Kolkata: Berger Paints Ltd is planning to invest Rs100 crore in a greenfield plant to manufacture water-based paints, an official said on Friday.
The investment will be over a period of two years and the plant is expected to start commercial production by the middle of 2011, managing director Subir Bose said. The plant will have a capacity of 100,000 kilolitres per year, he added.
The company is scouting for 30 acres of land in Tamil Nadu and Karnataka, Bose said, on the sidelines of the company’s annual general meeting.
“With the housing industry growing at a massive pace, the demand for water-based paints are growing by 18-20%, which is much higher compared to solvent paints growing by 8%, so we have decided to increase our water-based capacities,” he said.
At present the Kolkata-based paint company has seven plants which produces 2,00,000 kilolitres of paint, of which 60% is water-based, Bose said.
The company is also in the process of comissioning a 24,000 tonnes emulsion plant in Gujarat and a 6,000-tonnes raisin plant in Goa, he said.
“We have invested Rs31 crore in these two plants and both would be commercially operational by the end of this fiscal,” Bose said.
“Earlier we used to buy emulsion, but once this plant is operational it would help us saving cost of maufacturing water-based paint by 16%,” he added.
The company expects paint prices to remain stable during 2009-10.
“With the raw material prices coming down, there is no scope for increasing the paint prices, so this year there would be only volume-led growth,” Bose said.
During FY09, the paint-maker increased its prices twice as the crude oil prices touched record highs.
The company expects its revenue to grow by 12-13% in 2009-10.
“Last year our revenue and profitability was impacted due to adverse global conditions, but this year we are confident of returning to growth trajectory of 2007-08 when we our profits grew by more than 30%,” he said.