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BNB Coating India Pvt Ltd, a joint venture between Berger Paints India Ltd and Japan’s Nippon Group, is set to enter a new line of business.
Earlier this week, Berger and Nippon announced plans to transfer their three- and four-wheeler automotive colour coating businesses to the joint venture. The deal, according to industry insiders, is likely to pave the way for higher revenue and profitability for the joint venture.
Following the cash-and-equity deal, BNB Coating will see a jump in its turnover to ₹110 crore, against the ₹50 crore in revenues it makes at present out of the plastic substrate coating business, Berger Paints Managing Director Abhijit Roy told BusinessLine.
“The deal value is currently being worked out and should be wrapped up in a month’s time,” he added.
Nippon Paints (India) Pvt Ltd and Berger have their automotive coating manufacturing units in Bengaluru and Howrah, respectively.
The deal will be designed such that Nippon and Berger’s stakeholding in the joint venture will remain at 51:49. Nippon, which has high-end technology to produce automotive coatings, supplies them to Toyota passenger cars and SUVs in India.
As the joint venture will have additional capacity, Nippon’s supply agreement could be extended to other foreign carmakers in India such as Honda, Nissan, Volkswagen and Suzuki. BNB Coating posted a net profit of ₹4.46 crore in 2014-15.
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