Asian Paints announces growth strategy

Tuesday, 17 December 2002, 08:00 Hrs
Printer Print Email Email
Mumbai: Asian Paints Limited (BSE: ASPN.BO) is transforming itself to become a major world player in the decorative paints business with particular focus on emerging markets following its acquisitions of controlling stakes in Berger International Limited ("Berger International") of Singapore and SCIB Chemical S.A.E. ("SCIB") of Egypt. The total investment made by the company in both these acquisitions amount to around US$ 16.8 million (S$29.6 million). Asian Paints announced that it would focus on emerging markets of the world for growth and also that Berger International will be the main growth driver for Asian Paints' international operations. "Following the acquisitions this year we are among the top ten decorative paint companies in the world " said Jalaj Dani, Head of international operations of Asian Paints and newly appointed Chairman of Berger International. "The emerging markets has 50% of the world's population and this is where we see the potential upside as we seek to draw more efficiencies out of the acquisitions we have just completed," he said in a statement. Focusing on the aspect of increasing shareholder value in Berger International, Dani said: "In Berger International, Asian Paints will focus to increase shareholder value by further improving the supply chain management in the subsidiaries (Asian Paints' supply chain management is considered the best in India servicing around 14,500 dealers directly from 70 sales locations and manufacturing over 2,500 stock-keeping units (SKUs). "Further, the company will implement cost structures in Berger's operations worldwide for increased plant efficiencies and increased asset productivity. It will focus to improve working capital management through various initiatives and introduce information technology in areas of operations where essential. Asian Paints will innovate and develop new products for the individual units of Berger International to boost top-line sales. We are confident that all these measures will reflect positively on the operations of Berger International," he added. Dani said, "Besides the acquisitions in Singapore and Egypt, Asian Paints have just commissioned in September '02 a new greenfield venture in the fast-growing Bangladesh market. This is Asian Paints' largest greenfield venture. Low per capita consumption of paints in Bangladesh, vast potential to upgrade the market, limited product range, increased urbanisation and consistent GDP growth have been some of the reasons for Asian Paints entering into this market." Asian Paints had announced that the six-month results for the Mumbai-based parent company for the period ended September 30, 2002. The company posted revenues of Indian Rupees (INR) 7237.73 million (about S$259 million), an increase of 15.9 percent over the corresponding period of the previous financial year. Net profit for the company increased by 42.0 percent to about S$25 million. EBDIT increased by 33.4 percent to S$50 million. Market share gains, margin improvement, improved efficiencies and good growth in new products have been some other major achievements in the performance of Asian Paints for the first six months of the financial year. On the international front, the company has made forays in 13 countries in the last four months through Berger International (11 countries), SCIB Chemical, Egypt and Bangladesh (greenfield venture). On October 24, Asian Paints completed the Partial General Offer (PGO) of Berger International, taking a 50.1 percent stake in the Singapore Exchange-listed Company for S$20.8 million (US$11.8 million). This followed an acquisition of a 60%-stake in SCIB, Egypt's fifth largest paint company, for US$5 million which was completed in November '02. Following the acquisitions, the enlarged group now operates in 24 countries scattered over mostly emerging markets in South Asia, the Middle East, Mediterranean, East and South East Asia, the South Pacific and the Caribbean, with combined paint manufacturing capacity in 27 facilities of 330 million litres per annum. The immediate focus will be to turn around the operations of under-performing units of Berger International and add value from Asian Paints by improving efficiencies in operations, manufacturing, distribution and introduction of new products. About Asian Paints Asian Paints is India's largest paint company with a turnover of INR16.56 billion (around US$ 340 million). The company sells over 200,000 MT of paint annually and is ranked amongst the top 10 decorative coatings companies in the world. It is also India's largest exporter of paints, exporting to over 15 markets in the Asia-Pacific region, the Middle East, and Africa. After the acquisition of Berger International Limited, the company would have 22 joint venture units with manufacturing facilities in all of these markets. It is the market leader in ten countries including India. About Berger International Berger International is one of the oldest names in the paint and specialist coatings industry. Its history can be traced back to London in 1760, when Lewis Berger founded the business. Over the years, through mergers, acquisitions and the establishment of operations in many countries, the business has grown in size and stature. The Company is the holding company of the Group's operations in the East and South East Asia, the Caribbean, the Mediterranean and the Middle East. Incorporated on December 3, 1993 as a private limited company, Berger International was converted into a public company on March 31, 1994. Through its operating subsidiaries and associate company, the Group is engaged in the manufacture and distribution of paints. It has manufacturing plants in Singapore, Malaysia, Thailand, Myanmar, China, Malta, Bahrain, UAE, Jamaica, Trinidad and Barbados. About SCIB With 52 million Egyptian pounds (about S$20 million) in sales in 2001, SCIB CHEMICAL is one of the five largest paint producers in Egypt and considered by market watchers as dynamic and an innovative company. Established in 1978 by the prominent Moussa family, it was turned into a joint stock company in 1997 and became a subsidiary of United Paints & Chemicals (UPC) which is a 50:50 joint venture between Egypt's giant Orascom Construction Industries Group (OCI) and the Moussa Family, the Hafez Family and Mr. Badr Sednaoui. SCIB Chemical has a modern paint plant situated in the city of '6th of October' that has a capacity of 25,000 MT.
Source: IANS
Fossil Group sells smartwatch
Global watch and accessories maker Fossil Group has announced to sell its smartphone technolog..
GST rate cut to spur Bengaluru
The realty market in India's tech hub is set to grow as lower Goods and Services Tax (GST) rate..
SpiceJet plans aggressive
Budget passenger carrier SpiceJet plans to aggressively expand its international networks to fl..
Ola raises Rs 400 cr for electric
Leading ride-hailing cab aggregator Ola on Friday said it raised Rs 400 crore from its early in..