Financial Daily from THE HINDU group of publications
Saturday, Aug 02, 2003
Berger to open Jammu factory in mid-2004
Kolkata , Aug. 1
THE Jammu factory of Berger Paints India Ltd, the company's sixth factory, will be commissioned some time in July/August 2004.
Explaining the rationale for setting up the factory in a trouble-torn region, Mr K.S. Dhingra, Chairman of the company, told newspersons at the end of the company's annual general meeting here on Thursday that the State Government had virtually laid a red carpet for the company for setting up the unit by granting fiscal concessions such as relief in sales tax and excise duty and income-tax refund. The factory, when commissioned, would cater to the north Indian market.
Mr G.S. Dhingra, Vice-Chairman of the company, stated that with the prospects of trade with Pakistan brightening, the Jammu factory would be ideally suited for undertaking exports to that country.
Earlier, while replying the shareholders' queries, Mr Subir Bose, Managing Director, stated that about 10 acres of land at a cost of Rs 65 lakh had already been acquired in Samba in south Jammu for setting up the factory. The work was in progress and the factory, estimated to cost Rs 25 to 30 crore, would mainly produce decorative paints and powder coatings. The capacity would be 24,000 tonnes per annum.
The Chairman reiterated the company's plan to achieve growth through acquisitions, both within the country and outside. He, however, ruled out the possibility of acquiring the closed Jenson & Nicholson because of its huge liabilities.
"Unless the financial institutions come out with attractive packages, we will not look at it," he observed.
Outside the country, Berger, he said, was looking into opportunities in China, Russia, Sri Lanka, Malaysia, Vietnam, Africa (Kenya and Botswana and few other countries) and West Asia. Funding the acquisition would be no problem as cheap credit was available in plenty in the world market.
"We will go whole hog for the right kind of offer but we are yet to come across any such offer," he said. The international merchant bankers would keep us posted from time to time with offers but nothing concrete had materialised as yet.
In reply to a question, he said Berger might have to sell its products under different brand names in some countries. For example, Berger Singapore, which had been acquired by Asian Paints, was active in several countries where Berger India might push its own products but not its brands.
The Managing Director emphasised that the decorative paints and retail business, now accounting for 70 to 80 per cent of the company's business, would continue to be the thrust areas.
"We are in the process of acquiring new technologies and introducing new products, also to penetrate the rural market," he said pointing out that Orica Australia would provide technology for protective coatings and Tigerwerke Lack-u.Farbenfabrik of Austria for powder coatings. The company's Home Décor service, now available in six cities, would be extended to three more cities shortly, he added.
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