Berger Paints, the country’s second-largest paints maker, will keep its focus on its core business with no diversification plans right now, managing director & CEO Abhijit Roy told FE.
His comments come at a time when the company’s name has been doing the rounds as one of the top contenders to acquire a majority stake in AkzoNobel.
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Roy said the Kolkata-based paints major, which has completed 100 years of its existence, proposes to double its revenue to Rs 20,000 crore by FY29 from Rs 10,000 crore now, mainly through organic measures.
“We are clear that we want to stay focused on paints and coatings, waterproofing and construction chemicals,” Roy said. “There is no plan to enter adjacencies such as bathroom tiles and fittings, modular kitchens and fixtures. That is not our core competency. And we do not intend to diversify into these areas,” he added.
According to industry experts, a steep valuation demand may have prompted Berger to drop out of the race to acquire AkzoNobel India.
Sajjan Jindal’s JSW Paints, in partnership with private equity firm TPG, adhesive maker Pidilite Industries and Indigo Paints are among the frontrunners for the business, according to sources.
The Dutch parent of AkzoNobel India, which owns a nearly 75% stake in the company, has been looking to offload its shareholding in the firm at a deal valued at $2.5-3 billion (Rs 20,000-24,000 crore), sources said. However, players are willing to pay only around half the asking price at Rs 10,000-12,000 crore ($1.2-1.4 billion), the sources said.
Roy further said Berger will focus on expanding capacity and distribution to counter growing competition from new entrants such as Birla Opus. The latter has already commissioned four plants within a year and is on its way to launching its fifth factory at Mahad in Maharashtra.
Berger, which currently has a capacity of 95,000 tonne per month, will set up two new plants or greenfield projects at West Bengal and Odisha each and is working on a brownfield project at its Hindupur factory in Andhra Pradesh. The projects, which will be completed in the next 2-3 years, will be done at an investment of Rs 2,000 crore.
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