Berger Looks At Buyouts In Sri Lanka, Africa

The country's second largest paints company has appointed local merchant bankers to firm up acquisition plans, Subir Bose, managing director, Berger Paints said. He refused to divulge the names of the buyout targets and the merchant bankers. He also did not specify any time frame for the deals to come through.

Explaining the company's decision to expand operations in Africa, Bose said: "The per capita consumption of paints in these countries is higher than in India. These markets also offer good growth opportunities."

K S Dhingra, chairman, Berger Paints said: The company is negotiating with the Russian government for a 75 per cent stake in state-owned companies. "We have decided that we are not going to settle for anything less than 75 per cent, but the Russian government is unwilling to part with more than 51 per cent. But so far as the Russian market is concerned, we are pretty impressed with possibilities there," he added.

 

Bose said, acquisition in Sri Lanka is higher on the company's priority list because it is easier to service markets closer home, but in case acquisition possibilities emerge in Africa or Russia, the company will go ahead immediately.

Meanwhile, Berger Paints has shelved its plans of buying out a paints company in India for which it was seeking external funding in the region of Rs 50 crore, Bose said.

However, the company is still on the lookout for acquisitions inside the country. Dhingra said: "Acquisitions in India will be in regions where the company does not have a sufficiently strong presence, or if the acquired company brings along niche products which we do not have."

On the operational front, Berger is trying to boost its industrial paints business which accounts for 25 per cent of the total paints market in India. Dhingra said: "Globally, industrial paints account for 40 per cent of the total paints market. The market share of industrial paints in India is only 25 per cent, but over a period of time, it is going to increase and come to international standards. We are hence trying to step up our industrial paints business."

Besides, the company is also trying to introduce new speciality products. It has already tied up with two foreign companies, Oreka, Australia, and Nippon, Japan. Dhingra said, currently, the company is trying to assimilate the technologies obtained from these companies.