Berger Eyes Africa, Puts Russia On Hold

Berger Paints India Ltd, the Rs 427-crore paints major, is scouting overseas expansion opportunities in Africa, and has put its plans to invest in a manufacturing base in Russia on hold, in view of the

instability in the Russian economy. The company intends to execute its plans in Africa through a wholly owned subsidiary instead.

Speaking to newspersons after the company's 75th annual general meeting here yesterday, K S Dhingra, chairman, said, "Two countries are being examined in Africa for setting up a manufacturing base. The Russian plans are at present on hold but the project has not been shelved. The company would like to maintain a low cost presence in Russia for sometime till the rouble stabilises."

 

However, while the company was planning to enter the Russian market through a joint venture, in the case of Africa the company would prefer to operate through a wholly owned subsidiary.

In the domestic market, the company is gearing up to create a larger presence in the industrial paints segment with an entry into the coil coatings, following the merger of Rajdoot Paints which has brought with it a 49:51 joint venture with Swedish coil coatings major Becker Industrifarg.

Addressing shareholders earlier at the annual general meeting, Dhingra said, "Berger aims to play a leading role in the coil coatings sector, which is a new emerging segment in the country with wide ranging applications in the white goods segment."

The company has also entered into a technical collaboration with Nippon Paint Company, Japan, which would service the company's entry into the automotive and OEM sector.

According to Dhingra, following the amalgamation of Rajdoot Paints, the company's installed capacity has increased to satisfactory levels and for the time being the company has enough capacity to sustain market demand.

"There are no plans to increase capacity for the next 3-4 years", he said.

Berger has gained two new factories following the amalgamation, one in Secunderabad, Uttar Pradesh, and another in Goa.

The company needed a manufacturing base in the northern region and the merger has provided that opportunity.

The Goa unit like Pondicherry enjoys the benefits of income tax and sales tax holidays and with five factories now strategically placed in the north, south, east and west, the company is better positioned to grow its market share, which is currently 16 per cent, said Dhingra.