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Berger Paints India Ltd on Wednesday has inked an MoU with the Government of Stavropol Region, Russian Federation, for setting up an industrial coatings plant in the region.
Berger would also conduct a feasibility study to be completed by this year for setting up the plant.
The initial capacity will be 3,000 tonnes a year, which can be scaled up to almost 50,000 tonnes a year, said Berger Paints India Chairman KS Dhingra. Around $5 million will be invested to set up the plant in Russia.
“The land cost for us was not much as the Government has given us a nominal lease till 2030,” he said.
Stavrapol is an industrially developed area in the southwest corner of Russia with an automobile manufacturing facility, apart from other industries. It has allocated 6 hectares to Berger for the facility.
“Russia is a growing market and we plan to cater to the demand of the industry in Stavropol and rest of the country based on the results of the feasibility study,” he added.
On why the company is setting up manufacturing facilities abroad at a time when the Prime Minister Narendra Modi has called for ‘Make In India’, Dhingra said, “Post setting up our facility in Hindupur, Andhra Pradesh, we have taken care of the requirement for the next five years. We will invest in India as much as is needed.” Also exporting from India to other countries would mean logistical issues as paint is bulky, he added.
The company has plants in Bangladesh, Nepal, Poland. The overseas turnover accounts for less than 5 per cent.
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