Companies

Berger Paints bets on franchisee model of business

Bouyed by the success of the franchisee model of business that it test-marketed in Tamil Nadu a year back, Berger Paints India is planning to launch 300 such stores by 2013, company Managing Director Subir Bose said.

He said here at a press conference that over the last one year, 50 franchisee stores have been in operation in Tamil Nadu, the fastest growing paint market in the country which also has the highest per capita paint consumption.

The company which had a Rs.2,000 crore turnover last fiscal (including a Rs.1,600 retail sale), feels that Rs.100 crore additional turnover can be raked in from this new retail initiative over the next two years.

He said that this format allowed buyers to have a mall experience while buying paints through exclusive stockists, who could offer a feel of the product besides giving advice on paints.

He said that the company which has the second highest market share after Asian Paints was a Kolkata-based MNC with a presence in Russia, Nepal and Poland. However, it was not looking at any more acquisitions overseas. “Consolidation is our main agenda now,” he said.

The company has a capacity of 2.5 lakh tonnes spread over seven units in West Bengal, Uttar Pradesh, Himachal Pradesh, Jammu and Kashmir, Andhra Pradesh and Gujarat. It will commission within two years a new unit in Andhra Pradesh.

On the initiatives being taken by Berger to produce green lead-free paints, Mr. Bose said that the Indian Paint Association was holding discussions with the government for evolving a set of standards for the paint industry which would be on the lines of those prescribed by the World Health Organisation.

The Rs.15,000-crore paint industry comprises 5,000 units in the unorganised sector which account for 30 per cent of the market. “Switching over to new norms like making lead-free paints is difficult for these units as livelihood issues are involved,” Mr. Bose said.

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Printable version | May 13, 2021 6:13:59 PM | https://www.thehindu.com/business/companies/Berger-Paints-bets-on-franchisee-model-of-business/article15524724.ece

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