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Paints trio focuses on greenfield ventures

Calcutta, June 27: Three leading paints companies — Goodlass Nerolac, Berger Paints and Asian Paints — are expanding their operations through greenfield ventures, having shelved plans to acquire existing factories or companies.

Goodlass Nerolac is setting up a new plant in Bawal, Haryana, at an initial investment of Rs 90 crore on a plot of 32 acres.

Berger Paints has said it will set up a plant in the special economic zone south of Jammu at an investment of Rs 20 crore, and has acquired a 10-acre plot for it.

Asian Paints, the undisputed leader in the industry, has applied for regulatory approvals to set up a plant in Pondicherry.

The company says the plant will produce 1-lakh tonnes per annum, and will be its biggest factory in India. Though vice-chairman and managing director Ashwin Dani refuses to disclose what the factory could cost, experts see Asian Paints spending several hundred crores on it.

Goodlass’s managing director H. M. Bharuka said, “The plant in Haryana will be set up in three phases. The first phase will be completed in September 2004.

“Investment in the first phase of construction is around Rs 90 crore. We would scale up our investment in the plant subsequently, and produce both decorative and industrial paints.”

Besides the greenfield venture, Goodlass has recently completed the debottlenecking of its Kanpur plant at a cost of Rs 20 crore. “The Kanpur plant could produce 40,000 tonnes per annum. It can now produce 50,000 tonnes. The plant in Haryana will produce 20,000 tonnes on completion of the first phase,” Bharuka added.

Berger’s managing director Subir Bose says, the plant in Jammu will be operational in 15 months, or around the same time as Goodlass’s in Haryana. Berger has considered acquiring the cement-based paint business of Snowcem in the recent past, but was forced to shelve the plan after the two companies could not agree on price.

Dani and Bharuka said they would consider any acquisition possibility, provided assets were available at the right price. “But there appears to be none at present.”

Research lab

The Indian Paint Association is setting up a research laboratory in association with Jadavpur University. A memorandum of understanding (MoU) between the university and association will be signed on July 1 in the presence of Bengal chief minister Buddhadeb Bhattacharya.

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