Berger Paints plans to scale up its investment in the upcoming plant at the Sandila industrial area in Uttar Pradesh to around Rs 260 crore. The plant, which was originally stated to be commissioned by 2021 at an investment of around Rs 200 crore, will now go onstream in 2022.
The company has added waterproofing, besides decorative, industrial and putty lines. Waterproofing is a Rs 8,000 crore-market where the company plans to make further inroads.
“The capital expenditure for the current year has not been scaled down. The major expenditure this year will be on the plant that we are setting up in Sandila near Lucknow.
This new plant will have decorative, industrial, water proofing, putty. Construction work going on. The plant is expected to be operational from 2022,” said Berger Paints managing director and CEO Abhijit Roy.
He added that slight changes in design and delay in obtaining approvals, including environmental clearances, have delayed the commissioning of the plant.
Roy said that the paint maker has seen an improvement in demand from the smaller markets and this will help in recovering part of the business lost during the first quarter of the fiscal.
“We have had double-digit growth from June onwards in volume and even in value in the months of June and August. July was muted though we had volume growth. The second quarter will be positive over last year,” Roy said.
“Waterproofing is doing well. We believe the segment has got good potential and it is starting to open up in India,” he said. He added that the company is strengthening its distribution in certain pockets to bridge the gap with market leader Asian Paints.
At the company’s annual general meeting, Berger Paints chairman Kuldip Singh Dhingra said that the market capitalization of the shares of the company stood at Rs 48,363 crores as on 31st March, 2020 as against Rs 31,440 crores as on 31st March, 2019 - an increase of more than 50 per cent in one year.
The company has paid an interim dividend of Rs 1.90 per share in March 2020 and the board has recommended a final dividend of Rs 0.30 per share aggregating the total dividend to Rs 2.20 per share in 2019-20.