Asian Paints Eyes Shalimar

Asian Paints (India) Ltd is eyeing the Rs 4,500 crore O P Jindal group-controlled Shalimar Paints Ltd (SPL) for a possible takeover.

Ashwin Dani, vice-chairman of Asian Paints, told Business Standard that the company was looking at various acquisitions and Shalimar Paints was one of them. "Currently, we are studying the product range of Shalimar Paints," he said.

However, SPL managing director S L Aggarwal was not available for comment.

Asian Paints' interest in the Calcutta-based SPL comes close on the heels of the rumour that SPL's negotiations with Johannesburg-based Barlow have fizzled out. Barlow has interests in paints, pharmaceuticals, varnish and coal mines.

 

Berger Paints India Ltd is also said to have evinced interest in Shalimar. Subir Bose, managing director of Berger, however, clarified that though Berger was interested in Shalimar, no formal bid was made. According to industry sources, talks with Berger failed due to pricing issues.

At present, SPL is managed by Ratan Jindal, promoter of Jindal Strips Ltd. The Jindals hold 44 per cent in the company, while Hong Kong-based Girish Jhunjhunwala also has a stake in SPL.

The Jindals, for a long time, has been trying to exit the paints business. The company has not been investing substantially in its brands or expanding the distribution network.

SPL has brands like Superlac (first quality synthetic enamel), Diamond (second quality synthetic enamel), Superlac Acrylic Premium (premium synthetic enamel) and Husain, named after painter M F Husain.

Shalimar is also planning to introduce the tinting mechanism by this year-end.

The company had posted a turnover of Rs 130 crore in the last fiscal and is expecting to increase it to Rs 140 crore by 2001. While Asian Paints enjoys a 40 per cent market share in the organised Rs 2,500 crore domestic paint industry, Shalimar has a very small share and is primarily known for its marine paints in the industrial segment. Asian paints is followed by ICI Ltd. Other major players are Goodlass Nerolac and Berger-Rajdoot merger, which recently also acquired Jenson & Nicholson Nepal for around Rs 4.57 crore.

The condition of the paint industry in general, however, continues to be dismal in terms of consumption, compared to world standards.

And the eastern region consumes the least.