Berger Paints chairman Kuldip Singh Dhingra (right) and MD Subir Bose in Calcutta on Wednesday. Picture by Kishor Roy Chowdhury

Calcutta, July 27: Berger Paints India Limited will set up a coatings plant for plastic auto parts in technological collaboration with Nippon Bee Chemicals Company Limited of Japan. The plant will be built in Gurgaon at an estimated investment of Rs 15 crore and it will commence commercial production within a year, said Subir Bose, managing director, Berger Paints India.

Nippon Bee Chemicals will be the licensor of technology to Berger Paints and the arrangement between the two companies will not involve any equity partnership ? it will be in the nature of technical co-operation and support from the Japanese company.

Nippon Bee Chemicals is a joint venture between the US-based Rohm & Haas Company and Nippon Paint Company of Japan.

Berger Paints’ plant at Krasnadar in South Russia will be operational in May 2006 overshooting the earlier target of March 2006, said Kuldip Singh Dhingra, chairman, Berger Paints India. The initial investment in the plant will be $2 million.

The plant is being set up by Berger Paints Overseas Limited (Berger Russia), which is a 100 per cent subsidiary of Berger Paints (Cyprus) Limited, a wholly-owned subsidiary of Berger Paints India.

The unit will manufacture decorative paints to begin with at an initial capacity of 1000 metric tonnes per month. “We chose Russia since we have been exporting to the country for the past 10 years and have a decent market there. The paints produced in Russia will be sold in the local market and we will slowly expand in the other parts of south Russia,” said Dhingra.

“A powder coating plant is being constructed at our Jammu factory and the new facility will be operational by mid-September. We expect significant benefits from this plant,” he added.

“However, the biggest challenge is the spiralling raw material prices, which increased by almost 7 per cent last fiscal,” he pointed out. “As a result, our growth in value terms was lower than our growth in volume terms.”

For the quarter ended June 30, the company has reported a growth of 74 per cent in its net profit at Rs 15.56 crore.