Close on the heels of acquiring Jenson & Nicolson (Nepal) and auto and industrial coating business from ICI Paints, Berger Paints on Wednesday said it might pick up stake in its technical collaborator Nippon Paints of Japan.
The company, which aims to grow organically and through acquisitions as well, has earmarked more than Rs 100 crore (Rs 1 billion) for acquisitions, especially in automotive paints business, Berger Paints managing director Subir Bose said.
"We have decided to spend in excess of Rs 100 crore (Rs 1 billion) for acquisitions as we have far more reserves. We may pick up some equity in Nippon Paints," he said launching 'Illusions' range of paints.
Berger Paints, the third-biggest paint manufacturer in India, has technical collaboration agreement for automotive paints with Nippon Paints and DuPont Performance Coating.
The company acquired Jenson & Nicholson (Nepal) and bought out the 50 per cent holding of ICI Paints in its joint venture -- Berger Auto and Coating.
"To be a serious player in the automotive paints industry, we have to have equity participation with one of the formidable international automotive paints companies," he said.
The company would also pump in Rs 30 crore (Rs 300 million) to set up a manufacturing base in Jammu.
Asked whether Berger Paints would hive off the automotive paints division into a separate entity, Bose said: "We have had several rounds of talks with Nippon for equity tie-up."
Berger Paints eyes 12-15 per cent topline growth this fiscal over sales of Rs 680 crore (Rs 6.8 billion) during 2002-03, mainly spurred by rising sales in the home decorative paints.
In the Rs 5,000 crore (Rs 50 billion) domestic paints market, Berger Paints is the second-biggest player in the decorative paints business while the home paints category contributes 80 per cent to its sales, he said.
There would be a remarkable growth in the home paints business due to growing disposable incomes and a rev up in building construction due to tax breaks while the industrial category would grow at a relatively slow pace, he said.
The company would also strengthen its network of 65 company-owned stores and stock points across the country.
