Berger Paints looking for buys, both at home and abroad

Berger Paints India Ltd is looking for “suitable” acquisitions.

Mr Abhijit Roy, the new Managing Director and Chief Executive Officer, told Business Line that merchant bankers had been told to look for potential targets — both in the country and abroad.

“In the overseas market, we are looking for acquisition of technology. However, in the domestic market any acquisition move should be driven by the possibility of increasing market share,” Mr Roy said.

The company is implementing a number of greenfield and brownfield capacity addition programmes to increase domestic production from 24,000 tonnes in 2011-12 to 44,000 tonnes in 2012-13. The total project cost is estimated at Rs 250 crore.

The No.2 Indian paint company has entered Poland through an acquisition which boasts of energy efficient and protective external insulation finishing system. Berger Paints is also present in Russia and Nepal through subsidiaries.

“We are definitely looking at opportunities, but at the right price. Though the slowdown effect has affected players globally, the valuations have not really come down from the perspective of buyouts,” he said.

In India, slowdown has not caught up with the paint industry as yet. But indications are that the second quarter could witness some pinch.

“In April, May and June our volume growth was moderate, just below the double digit figures. In May we implemented a price hike of 3 per cent (on an average across the portfolio). So far the prices are holding good,” the CEO said.

Positive on second half

“If things go right, the second half of the financial year, however, should turn out to be positive,” Mr Roy added.

During 2011-12, the company reported a net profit of Rs 177.40 crore on a turnover Rs 2,662.10 crore.

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