J & N Shelves Coatings Unit Hive-Off

Paints major Jenson & Nicholson (India) (J&N) has shelved plans of hiving off its industrial coatings division. This follows despite the company receiving shareholders' approval for the purpose at its extraordinary general meeting.

Confirming the development, JS Chatterjee, joint managing director of J&N, said, the company's failure to find a suitable partner for the division has led to this decision. The industrial coatings division with a turnover of Rs 35-40 crore would continue to be a strategic business unit of J&N. "With this turnover, it would not be feasible to run it as a separate company without a suitable partner," explained Chatterjee.

 

Asian Paints and Chugoku, Japanese marine paints giant, which also has a 50 per cent interest in Jenson Chugoku, were understood to have evinced interest in the division. However, industry sources said, the deal did not materialise on pricing issue.

In industrial paints segment, Jenson controls a meager 8 per cent of the market as compared to a whopping 40 per cent of Goodlass Nerolac and 16 per cent of Asian Paints and 14 per cent of Berger Paints India Ltd.

The company has also put plans of tapping the capital markets on hold. J&N had decided to double its equity base through a fresh issue of Rs 2.5 crore equity shares with a face value of Rs 2 each. Chatterjee said, "We had received clearance from the Securities and Exchange Board of India (Sebi), but have decided not to approach the markets now, given the current situation of the stock markets."

Meanwhile, J&N has recently formed a marketing joint venture with Snowcem (India), a leader in exterior paints segment. The joint venture is aimed at bringing the selling arms of both the companies for all decorative products together as a market force.

Chatterjee said, "The joint venture will be called Colour Union International Pvt Ltd. The name has already been registered."

Colour Union will endeavour to export to the South Asian Association of Regional countries (Saarc) countries. J&N had an insignificant presence in the Bangladesh market, prior to this. Chatterjee expects inorganic growth through this venture.

J&N's tinting mechanism, Insta Colour, would also be transferred to Colour Union. The Snowcem and J&N outlets would henceforth stock products from both the houses.