23rd September 2023, the observations of the on-site inspection report recognising the efforts taken by the company over the years in enhancing the green cover and conserving biodiversity within the Sriperumbudur plant, and further has recommended to the SEIAA to grant the EC to the Sriperumbudur plant subject to remittance of Rs. 8.82 crores, in the form of bank guarantee to TNPCB. The aforesaid amount shall be utilised by the company to carry out works assigned under ecological remediation, natural resource augmentation and community resource augmentation within a period of one year from the date of issue of the EC. It may be noted that the recommendation of SEAC is subject to finalisation by SEIAA.

The financial impact is limited to the aforementioned remittance amount only. There is no operational or other impact on the company.