The Hindu Business Line : Berger Paints looking for acquisitions in S-E Asia

BERGER Paints India Ltd is working towards acquiring a decorative paints unit in South-East Asia. Beyond stating this, Mr Subir Bose, Managing Director of the company, would not say anything further at this stage because, as he said, the company's earlier effort on overseas acquisition in Africa did not materialise.

"During the last financial year, our talks with the African unit had progressed to a crucial point, but finally fell through. The current negotiation is aimed at getting a niche market player with a technology edge. We hope to close the deal by the end of this fiscal," Mr Bose said after the 80th AGM of the company.

On the domestic front, it appears that Berger has not quite shelved the proposal for equity participation in its automobile paints business as such. "A specific joint venture proposal with an auto major did not click," Mr Bose said, but he did not rule out the possibility of such a partnership in future.

The company is set to invest around Rs 30 crore during 2004-05 on capacity expansion and additions to its plants.

About Rs 20 crore is to be spent on its Jammu and Goa plants.

"The Jammu unit (latest among a total seven), has started production of water-based paints in the later part of March this year, the solvent-based paints production at the facility would begin in mid-August and the output of powder-base items are scheduled to start in March 2005," Mr Bose said.

The Goa unit, which came to Berger through merger of Rajdoot Paints in 1998, has been seeing capital infusion and capacity hike.

"In the last two years, production capacity at the unit has been hiked to 1,200 kilo litre (kl) per month from 200 kl per month. More manpower has also been added," Mr Bose said.

At the automotive coating unit at Rishra in West Bengal, a new 1,000 kl per month decorative paint facility has been set up at a cost of Rs 3 crore.

Berger's foray into the insurance brokerage business would be through a wholly owned subsidiary, Avani Insurance Services, which it recently acquired at a cost of Rs 50 lakh. Berger would use its 12,000-strong dealer-network would be leveraged to market insurance products.

However, Berger is reconciled to the delay in its entry into pension fund and insurance business through a joint venture with Principal Financial Group of the US, Punjab National Bank and Vijaya Bank.

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