Berger Paints banks on spurt in government's infra spend

Berger Paints India is betting big on a spur in infrastructure spend by the government and will not only launch new products in coatings and construction chemicals but also reformulate some decorative products, a top company official said here on Monday.

The company is also in talks with the Assam government to set up two plants which will improve its market standing in the northeast region considerably.

"Increase in infrastructure investment is expected to be one of the crucial factors for sustaining strong growth during the current (fiscal) period," company chairman Kuldip Singh Dhingra said here during its AGM.

He estimated the infrastructure investment would surge to 12.1 percent of the country's GDP by the fiscal year ending March 31, 2020.

"Monsoon so far has been good... The inflation, particularly the wholesale index, is in control and even independent agencies opine that India's growth will be faster than China in 2016," Dhingra said.

Internationally, the Indo-Iran deal is expected to lower oil prices and the Greece bailout programme undertaken may help boost market confidence.

The company has planned a series of new product launches with "unique properties" in texture and wood coatings and construction chemicals business verticals.

The company will also reformulate some of its decorative paints products for better finish and durability and introduce new offerings in the water - based and enamel - based ranges.

Dhingra said theAcompany is expecting a rise in its production efficiency, reduction in cost of doing business and improved standard of living of the common man to boost demand of paints.

"We are in talks with the Assam government to set up two plants - one near Guwahati and the other in Tezpur," Dhingra told mediapersons after the AGM.

The two units will have a joint minimum monthly capacity of 3,000 tonnes.

Company officials said a minimum investment of Rs.60 crore will be made and a minimum 12 acres is needed.

While the plant near Guwahati will be owned by its British Paints division to manufacture paint under the similar brand name, the plant in Tezpur will do the same for under the Berger brand name.

"I think production will commence in the next fiscal. The new plants will strengthen our presence in north - East considerably," he said.

He said the plants will be making water-based products initially and then it will be scaled up to include solvent based products as well.

The company's British Paints division contributes Rs.400 crore to its annual revenue.

The official said tax holiday for the new plants is also under consideration.