World Cup boosts Berger Paints’ Russian venture
Berger Paints India is considering acquisition of competing paint companies in Russia after the 2018 FIFA World Cup. The tournament has instilled it with fresh hopes to scale up the lossmaking operation in Russia.
Its Russian subsidiary partnered a local firm to paint three World Cup football venues — Rostov Arena, Volgograd Arena and Kaliningrad — apart from two airports. This led the subsidiary to register a breakeven in profitability in this financial year. “We have 1,000 tonnes a month capacity plant at Krasnodar in Russia and the capacity utilisation stands at 35-40 per cent. But we are eyeing acquisitions there,” Abhijit Roy, managing director and chief executive officer, said.
Roy said firms having a decent brand goodwill, strong distribution structure and capabilities in local research and development would be targeted for acquisition.
Out of its three foreign subsidiaries in Poland, Nepal and Russia, the latter had remained the weakest by registering low revenues at ~7080 million. However, with the new contracts, its revenue is projected at ~150-160 million.