Berger Paints plans to expand its capacity to 1.6 lakh tonnes per month from the current 95,000 tpm and double its revenue to ₹20,000 crore in six months.
The company plans to set-up three greenfield plants in West Bengal, Odisha, and the third in the western region will be a tussle between Gujarat and Maharashtra.
“We plan to invest ₹2,700 crore in greenfield and brownfield expansion projects over the next 5-6 years to maintain the annual growth rate of 14 per cent,” said Abhijit Roy, Managing Director, Berger Paints.
The company has taken 100 years to achieve a turnover of ₹10,000 crore last fiscal and enhance it further to ₹20,000 crore in next six years.
The expansions will be primarily funded through internal accruals, said Roy. The company has set a revenue target of about ₹11,700 crore for FY24 against ₹10,600 crore achieved in the previous fiscal.
The company plans to shift the Howrah plant to Panagarh as the surrounding region has become a residential area. It also plans to merge its subsidiaries STP with itself in six months and Sahoo Coatings in two years. Both these assets were acquired recently.
The company had attained a 20 per cent market share in the June quarter and has become the fourth-largest in Asia after Nippon, Kansai, and Asian Paints.
Berger Paints has hiked prices last December and has been offering discounts as crude prices have fallen ever since.
Even if crude oil prices rebound to $100 per barrel, the company is confident of maintaining margins at 18 per cent in the coming quarters.
Berger Paints plans to enhance its dealers’ network in the western and southern markets as production capacity increase.
“We are the leaders in protective coatings and industrial paints. With lots of factories being set up on back of China plus one policy, the demand in this space should grow faster,” he said.
Normally, industrial and decorative paints are almost equal globally, but in India, it is very distorted in favour of decorative. Gradually this is going to change, he added.
On the growing competition, he said the company is already competing with the world’s best MNCs, such as Kansai, Nippon and Akso, and will do so with new players.
“There may little bit of slowdown in growth with increased competition but construction chemicals and industrial paints can easily make up for slowdown in decorative paint slowdown,” he said.