Berger Paints to spend Rs100-crore on new plant

Berger Paints India Ltd is planning to invest Rs100 crore in a new plant to manufacture water-based paints, its managing director Subir Bose told journalists in Kolkata today.

The company is scouting for 30 acres of land in the southern states of Tamil Nadu and Karnataka for the purpose. The investment will be spread over two years, and the plant is expected to start commercial production by the middle of 2011. It will have a capacity of 100,000 kilolitres per year, Bose said after the company's annual general meeting.

"With the housing industry growing at a massive pace, the demand for water-based paints is growing by 18-20 per cent, which is much higher than solvent paints which is growing by 8 per cent, so we have decided to increase our water-based capacities," he said.

At present the Kolkata-based paint company has seven plants producing 200,000 kilolitres of paint, of which 60 per cent is water-based. 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, Bose said.

"We have invested Rs31 crore in these two plants and both would be commercially operational by the end of this fiscal," he said. "Earlier we used to buy emulsion (a raw material for water-based paint), but once this plant is operational it would help us saving cost of maufacturing water-based paint by 16 per cent," he added.

The company expects the paints 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.

However, the company has shelved plans for setting up of an automotive paint plant near Pune because of the economic slowdown. ''We will take a call once the automobile sector starts reviving,'' said Bose.