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Business News/ Companies / News/  Berger Paints plans retail expansion to grow in south, west India markets: CEO

Berger Paints plans retail expansion to grow in south, west India markets: CEO

The country’s second-largest paint company intends to expand its retail network in key southern, central and western states
  • Berger’s expansion comes after Grasim Industries launched its brand Birla Opus in February
  • Berger Paints and its subsidiaries have 25 manufacturing plants in India. (Mint)Premium
    Berger Paints and its subsidiaries have 25 manufacturing plants in India. (Mint)

    Berger Paints India Ltd, the country’s second-largest paint company by market share, is increasing its retail presence in west and south India and adding capacity in the east to meet growth in demand and fend off competition, a top executive told Mint.

    Berger intends to expand its retail network in Tamil Nadu, Telangana, Karnataka and Andhra Pradesh in the south and in Maharashtra, Gujarat, Madhya Pradesh, Chhattisgarh and Rajasthan in central and west India.

    “We used to install about 4,000-odd Colourbank tinting machines (used to expand the dealer network) per year. We accelerated and you know we installed 7,300 last year. This year, we are planning to cross 8,000, and next year we may go to 9,000," Abhijit Roy, managing director and chief executive officer of Berger Paints India, told Mint in an interview.

    Also read | Can Berger Paints sustain market share, margins amid growing competition?

    The company plans to install 65% of the planned 8,000 new Colourbank tinting machines in new areas and the rest to fill gaps in existing places of operation, said Roy.

    “Strengthening the team in these locations, improving our ground presence, and not only the dealers but you also need to align the painters, architects, builders. In three to four years, we should be fairly represented in all of these places as well," said Roy.

    A steady expansion

    Berger’s expansion comes at a time when Grasim Industries has launched its brand Birla Opus. Birla Opus aims to ‘disrupt’ the industry with a target of 10,000 crore in revenue in three years, according to a company statement.

    Analysts said Berger’s strategy to enter new markets is set to yield results.

    “Berger Paints is a strong No. 2 player that is capturing market by market. Fifteen years back, Berger was more of a low-end player. Then they focused on more mid- and top-end and now they are doing more markets," said Abneesh Roy, executive director of research at Nuvama Institutional Equities.

    Expansion has to be done piece by piece; a pan-India blockbuster approach has never worked, he said.

    Mega investments

    Berger’s plan includes investing 1,800 crore over three years in opening plants at Panagarh in West Bengal and Khordha in Odisha.

    “Investment projects worth 500 crore in Panagarh and 1,300 crore in Khordha are under way and these production units are to be operational by the first quarter of financial year 2027. This investment will be through internal accruals," Roy said.

    Also read | Grasim’s entry sparks caution but fund managers also favour Asian Paints

    Berger and its subsidiaries have 25 manufacturing plants in India, with a total capacity of about 1.27 million tonnes. Roy explained that the capacity expansion will help address issues in the eastern part of the country.

    “In the east, Berger was running out of capacity, resulting in setting up plants in Odisha and West Bengal to cater to the stronghold market," he said.

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    Published: 11 Jun 2024, 02:28 PM IST
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