Berger Paints India Ltd. has lined up investments for two of its units in West Bengal, making it the first such dose of capital to flow into the State, from where the company began its journey nearly a century ago. “We are planning two doses of investment totalling ₹60 crore for our units in Howrah and Rishra,” said MD and CEO Abhijit Roy said. The Rishra investment would include a ₹22 crore investment for its first plant for making colourants on which BIL spends ₹100 crore annually.
Production in 2018
The 2,640-kilolitre plant will start production by early 2018 entailing an initial 10% savings on input cost, according to Mr. Roy.
The balance amount would go for the emulsion unit in Howrah. A company official said that this investment could have been doubled had the company got about two more acres for the unit. These investments have come on the back of improved demand for paint in this region and are part of the ₹200-crore capital investment for the entire year.
Mr. Roy said that raw material prices (titanium dioxide and monomer), after increasing by 9% last fiscal, had stabilised now and the company was looking at increased profitability for the rest of the fiscal year. “We took two prices increases totalling 5.5% — one in March and another in May 2017,” Mr. Roy said. GST roll-out also will not impact the company substantially as its tax rates were now 28% against 27.6 earlier.
Berger’s first quarter results announced on Friday showed an 8.8 % increase in its operational revenue, which rose to ₹1262.5 crore and a 7.8% drop in its net profit for the period ending June 30, 2017. Costs of materials consumed increased by 17% during the quarter.
Mr. Roy said this was mainly due to the fact that the May price rise came a month after the peak April month for sales. This hit, alongside de-stocking on account of GST in June, also dented the bottomline.
