Berger Paints India Ltd is setting up a new manufacturing unit in Jejuri, near Pune for automotive and industrial paints in the current financial year.

The company is in the process of setting up its largest unit at Hindupur in Andhra Pradesh, with an initial capacity of 8,000 tonnes a month, which can be scaled up to 16,000 tonnes.

“We are investing about Rs 140 crore in the Hindupur unit and another Rs 40 crore in the Jejuri unit this year,” said Abhijit Roy, Managing Director and CEO, Berger Paints. The investment is being funded from internal accruals. Last year, the company had invested about Rs 80 crore in the Hindupur unit, which is expected to be operational later this year. At present, Berger has a production capacity of around 24,000 tonnes a month, which will be expanded to around 40,000 when both Hindupur and Jejuri units are operational, Roy said.

Currently, the industrial, powder coating and automotive paints account for about 20 per cent of Berger’s sales, while the decorative paints account for the rest.

Berger, the country’s second largest paint vendor, has acquired the India operations of Sherwin Williams for an undisclosed sum in March. The acquisition will strengthen the Berger portfolio of exterior paints and will also enhance its manufacturing capacity by around 2,000 tonnes a month.

“We are retaining the Sherwin Williams brand for five years. The acquisition will enhance our presence mainly in the Pune and Mumbai regions of Maharashtra,” Roy said and expects the integration process to be completed in about 7-8 months and add about a percentage point to its overall marketshare. Further, Roy said the upcoming unit in Jejuri will give the company a competitive advantage as the company has been servicing the industrial consumers in the Western region mainly from its plant in West Bengal.

Besides, the company expects to cater to the automotive units in the West and South through the Jejuri unit.

Results on May 30

Berger Paints is expected to announce its earnings for fiscal 2013 on May 30. For the nine months of fiscal 2013, Berger reported a 29 per cent rise in net profits at Rs 174.6 crore on a revenue growth of 15 per cent at Rs 2,537.8 crore over corresponding period last year.

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