Asian Paints Ltd has commenced commercial production at its 1.5 lakh-tonne vinyl acetate ethylene (VAE) plant in Gujarat, a step that advances the country's largest paint maker's backward integration into critical raw materials, according to a report by CNBC-TV18.

In the latest trading session, shares of Asian Paints Ltd ended at ₹2,454.00 on the BSE, up by ₹35.00, or 1.45%.

The facility, located at Dahej in Gujarat, was announced in 2022 as part of a greenfield project to manufacture VAE emulsions and monomers. VAE emulsion — produced by combining vinyl acetate monomer with ethylene — is a key ingredient in water-based paints, the dominant category in India's decorative paint market. Producing it in-house is intended to reduce Asian Paints' dependence on imported emulsions and strengthen control over raw-material supply and costs.

The milestone arrives as India's decorative paint sector goes through one of its most competitive phases in years, with new entrants such as Grasim Industries' Birla Opus scaling up their presence in a market traditionally led by established players. For incumbent manufacturers, control over key inputs and costs has become an increasingly important lever, which is where the Dahej facility fits into Asian Paints' broader strategy.

The start of commercial operations marks the transition of the project from the construction phase into production, giving the company an installed capacity of 1.5 lakh tonnes (150,000 tonnes) of VAE. How quickly the plant ramps up toward full utilization, and the pace at which in-house output replaces imported emulsion volumes, will be operational markers to watch as the company integrates the new supply into its paint production.

Asian Paints is India's largest paint company by revenue. The Gujarat plant is one of the company's most significant raw-material integration initiatives, aimed at supporting its core decorative paints business.