Berger Paints India Ltd. (BPIL) is eyeing a few Russian paint companies for probable acquisition.
These firms are in the decorative paints’ segment, which is BPIL’s largest business. It may help scale up BPIL’s existing operations in Russia, according to sources.
Expanding footprint
Tapping new segments and verticals and expanding footprint through mergers and acquisitions are among the areas that the company has identified for increased operational efficiency, according to its latest annual report .
BPIL chairman K. S. Dhingra and MD and CEO Abhijit Roy, however, declined to comment on the matter, while addressing a post-annual general meeting press briefing. However, in a regulatory filing, the company said its board “recognised that the company is considering investment opportunities in Russia to complement its existing operations . However, no decision has been taken in this regard.”
BPIL operates a decorative paints unit – Berger Paints Overseas Ltd. (BPOL), Russia, which is a wholly owned subsidiary of Berger Cyprus Bolix SA Poland. BPOL faced an impairment loss of ₹28.6 crore in 2018-19. Mr. Dhingra said this was mainly on account of rouble’s weakness. “It is now gaining strength and we may invest in an industrial paints facility,” he said. Mr. Roy told the shareholders that the unit was doing better now.
On the impact of the auto sector’s slowdown on BPIL, Mr. Roy said the business had countered this through forays into new accounts “where BPIL was not present.”
“Things are not looking healthy in the (auto) sector now, however this sector has a single-digit share in BPIL’s turnover,” he said.
He said that the stagnation in the real estate sector had not impacted BPIL as it was present mostly in the repainting segment. “The luxury realty segment is facing slowdown.. affordable housing and other segments are doing okay,” he observed.
Mr. Dhingra said that in the recent months, BPIL had invested about ₹75 crore in West Bengal’s Rishra unit . This included an emulsion unit, already commissioned and a colourant unit, which would be commissioned in December.
