Berger Paints Mulls Acquisitions

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"We are looking at acquisition as one of the ways of growing," Subir Bose, managing director, Berger Paints, said. He did not rule out possibilities of greenfield ventures, however, he refused to divulge any details of the company's plans at this point.

Merchant banking sources said Berger is in talks with a Calcutta-based company. The sources said Berger is looking for external funding in the range of Rs 40-50 crore for its acquisitions. However, the company has not made any budgetary allocations for acquisitions as yet, Bose said.

Berger has recently acquired 100 per cent stake of the Calcutta-based Jenson & Nicholson's wholly-owned subsidiary in Nepal -- J&N (Nepal) Pvt Ltd. Through the acquisition, Berger has obtained the rights to use J&N's brands Brolac, Robbialac, Armour Quartz and Special Effects in Nepal.

In Bangladesh, the company has a strategic foothold by way of its on-going technical assistance agreement with Berger Bangladesh. According to the company, this agreement gives Berger a strong platform for increasing export of its high-tech products to Bangladesh.

The company, as a growth strategy, is now looking at possibilities of enlarging its presence in the Saarc countries. Sources indicate Berger is looking at possibilities of acquisition beyond the region as well.

Meanwhile, Berger has entered into technical licence agreements with Nippon Paint Co, Japan and Orica Australia. According to the company, while the association with Nippon Paint will help Berger develop and market sophisticated coatings for the automotive sector, that with Orica will help it strengthen its position in the protective coatings' segment.

According to analysts, the paint industry is headed for a consolidation. "You'd soon see some of the big companies like Asian Paints, Berger and Goodlass Nerolac acquiring the relatively smaller players. With most paint companies registering a below ten per cent growth and foreign companies entering the country, it would be a win-win situation for both the majors and the marginal players in the market."