Chennai/Calcutta, July 14: Ailing paint maker Jenson and Nicholson has entered into a joint venture pact with Chennai-based Sheenlac Paints to strengthen its brand name and the popular tagline "whenever you see colour, think of us".
The joint venture will be in the form of a special purpose vehicle (SPV) called Jenson and Nicholson Paints Pvt Ltd. Though Jenson and Nicholson will own 51 per cent of the venture, Sheenlac will have management control. Jenson and Nicholson (India) Ltd (JNIL) will transfer 150 staff members to the new entity. Over the next five years, Rs 50 crore will be infused into the venture, which will market and sell JNIL's decorative paints.
"Jenson and Nicholson is a reputed brand and we are delighted to market its decorative products. We wanted to leverage their brand value and Sheenlac's dealer network. JNIL will hereafter deal only with the industrial segment and not the retail trade," Sridhar Krishnamoorthy, CEO of Sheenlac, said.
Sheenlac, the sixth-largest paint company in India, hopes to increase its revenues to Rs 700 crore from Rs 400 crore in one year through the joint venture. JNIL expects to raise its revenues to Rs 100 crore from Rs 55 crore.
Sheenlac managing director Sudhir Peter said while JNIL was strong in the north and east, Sheenlac had a robust presence in the south and west and the joint venture would allow both the brands to expand across the country.
JNIL's decision to divest its brand and tagline in the decorative business is related to its financial stress. In 2015-16, the company had suffered a loss of Rs 10.33 crore. The company has no plan to follow the same route in industrial paints, president Anant Sinha told The Telegraph.
In the annual general meeting of 2015, the company had informed the shareholders that it was unable to raise funds for operations and business growth. "The brand name of the company and its products and associated taglines still carry substantial value," JNIL had said in its annual report seeking shareholders' approval for taking the subsidiary route.
